Supervisor of Royal Oak Township Pleads Guilty to Conspiracy to Accept Bribes, to Defraud HUD, and to File False Statements to EPA

The supervisor of Royal Oak Township, William Morgan, pleaded guilty today in federal court to two counts of conspiracy. Morgan admitted to conspiring to accept a $10,000 bribe, to defraud the U.S. Department of Housing and Urban Development (HUD), and to make a false statement in violation of the federal Clean Air Act.

In pleading guilty before U.S. District Judge Arthur J. Tarnow, Morgan admitted accepting a $10,000 bribe in an unsuccessful attempt to steer a HUD contract for the demolition of property to the company whose owner gave him the bribe. Morgan also admitted that he conspired with the owner of that company and others to submit a false report regarding the asbestos to be abated in an abandoned theater on Eight Mile Road, which was to be demolished, so that they could submit a false change order to obtain approximately $170,000 in federal funds.

The federal funds were intended to be used by communities for the improvement of blighted areas by removal of dilapidated buildings, pursuant to the Neighborhood Stabilization Program (NSP), which was funded by the U.S. Department of Housing and Urban Development. Mr. Morgan, in addition to being township supervisor, was the township coordinator for NSP.

United States Attorney Barbara L. McQuade said, “The conduct in this case not only breached the public trust, but it also risked public health by evading the rules for removing asbestos safely.”

Andrew Arena, Special Agent in Charge, Federal Bureau of Investigation said, “This guilty plea should serve as a strong reminder to anyone in public government that corruption will never go unpunished. Those who strive to profit personally by taking bribes will have to face severe consequences for violating public trust.”

Breck J. Nowlin, Deputy Special Agent in Charge, U.S. Department of Housing and Urban Development-Office of Inspector General, said, “Public corruption at any level strikes at the very heart of representative government. In this case, the very individuals in whom the people have placed their full faith and confidence have squandered that faith in order to personally profit from the programs they are charged to administer. We will continue to work closely with our law enforcement colleagues to root out this type of corruption and to protect these valued programs.”

“Asbestos can cause cancer and other fatal diseases and has no safe exposure level. That’s why the main question that a public official should ask himself when awarding an asbestos abatement contract is, ‘Who can best do the job competently, safely, and cost-effectively?’,” said Randall Ashe, Special Agent in Charge of U.S. Environmental Protection Agency-Criminal Investigation Division.

The conspiracy counts both have a maximum sentence of five years’ imprisonment and a $250,000 fine. Morgan’s sentencing is scheduled for August 2, 2012 at 3:00 p.m.

The case was investigated by special agents of the FBI, HUD-Office of Inspector General, and U.S. Environmental Division-Criminal Investigation Division.

Italian Shipping Company and Chief Engineer Charged with Environmental Crimes and Obstruction of Justice

WASHINGTON – Italian-based shipping company Giuseppe Bottiglieri Shipping Company S.P.A., owner and operator of the Motor Vessel Bottiglieri Challenger, and Vito La Forgia, the vessel’s chief engineer, have been charged in a four-count indictment with the illegal dumping of waste oil and oil-contaminated waste water in violation of the Act to Prevent Pollution from Ships (APPS), conspiracy and two counts of obstruction of justice, the Department of Justice announced today.

Engine room operations on board large ocean going vessels such as the Bottiglieri Challenger generate large amounts of waste oil and oil-contaminated waste water.  International and U.S. law requires that all overboard discharges of waste oil be recorded in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.  

According to the indictment, on or about Jan. 25, 2012, the Bottiglieri Challenger arrived in Mobile, Ala., and was boarded by Coast Guard officials who conducted an inspection to determine the vessel’s compliance with U.S. and international law.   The Coast Guard’s inspection uncovered evidence that Giuseppe Bottiglieri Shipping Company, acting through its agents and employees and chief engineer Vito La Forgia, conspired to and   failed to maintain an accurate oil record book that reflected all disposals of oil residue and discharges overboard, in violation of federal law.  

Giuseppe Bottiglieri Shipping Company and Vito La Forgia are also charged in the indictment with obstructing the Coast Guard’s inspection by ordering that an illegal bypass pipe, also referred to as a “magic pipe,” that was used to transfer oil-contaminated waste overboard, be removed prior the vessel’s arrival in Mobile.   The indictment further alleges that the shipping company and La Forgia obstructed the inspection by having one of the waste tanks rinsed out with sea water before reaching the port in Mobile.  

If convicted, Giuseppe Bottiglieri Shipping Company faces a fine and other possible    penalties.   La Forgia faces a maximum penalty of 20 years in prison for the obstruction of justice charge.   

An indictment contains only allegations.   The defendants are presumed innocent unless and until proven guilty.   

