SUMMARY OF PROMINENT FEDERAL AND STATE OF SOUTH CAROLINA ENVIRONMENTAL PROSECUTIONS
In United States v. Evergreen International, S.A., the defendant pled guilty to twenty-four felonies and one misdemeanor spanning five federal districts and paid $25 million in criminal fines and community service. This is the largest sentence ever imposed against a shipping company in an oil-water separator case.
In United States v. Jong Chul Lee, et al., a ship owner paid a criminal fine of over $1.5 million after pleading guilty to making false statements in its oil record book. Two officers aboard the ship were convicted and sentenced to prison terms.
In United States v. Fujitrans Corp., a ship operator pled guilty to making false statements in its oil record book and paid over $1.3 million in criminal fines in two federal districts. Two of the ship’s officers served time in prison and were then deported.
In United States v. Rick Stickle, et al., defendant Stickle was found guilty of conspiring to illegally dump four hundred forty tons of oil-contaminated grain on the high seas and of obstructing a Coast Guard and Department of Agriculture investigation. He was sentenced to serve thirty-three months in prison and to pay a $60,000 fine.
Motiva Enterprises, LLC was convicted for violations of the Clean Water and Clean Air Acts stemming from an explosion at an oil refinery. The 2001 explosion of a 415,000 gallon tank for sulphuric acid killed one worker, injured eight others, and spilled 99,000 gallons of acid into the Delaware River. Company officials knew that the tank leaked and should not have been used. Motiva was sentenced to pay a $10 million dollar criminal fine and serve three years of probation. It will also pay a $12 million civil penalty and spend at least $3.96 million on environmental projects.
In United States v. Tyler Pipe Company, a division of McWane located in Tyler, Texas, was sentenced to pay a criminal fine of $4.5 million, serve a five-year term of probation, and replace and upgrade structures at its iron foundry facility at a cost of approximately $20 million. Tyler Pipe pled guilty to a felony false statement count concerning a permit application and to a knowing violation of the Clean Air Act for illegally operating its facility without notifying authorities of a major modification.
In United States v. McWane, Inc., three high-ranking company officials and the corporation (acting through McWane Cast Iron Pipe Company, its Birmingham-based division) were convicted by a jury of crimes related to six years of violations of its National Pollution Discharge Elimination System (“NPDES”) permits. A fourth defendant pled guilty to conspiracy before trial. The defendants conspired to violate the Clean Water Act, committed substantive Clean Water Act crimes by illegally discharging process wastewater through storm drains, and made false statements that helped conceal their discharges to the Environmental Protection Agency (“EPA”).
In United States v. Union Foundry, a McWane iron foundry division located in Anniston, Alabama, pled guilty to a willful violation of an OSHA regulation that led to the death of an employee and to violations of the Resource Conservation and Recovery Act. Because the company operated equipment at its foundry without required safety guards, an employee was caught in a conveyer belt pulley and crushed to death. The plant also illegally treated baghouse dust contaminated with lead, a hazardous waste, and exposed workers to this waste. The company was ordered to pay a $3.5 million criminal fine, perform community service valued at $750,000 (including local lead and asbestos abatement), and serve a three-year term of probation.
In United States v. Cleve-Allan George, a jury returned guilty verdicts against both defendants for knowingly violating regulations controlling asbestos removal during demolition of housing in a low-income neighborhood. The defendants knowingly allowed friable asbestos to be removed improperly and filed false air monitoring documents.
In United States v. ACS, a company and two individuals pled guilty to conspiring to obstruct OSHA, EPA, and Small Business Administration regulations. The defendants fraudulently obtained approximately $37 million in Small Business Administration set-aside contracts at federal facilities, including contracts for jobs involving asbestos, lead abatement, and hazardous waste operations. They also purchased approximately 250 false training certificates for their unqualified employees and directed them to conduct work involving asbestos, lead, and hazardous waste at federal facilities under those contracts. At sentencing, a $3 million criminal fine and significant prison sentences for the individuals are expected.
In United States v. Robert Lucas, all three individual defendants and two companies were convicted by a jury of illegally developing a large wetlands tract on Mississippi’s Gulf Coast and defrauding those who bought home sites there. The defendants built and sold mobile home sites, most with illegal in-ground septic systems. By building these systems, the defendants criminally violated the Clean Water Act in that they knowingly caused illegal discharges to waters of the United States. The systems discharged directly into wetlands and frequently failed, causing sewage to back-up into homes and seep into nearby yards.
In United States v. Donald Roeser, the defendants, who operated a hazardous and non-hazardous waste treatment and disposal facility, directed their employees to discharge hundreds of thousands of gallons of untreated hazardous and non-hazardous liquid wastes through the sanitary sewer system on a daily basis. They also caused thousands of tons of hazardous solid waste to be illegally shipped to a non-hazardous waste landfill. The two individual defendants pled guilty to similar crimes, and to conspiracy and substantive Clean Water Act violations. Both defendants were sentenced to periods of incarceration, one for 27 months and one for 12 months. Each must pay a $60,000 fine.
In United States v. Kenneth G. Kraft, a husband and wife were convicted of conspiracy and false labeling for the illegal interstate sale of endangered and threatened animals – including tigers, leopards, and grizzly bears – from a wildlife park. Nancy Kraft was sentenced to 15 months in prison and two years supervised release. Kenneth Kraft pled guilty to conspiracy, false labeling and false statements. He was sentenced to 18 months in prison and three years supervised release. Indictments were also issued against others.