This case was investigated by the U.S. Coast Guard Investigative Services and the Environmental Protection Agency, Criminal Investigations Division.   The case is being prosecuted by the U.S. Attorney's Office for the Southern District of Alabama and by the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice.

National City Pawn Shop and Its Owner Convicted of Dumping Hazardous Waste

United States Attorney Laura E. Duffy announced that on March 1, 2012, a federal jury in San Diego convicted We Lend More, Inc., a National City pawn shop, and its owner, Marc Vogel, of several environmental crimes related to their dumping of lethal hazardous wastes at the Miramar Landfill in March 2011. Vogel and his company were found guilty of unlawful transportation of hazardous waste, unlawful disposal of hazardous waste, and transportation of hazardous waste without a manifest, based on their role in dumping of potassium cyanide—a poisonous toxin that is lethal to humans in very small doses—and concentrated nitric acid. According to testimony presented at trial, if these two chemicals had combined during their disposal, the mixture would have created deadly hydrogen cyanide gas, threatening the life of anyone in the immediate vicinity.

According to evidence presented at trial, on March 12, 2011, Vogel contacted a trash hauler and asked for a truck to be sent to We Lend More to dispose of some “junk.” Vogel did not inform the trash hauling company that “junk” included cyanide and acids. Later that day, co-defendant Raul Gonzalez-Lopez arrived at We Lend More with a truck, negotiated with Vogel for a price of $100 to remove the “junk,” and tossed the discarded items into the truck—including two seven-pound containers of potassium cyanide and a gallon of nitric acid. No waste manifests were prepared for either of these hazardous wastes. The following day, Gonzalez-Lopez disposed of the potassium cyanide and nitric acid, along with other trash, at the Miramar Landfill, which does not have a permit to accept such hazardous waste. Fortunately, landfill workers promptly discovered the hazardous wastes and took precautionary measures, including hiring a hazardous waste disposal company to properly deal with the dangerous items. Vogel later admitted to investigators that he knew that the chemicals he was seeking to dispose of could not be removed as ordinary trash. Indeed, We Lend More had previously obtained an EPA “generator” number in connection with the disposition of some other chemicals, but never prepared a manifest for this shipment of hazardous waste.

Co-defendant Gonzelez-Lopez is currently a fugitive on the same charges that were brought against Vogel and We Lend More.

Sentencing for Vogel and We Lend More is set for May 29, 2012 at 9:00 a.m. before the Honorable Michael M. Anello, United States District Judge.

Defendants

We Lend More, Inc.
Marc Vogel

Criminal Case No. 11cr3327-MMA

National City, California
Encinitas, California

Summary of charges

Count one Unlawful transportation of hazardous waste, in violation of Title 42, United States Code, Section 6928(d)(1); maximum penalties: five years in custody and a fine of $50,000 per day of violation

Count two Unlawful disposal of hazardous waste, in violation of Title 42, United States Code, Section 6928(d)(2)(A); maximum penalties: five years in custody and a fine of $50,000 per day of violation

Count three Transportation of hazardous waste without a manifest, in violation of Title 42, United States Code, Section 6928(d)(5); maximum penalties: two years in custody and a fine of $50,000 per day of violation

Agencies

U.S. Environmental Protection Agency, Criminal Investigations Division
Federal Bureau of Investigation

North Carolina Corporate Hog Farm and President Plead Guilty to Violating the Clean Water Act

WASHINGTON – Freedman Farms, Inc. and its president, William B. Freedman, pleaded guilty yesterday in federal court in New Bern, N.C., to violating the Clean Water Act when they discharged hog waste into a stream that leads to the Waccamaw River, the Department of Justice’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Eastern District of North Carolina announced today. 

After a week of trial that began on June 28, 2011, Freedman Farms pleaded guilty to a felony violation of the Clean Water Act for discharging hog waste into Browder’s Branch, a tributary to the Waccamaw River that flows through the White Marsh, a large wetlands complex.  Freedman Farms, located in Columbus County, N.C., is in the business of raising hogs for market, and this particular farm had some 4,800 hogs.  The hog waste was supposed to be directed to two lagoons for treatment and disposal.  In December 2007, hog waste was discharged from Freedman Farms directly to Browder’s Branch.  William Freedman pleaded guilty to a misdemeanor violation of the Clean Water Act for his role in the discharge.

“Owners and operators of concentrated animal feeding operations must comply with the nation’s Clean Water Act for the protection of America’s streams, wetlands, and rivers,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice.   “Freedman and his farm failed to do so and should be held accountable for polluting waterways and wetlands in Columbus County and the Waccamaw River watershed.”

“The hog industry is vital to North Carolina. However, we must protect our natural resources that affect other vital interests in our beautiful state,” said U.S. Attorney George E.B. Holding.   “In order to assure the well-being of all, we must ensure that everyone takes care of these precious and finite resources.”

“Large farms and dairies can cause serious damage to the environment if they illegally discharge wastewater into nearby lakes, rivers, and streams,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program for North Carolina. “That is why EPA has made addressing violations by concentrated animal feeding operations an enforcement priority. In this case, waste products from nearly five thousand hogs went directly into a sensitive wetland area, jeopardizing the safety and health of water and wildlife.   This guilty plea demonstrates that farm owners must obey the law and will be held responsible for their actions.”

The Clean Water Act is a federal law that makes it illegal to knowingly or negligently discharge a pollutant into a water of the United States.  The act includes as waters of the United States those that have a significant nexus to a traditional navigable water.

According to the plea agreement, the government and the corporate defendant have jointly asked the court to sentence Freedman Farms to pay $1.5 million, serve a term of five years’ probation, and publish a public apology.  Under the plea agreement for William Freedman, the defendant faces up to one year in prison.

If the court decides to accept the plea agreement, the sentencing hearing for both defendants will take place on a date to be scheduled by the court, before U.S. Chief District Judge Louise W. Flanagan. 

The case was investigated by the U.S. Environmental Protection Agency (EPA) Criminal Investigation Division and the North Carolina State Bureau of Investigation, with assistance from the EPA Science and Ecosystem Support Division.  The case is being prosecuted by the Assistant U.S. Attorney Gaston Williams of the Eastern District of North Carolina, and Trial Attorney Mary Dee Carraway of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

Mayor of Port Allen, Louisiana Convicted of Racketeering

BATON ROUGE, LA—United States Attorney Donald J. Cazayoux, Jr., announced today that DEREK A. LEWIS, age 50, of Port Allen, Louisiana, pled guilty before U.S. District Court Judge Brian A. Jackson to violating the Racketeer Influenced and Corrupt Organizations Act (RICO). LEWIS, the Mayor of the City of Port Allen, Louisiana, had been charged by a federal grand jury with a variety of offenses related to his taking of bribes while Mayor. His trial had been scheduled to begin on July 25, 2011.

RICO provides for a maximum sentence of 20 years’ imprisonment, a $250,000 fine, and forfeiture. Given LEWIS’s acceptance of responsibility and cooperation, the parties have agreed that a sentence of imprisonment not to exceed five years is appropriate. In addition to any term of imprisonment, LEWIS will be required to forfeit all of the proceeds from the offense and faces up to $250,000 in fines and a term of up to three years of supervised release following imprisonment.

LEWIS’s conviction is part of Operation Blighted Officials, an investigation utilizing undercover operations to determine the extent and scope of public corruption. As part of the operation, individuals working undercover for the FBI posed as businessmen (hereinafter referred to as “the Businessmen”) affiliated with a company involved in the development of a conceptual product known as the “Cifer 5000.” The Cifer 5000 was marketed as an automated waste container cleaning system using specially-designed and equipped trucks to clean and sanitize commercial and residential waste containers. Its potential customer pool was represented to be governmental entities, such as municipalities.

During his guilty plea, LEWIS admitted that, during the period from October 2008 through June 2010, he used his position as Mayor to take actions favorable to the Businessmen, including the promotion of the Cifer 5000 in the city and elsewhere, in exchange for cash and other things of value totaling over $15,000. LEWIS admitted that such official actions included (1) writing a false official letter of support which he believed would be used to secure millions of dollars in private investor capital; (2) writing a false official letter of support which he believed would be used to convince other public officials to contract with the Cifer 5000; (3) agreeing to propose a City ordinance favorable to the Cifer 5000 project; (4) writing an official letter of support which he believed would be provided to the U.S. Environmental Protection Agency in connection with a multi-million dollar grant request; (5) providing access to confidential law enforcement information through the Chief of Police; and (6) guaranteeing that the Cifer 5000 would receive a contract with the City.

The status of the other defendants in Operation Blighted Officials is as follows:

■Johnny Johnson: On July 23, 2010, the former City Councilman of Port Allen, Louisiana, was convicted after pleading guilty to using an interstate facility in aid of racketeering. Johnson faces up to five years’ imprisonment and a $250,000 fine. He will be sentenced by Chief U.S. District Judge Ralph E. Tyson on a date to be determined.

■Maurice B. Brown: On March 3, 2011, the former Mayor of White Castle, Louisiana, was convicted by a federal jury following a seven-day trial of 11 counts of violating RICO, engaging in honest services mail and wire fraud, and using an interstate facility in aid of racketeering. His brother was acquitted. Former Mayor Brown faces up to 145 years’ imprisonment and a $2,750,000 fine. He is scheduled to be sentenced before U.S. District Judge Brian A. Jackson at 9:30 a.m. on August 10, 2011.