In United States v. Optimus, Inc., a gourmet food company pled guilty to wildlife and smuggling charges and was sentenced to pay a $1 million criminal fine, to be deposited into the Lacey Act Reward Account, a fund used by the Fish & Wildlife Service to provide financial incentives for information leading to convictions of wildlife law violators. One of the largest importers of sturgeon caviar in the United States, Optimus admitted that it bought nearly 6 tons of smuggled caviar from five separate smuggling rings.
In United States v. Antonio Pego, a federal grand jury indicted a resident of Spain and an Uruguayan company for crimes stemming from the illegal import and attempted sale of toothfish, marketed as Chilean sea bass. The case involves the import of approximately 53,000 pounds of toothfish into Miami from Singapore. Related deliveries occurring in the same time frame included over 160,000 pounds of toothfish brought into Los Angeles and over 300,000 pounds brought into New York. All of the fish, valued at over $3 million, have been seized and are the subject of civil forfeiture complaints.
In United States v. Stock Development, LLC, the defendant company pled guilty to a Class A misdemeanor for allowing an employee to cut down a tree and destroy an active bald eagle nest that had been discovered in an area slated for residential development. The company was sentenced to pay a $175,000 fine and to pay $181,000 in restitution to organizations that support and promote conservation of eagles and other birds of prey. This is the largest combination of a fine and restitution ever paid for the destruction of an eagle nest tree.
In United States v. Dov Shellef, a jury convicted two defendants of conspiring to defeat the excise taxes on ozone-depleting chemicals, to launder money and to commit wire fraud. The defendants dodged approximately $1.9 million in taxes due on domestic sales of trichlorotrifluoroethane, an ozone-depleting chemical commonly referred to as CFC-113, by representing to manufacturers that they were purchasing it for export but then selling it in the domestic market. Once widely used as an industrial solvent and as a refrigerant in centrifugal chillers for large buildings, CFC-113 now has a limited domestic market and is used in relatively small quantities for laboratory and analytical purposes.
In United States v. James Edwards Adams, a former environmental contractor from Inman, South Carolina was sentenced to 27 months in prison and three years of supervisory release for conspiracy to commit mail fraud and related crimes. Adams was the former president and owner of Carolina Upgrading of South Carolina, Inc., an environmental contracting business providing testing services for owners and operators of underground storage tanks (USTs). USTs contain petroleum products, including gasoline, and UST owners and operators are required by law to have their tanks tested to ensure their systems are not leaking any petroleum into the groundwater or soil. On August 24, 2001, Adams and the company pled guilty to a 15-count Indictment, which charged that Adams directed employees of his company to fraudulently provide false UST test reports to owners and operators of UST facilities located in South Carolina, North Carolina, Florida, Georgia, Virginia and Tennessee.
In United States v. Tin Products, et al., on May 5, 2003, company Vice President James Goldman was sentenced to 18 months in prison, 100 hours of community service and a $100 special assessment. Melanie Purvis, who had served as environmental supervisor under Goldman, was sentenced to 5 months in prison, 5 months home detention, a $7,500 fine and $100 special assessment. George Metts, a wastewater operator who served under both Purvis and Goldman, was sentenced to 6 months home detention, 5 years probation, 100 hours community service and $100 special assessment. Because the company was defunct, Judge Cameron Currie stayed the sentencing of Tin Products Corporation, which had owned a chemical plant located in Lexington, South Carolina, and produced chemicals, known as organotins that are used for plumbing pipes, glass coatings, and fixtures. Goldman pleaded guilty to knowingly discharging and causing Tin Products employees to discharge organotins wastewater to the Two Notch Publicly Owned Treatment Works (POTW) owned by the Lexington County Joint Municipal Water and Sewer Commission for over six months. The organotins contamination eventually passed through the POTW into Red Bank Creek and caused the death of nearly 1,000 fish.
In United States v. Crossings Development Company, LLC, et al., on April 8, 2005, the company and its owner, Matthew D. Congdon, each pleaded guilty in South Carolina federal court to violating the Clean Water Act by filling wetlands without a permit from the Army Corps of Engineers relating to a 429-acre tract development in Richland County, South Carolina. The defendants ignored advice by two consultants that a Corps permit was needed, and filled approximately 45 acres of wetlands unlawfully. Crossings Development agreed to pay a fine of $1,100,000, and issued a written letter of apology. Defendant Congdon was sentenced to probation for a term of thirty-six (36) months with the special condition that defendant perform 100 hours of community service work under the supervision of the U.S. Probation Office.
STATE OF SOUTH CAROLINA CASES
In 1997, Fashion Engravers, a Spartanburg electroplating company, was convicted of violating the Hazardous Waste Management Act and sentenced to pay $55,000 in fines.
In 1997, Richard Tate Metalplating was convicted by the S.C. Attorney General of Pollution Control Act and Hazardous Waste Management Act violations.
In 1996, the Ninth Circuit Solicitor convicted Charleston-based North Area Transmission Shop of violating the Pollution Control Act. The defendant was ordered to shut down its unlawful bypass system, was sentenced to probation, and received a suspended sentence, which was conditioned upon mandatory monitoring and remediation.
In 1992, the Greenville County Solicitor convicted William Groce of two Hazardous Waste Management Act violations. The defendant was sentenced to five years probation, received a one-year suspended sentence, and was fined $1,000.
In 1992, The CEO of Columbia Organic Chemical was convicted of violating the Hazardous Waste Management Act. The defendant was sentenced to one year in prison. Columbia Organic Chemical, had previously paid a $50,000 penalty in a related federal civil enforcement action.
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