■Thomas A. Nelson, Jr.: On July 22, 2011, the former Mayor of New Roads, Louisiana, was convicted by a federal jury following an eleven-day trial of 7 counts of violating RICO, engaging in honest services wire fraud, using an interstate facility in aid of racketeering, and making false statements to the FBI. He faces up to 65 years’ imprisonment and a $1,750,000 fine. He will be sentenced by Chief U.S. District Judge Ralph E. Tyson on a date to be determined.

■Frederick W. Smith: The Chief of Police for Port Allen, Louisiana, has been charged by a federal grand jury with 11 counts of violating RICO, engaging in honest services wire and mail fraud, and using an interstate facility in aid of racketeering. If convicted, Smith faces up to 130 years’ imprisonment and a $2,750,000 fine. His trial is set to begin on July 25, 2011 before U.S. District Judge Brian A. Jackson.

■George L. Grace, Sr.: The former Mayor of St. Gabriel, Louisiana has been charged by a federal grand jury with 11 counts of violating RICO, bribery involving a federally-funded entity, making false statements, obstruction of justice, honest services mail and wire fraud, and use of an interstate facility in aid of racketeering. If convicted, Grace faces up to 180 years’ imprisonment and a $2,750,000 fine. His trial is set to begin on January 23, 2012, before Chief U.S. District Judge Ralph E. Tyson.

U.S. Attorney Cazayoux stated, “I am pleased that the defendant has accepted responsibility for his actions. His guilty plea allows his community to move forward and past this dark period in its history. This case highlights the importance of discovering and prosecuting public corruption and demonstrates the continued commitment of the U.S. Attorney’s Office in prosecuting these crimes which undermine the public’s confidence in its government. We look forward to proceeding with other cases under Operation Blighted Officials.”

FBI Special Agent-in-Charge David Welker stated: “Today’s guilty plea marks a significant step in this ongoing investigation and should send a clear message to any public official contemplating using his office to line his pockets for self-enrichment. This guilty plea and other ongoing public corruption probes reflect the FBI’s commitment and dedication to deterring and preventing future schemes that involve elected officials.”

Operation Blighted Officials is an ongoing investigation being conducted by the Federal Bureau of Investigation and the United States Attorney’s Office for the Middle District of Louisiana. The U.S. Department of Housing and Urban Development, Office of Inspector General, has also assisted. These matters are being prosecuted by Assistant United States Attorney Corey R. Amundson, who serves as the Senior Deputy Criminal Chief, and Assistant United States Attorney M. Patricia Jones, who serves as the Senior Litigation Counsel. In addition, Assistant United States Attorney Alan A. Stevens is a member of the LEWIS prosecution team and Assistant United States Attorney Michael Jefferson is a member of the NELSON prosecution team.

Swift Beef Company to Pay $1.3 Million Penalty for Clean Water Act and State Law Violations at Its Grand Island, Nebraska Beef Processing Plant

WASHINGTON – Swift Beef Company, a subsidiary of JBS S.A, the world’s largest beef producer, has agreed to pay $1.3 million to the United States and state of Nebraska to settle alleged violations of the federal Clean Water Act and Nebraska state law at its Grand Island, Neb., beef processing plant, the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.

Swift has already spent over $1 million at its Grand Island plant in implementing measures to reduce pollutants in its wastewater as required by its discharge permits issued by the state of Nebraska under the Clean Water Act.

“Swift will pay a significant penalty for its illegal discharges of wastewater that caused interference with the local water treatment system and damage to the aquatic ecosystem of the Wood and Platte rivers,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice.  “The same industry that puts food on American dinner tables must also comply with the Clean Water Act that keeps our country’s waterways healthy, safe and clean.” 

“Protection of our waterways is one of our highest priorities,” said Deborah R. Gilg, U.S. Attorney for the District of Nebraska. “Fouling our Nebraska water demands a harsh penalty to deter others from doing so.   We appreciate the collaboration among federal and state agencies that accomplished this.”

The Nebraska Department of Environmental Quality issued Swift a permit under the Clean Water Act that allowed Swift to discharge wastewater containing limited amounts of pollutants directly to the Wood River and to the city of Grand Island’s publicly owned treatment works (POTW).   The permit prohibited Swift from discharging pollutants that would interfere with the POTW’s treatment process and also required Swift to monitor and report its discharges.   According to the complaint, in which Nebraska joined as a co-plaintiff, Swift violated its permit on numerous occasions between 2006 and 2011 by discharging pollutants in excess of the permitted limits and that caused interference with the Grand Island’s POTW’s treatment process.   Some of these violations resulted in a 2008 fish kill in a 16 mile stretch of the Wood River and a 7.5 mile length of the Platte River.   An estimated 10,000 fish were killed.   The complaint alleges that Swift also violated its permits’ reporting requirements as well as effluent limitations in an emergency order issued by the state of Nebraska in April 2008.    

Swift is headquartered in Greeley, Colo.   Swift’s Grand Island beef processing plant slaughters, fabricates and packages approximately 5,800 head of beef per day.   The plant also conducts blood drying, rendering and hide pickling.   The Grand Island plant has approximately 2,700 employees.

After the fish kill in 2008, Swift undertook voluntary improvements to its treatment system to prevent future upsets at Grand Island’s POTW and to protect aquatic life and beneficial uses, such as fishing, swimming and boating in the Wood and Platte rivers.     The expansion of Swift’s anaerobic treatment system and installation of centrifuges will result in annual pollutant reductions of 1,281,150 pounds of carbonaceous biological oxygen demand (CBOD), 579,438 pounds of total suspended solids (TSS) and 340,195 pounds of oil and grease.   

“EPA Region 7 worked effectively with   Nebraska's Department of Environmental Quality to investigate and remedy this unacceptable pollution of the state's premier river,” said EPA Region 7 Administrator Karl Brooks. “This kind of teamwork typifies EPA's commitment to partnership with states and illustrates this region's dedication to clean water and public health.” 

The consent decree requires Swift to pay more than $1.3 million in civil penalties and damages to natural resources, including a $1.2 million civil penalty for its Clean Water Act violations that will be split evenly between the U.S. and Nebraska.   In addition, Swift will pay Nebraska $100,000 for violations of a state 2008 administrative order and will pay the Nebraska Game and Parks Commission $4,705 for resource damages to restock waters with fish and clams.

This case was brought as part of the National Pretreatment Program, which is a cooperative effort of federal, state and local regulatory environmental agencies established to protect water quality.    The program seeks to protect POTWs from the introduction of pollutants that may interfere with plant operation or that may pass through untreated.    By reducing the level of pollutants discharged by industry into municipal sewage systems, the pretreatment program protects America's multi-billion-dollar public investment in treatment infrastructure. Eighty-five categories of industrial users are subject to numerous self-implementing regulations.

Learn more about EPA’s civil enforcement of the Clean Water Act www.epa.gov/compliance/civil/cwa/cwaenfprog.html.

The consent decree is subject to a 30-day public comment period and approval by the federal court.   A copy of the consent decree is available on the Justice Department Web site at justice.gov/enrd/Consent_Decrees.html.

New Jersey Waste Management Company, Owner and Three Others Arrested for Illegal Dumping Conspiracy in Upstate New York

60 Million Pounds of Asbestos Contaminated Material Dumped at Frankfort, N.Y., Farm

WASHINGTON – The owner of a New Jersey solid waste management company and three of his associates were arrested today on federal charges that they conspired to transport and dump thousands of tons of asbestos contaminated debris at an upstate New York farm containing wetlands, announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division and Richard S. Hartunian, U.S. Attorney for the Northern District of New York.   

Julius DeSimone, 69, of Rome, N.Y., Donald Torriero, 54, of Wellington, Fla., Cross Nicastro II, 59, of Frankfort, N.Y., and Dominick Mazza, 60, of Tinton Falls, N.J., were arrested for the illegal dumping in Frankfort in 2006, as detailed in the seven count indictment.   Dominick Mazza’s New Jersey-based company, Mazza & Sons Inc., was also indicted.   Arrests were made at residences in New York, New Jersey and Florida early today.   The defendants made their initial appearances in federal courts in the Northern District of New York, Southern District of Florida, and District of New Jersey.   The arraignment has tentatively been set for June 13, 2011, in Syracuse, N.Y.  

The indictment describes a scheme to illegally dump thousands of tons of asbestos-contaminated, pulverized construction and demolition debris that was processed at Eagle Recycling’s and Mazza & Sons Inc.’s, New Jersey-based solid waste management facilities.   That asbestos-contaminated debris was then transported to and dumped at Cross Nicastro II’s farm in Frankfort – much of which contained federally-regulated wetlands.   Dumping and excavating operations were managed on-site by Julius DeSimone.  

According to court documents, Donald Torriero and other conspirators concealed the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forging the name of a DEC official on the fraudulent permit.   Once the conspirators learned that they were under investigation, they began a systematic pattern of document concealment, alteration and destruction by destroying and secreting documents responsive to grand jury subpoenas and falsifying and submitting environmental sampling to the U.S. Environmental Protection Agency (EPA).

The indictment charges the defendants with conspiracy to defraud the United States, violate the Clean Water Act and Superfund laws, and commit wire fraud.   Donald Torriero is also charged with wire fraud associated with his fabrication and transmission of the fake permit the conspirators used to conceal the dumping.   Mazza & Sons Inc., and its owner, Dominick Mazza, are charged with violating the Superfund law’s requirement to report the release of toxic materials and obstruction of justice.   Dominick Mazza and Julius DeSimone are charged with making false statements to EPA special agents.   This indictment is related to the guilty pleas entered by Jonathan Deck and Eagle Recycling on Sept. 3, 2009 and April 11, 2011 respectively.  

The conspiracy and substantive Clean Water Act, Superfund, and false statements counts of the indictment each carry a maximum possible term of incarceration of five years and a fine of $250,000, twice the gross gain to the defendants, or twice the gross loss to a victim.    The obstruction of justice and wire fraud counts of the indictment each carry a maximum possible term of incarceration of 20 years and similar fines.  

An indictment is a mere accusation and all defendants are presumed innocent until and unless convicted in a court of law.

This case was investigated by criminal investigators with the New York State Environmental Conservation Police, Bureau of Environmental Crimes; special agents from the EPA's Criminal Investigation Division and the Internal Revenue Service; investigators from the New Jersey State Police, Office of Business Integrity Unit; the New Jersey Department of Environmental Protection; and the Ohio Department of Environmental Protection.   The case is being prosecuted by Assistant U.S. Attorney Craig A. Benedict, of the Northern District of New York, and Todd W. Gleason of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.  

Federal and State Officials Hold Training Conference on Criminal Enforcement of Oil and Natural Gas Extraction in the Marcellus Shale

STATE COLLEGE, PA—Federal and state law enforcement officials concluded a conference today aimed at educating the Pennsylvania and regional law enforcement community on the process of natural gas extraction from the Marcellus Shale formation and the potential impacts on the communities where it is prevalent.

The two-day Marcellus Shale Law Enforcement Training Conference—attended by more than 200 federal, state, and local law enforcement officers, prosecutors, and environmental officials from Pennsylvania, New York, West Virginia, and Ohio—was hosted by the U.S. Department of Justice Environmental and Natural Resources Division and the United States Attorneys for the Eastern, Western, and Middle Districts of Pennsylvania.

The conference focused on potential environmental impacts and law enforcement issues arising from the rapid expansion of natural gas extraction in the Marcellus Shale region. It was also intended to strengthen communication and coordination among federal, state, and local law enforcement.

"As a result of innovations like hydraulic fracturing and directional drilling, oil and gas extraction is occurring with increasing frequency in certain concentrated regions across the nation, including the Marcellus Shale region," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. "Exploration of sources of domestic energy is vital to the national interest. In doing so, we must ensure that all laws intended to protect human health, sources of drinking water, wildlife, and the environment are well understood and enforced to mitigate any potential adverse effects."

Peter J. Smith, United States Attorney for the Middle District of Pennsylvania noted that he and the United States Attorneys from the Eastern and Western Districts of Pennsylvania stated, "Federal, state, and local law enforcement must work together to protect, most diligently the public health, the environment that we are all part of, and the communities that we live in from the harmful byproducts of rapid industrial development and social change. The conference presents us with a great opportunity to launch this joint effort."

According the U.S. Department of Energy, it is projected that shale gas from formations like the Marcellus Shale will comprise over 20 percent of the total U.S. gas supply by 2020. The Marcellus, a naturally occurring shale formation deep below the Earth's surface, is located mostly in Pennsylvania, New York, West Virginia, and Ohio.

The conference provided attendees with an overview of natural gas extraction activities and the state and federal requirements that companies and their subcontractors must follow to ensure that workers, the public and the environment are not put at risk. Conference topics ranged from environmental and financial crimes, first response measures, wastewater disposal, heavy truck enforcement, as well as state and local law enforcement issues.

The Marcellus Shale Law Enforcement Training Conference was supported by the U.S. Environmental Protection Agency (EPA) Criminal Investigations Division, the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigation, Pennsylvania Office of the Attorney General, Pennsylvania District Attorney's Association, Pennsylvania State Police, Pennsylvania Chiefs of Police Association, U.S. Department of Transportation Office of Inspector General, U.S. Fish and Wildlife Service, the U.S. Department of Justice Environmental Crimes Section, Penn State Marcellus Center for Outreach and Research, Lycoming County Department of Public Safety, and the Middle Atlantic-Great Lakes Organized Crime Law Enforcement Network (MAGLOCLEN).

In addition to training sessions by law enforcement and environmental officials, the conference also included presentations by the Marcellus Shale Coalition, the Marcellus Center for Outreach & Research Penn State University, and the Sierra Club.

BP Exploration Alaska to Pay $25 Million Penalty for Alaskan North Slope Oil Spill

WASHINGTON – BP Exploration Alaska, Inc. (BP Alaska) will pay a $25 million civil penalty and carry out a system-wide pipeline integrity management program as part of a settlement for spilling more than 5,000 barrels of crude oil from the company’s pipelines on the North Slope of Alaska in 2006, the U.S. Department of Justice, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) announced today.  The penalty is the largest per-barrel penalty to date for an oil spill.

“This penalty should serve as a wake-up call to all pipeline operators that they will be held accountable for the safety of their operations and their compliance with the Clean Water Act, the Clean Air Act and the pipeline safety laws,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice.  “Companies like BP Alaska must understand that they can no longer afford to ignore, neglect or postpone the proper monitoring and maintenance of their pipelines.  This agreement will help prevent future environmental disasters and protect the fragile ecosystem of Alaska’s North Slope.”

“This penalty is a stern reminder to pipeline operators to follow orders issued by PHMSA or risk a federal civil lawsuit and steep fines,” said PHMSA Administrator Cynthia L. Quarterman.  “Also, it is a warning that operators must know, test and maintain their pipelines or risk harming people and the environment and having to spend, as in this instance, hundreds of millions of dollars replacing those pipelines.”

“Today’s settlement with BP Alaska imposes a tough penalty and requires the company to take action to prevent future pipeline oil spills on the Alaska North Slope,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.  “The Clean Water Act gives the U.S. authority to assess higher penalties when oil spills are the result of gross negligence, and this case sends a message that we intend to use that authority and to insist that BP Alaska and other companies act responsibly to prevent pipeline oil spills.”

“BP Alaska admits that it cut corners and failed to do what was required to adequately maintain its pipelines,” said Karen Loeffler, U.S. Attorney for the District of Alaska.  “The penalty reflects the seriousness of the conduct.  The consent decree is important to ensure that BP Alaska implements changes that will prevent spills like this in the future. The Department of Justice and the United States Attorney's office for the District of Alaska are committed to strong enforcement of our environmental laws."

In March 2006, BP Alaska spilled approximately 5,054 barrels of crude oil on the North Slope in Alaska. A second spill occurred in August 2006, spilling approximately 24 barrels of crude oil.  Investigators from EPA and PHMSA determined that the spills were a result of BP Alaska’s failure to properly inspect and maintain the pipeline to prevent corrosion. PHMSA issued a Corrective Action Order (CAO) to BP Alaska that addressed the pipeline’s risks and ordered pipeline repair or replacement.  When BP Alaska did not fully comply with the terms of the corrective action, PHMSA referred the case to the Department of Justice. Today’s settlement also addresses Clean Air Act violations arising out of BP Alaska’s improper asbestos removal along the pipeline in the aftermath of the spill.

Today’s settlement requires BP Alaska to develop a system-wide program to manage pipeline integrity for the company’s 1600 miles of pipeline on the North Slope based on PHMSA’s integrity management program.  The program will address corrosion and other threats to these oil pipelines and require regular inspections and adherence to a risk-based assessment system.  The program will cost an estimated $60 million over three years and is in addition to the approximately $200 million BP Alaska has already spent replacing the lines that leaked on the North Slope.

Of the $25 million penalty, $20.05 million will be deposited in the Oil Spill Liability Trust Fund established under the Clean Water Act.  The remainder, $4.95 million, will be paid to the U.S. Treasury.  The funds paid to the Oil Spill Liability Trust Fund will be used to finance federal response activities and provide compensation for damages sustained from future discharges or threatened discharges of oil into water or adjoining shorelines. Oil spills are known to cause both immediate and long-term harm to human health and ecosystems, including the suffocation of wildlife and the contamination of nesting habitats.

In 2007, BP Alaska pleaded guilty to one misdemeanor violation of the Clean Water Act for the March 2006 spill and was sentenced to three years probation, ordered to pay a $20 million criminal penalty, including a $12 million fine, $4 million to the National Fish and Wildlife Foundation to support research and activities on the North Slope and pay $4 million in restitution to the state of Alaska.

The consent decree, which is subject to a 30-day public comment period and final court approval, is available at justice.gov/enrd/.

More information on the settlement epa.gov/compliance/resources/cases/civil/cwa/bpnorthslope.html.

Idaho Mining Company Agrees to Pay $1.4 Million Penalty to Settle Alleged Clean Water Act Violations

WASHINGTON – The Department of Justice and the Environmental Protection Agency (EPA) announced today that P4 Production LLC, a mining and phosphorus processing company wholly-owned by Monsanto and operating near Soda Springs in southeast Idaho, has agreed to pay a $1.4 million civil penalty for alleged Clean Water Act violations at its South Rasmussen Mine.   In addition to the penalty, P4 will spend an estimated $875,000 on monitoring and to prevent pollutants from entering local waters.  

“The Justice Department and the EPA are committed to enforcing the Clean Water Act to reduce pollution from mining and mineral processing operations,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice.   “Clean water is essential for human health, as well as for healthy livestock, fish and wildlife.   Today’s settlement agreement will make Idaho’s waters cleaner by preventing selenium and other hazardous pollutants generated by P4’s mining operations from entering local creeks and wetlands.”

“Today’s settlement resolves a long-standing hazard to fish, wildlife and the environment in southeast Idaho,” said Edward Kowalski, director for EPA's Seattle Office of Enforcement and Compliance.   “Selenium pollution is a serious problem in this part Idaho, and this enforcement action by EPA is one part of the long-term effort to clean up the phosphate patch.”

According to the complaint, P4 allegedly discharged wastewater containing high concentrations of selenium and heavy metals from a waste rock dump at the mine without a required permit.   Further, P4’s unpermitted discharges - which contained selenium levels far above Idaho’s state water quality standards – allegedly polluted a nearby wetland and an unnamed tributary of Sheep Creek, as well as downstream waters that drain to the Snake River.

Phosphate mines in the area, including the South Rasmussen Mine, are known to contain high levels of selenium in their waste rock.   Rainwater and weathering allow the selenium to leach from the waste rock piles and enter nearby surface water.   Sheep, horse and cattle deaths in southeast Idaho have been linked to selenium contamination of plants.   Selenium in high concentrations can be toxic to a variety of fish and wildlife and is also known to bio-accumulate, and affect organisms in the aquatic food chain. Monsanto uses phosphate from the South Rasmussen Mine to manufacture Roundup.

Under the terms of the consent decree, P4 will pay the U.S. $1.4 million and it agrees to:

Continue collecting selenium-contaminated leachate from the waste rock pile and prevent leachate from entering nearby creeks and wetlands until such time as the company either obtains an National Pollution Discharge Elimination System permit, or it undertakes a restoration of the waste rock dump under another state or federal order.

Perform downstream monitoring for a period of five years to ensure that selenium-contaminated water is no longer leaving the site.

The settlement is part of EPA’s enforcement initiative to reduce pollution from mining and mineral processing operations. Mining and mineral processing facilities generate more toxic and hazardous waste than any other industrial sector, waste that when not properly managed, can impact surrounding communities and pose a serious risk to public health and the environment. To reduce these risks, EPA is working to ensure mining and mineral processing industry compliance with environmental laws.  

The settlement was lodged today in the U.S. District Court of Idaho. There will be a 30-day public comment period during which the United States will accept comments on the settlements before it is presented to the court for entry.

Terra Industries Inc. to Pay $625,000 Clean Air Act Penalty and Spend $17 Million to Install Pollution Controls at Acid Plants in Iowa, Mississippi and Oklahoma

WASHINGTON – Terra Industries Inc., one of the nation’s largest producers of nitric acid and nitrogen fertilizers, has agreed to pay $625,000 in civil penalties to settle alleged violations of the federal Clean Air Act at nine of its plants in Iowa, Mississippi and Oklahoma, the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.

As part of the settlement, Terra will also spend an estimated $17 million to install and implement new controls and technologies that are expected to reduce harmful nitrogen oxide emissions at its facilities by at least 1,200 tons per year.

“This agreement will require Terra Industries to make important improvements in pollution control technology at nine acid-producing facilities that will result in cleaner and healthier air for the benefit of communities in Iowa, Mississippi and Oklahoma,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This is a notable achievement in our efforts, alongside the Environmental Protection Agency, to address the largest sources of harmful air pollution and bring about company-wide compliance with the Clean Air Act.”

“Illegal air pollution from the production of nitric acid can leave the public vulnerable to long-term health problems such as respiratory illness and asthma,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Bringing Terra into compliance with the Clean Air Act will protect the public health of communities across Iowa, Mississippi and Oklahoma.”

Terra is a major U.S. producer of nitrogen fertilizers, including anhydrous ammonia, urea, ammonia nitrate,and urea-ammonium nitrate (UAN).  The company also produces nitric acid, a key intermediate in the manufacture of ammonium nitrate and UAN.

The production of nitric acid results in the emission of nitrogen oxides, which can cause lung damage, worsen respiratory diseases, contribute to acid rain and lead to the formation of smog.

Terra, headquartered in Sioux City, Iowa, will pay $325,000 to the United States and $100,000 each to Iowa, Mississippi and the Oklahoma Department of Environmental Quality – co-plaintiffs in the action filed today in U.S. District Court in Sioux City.

Terra’s nine plants covered by the settlement include four nitric acid plants at Yazoo City, Miss.; two each at Sergeant Bluff, Iowa, and Verdigris, Okla.; and one at Woodward, Okla.

According to the consent decree, Terra allegedly constructed, modified and operated its facilities without obtaining appropriate pre-construction and operating permits, and without installing best available control technology for controlling air pollution. Terra also allegedly violated the Clean Air Act by failing to comply with applicable air emission limits and ongoing requirements for emissions monitoring, recordkeeping and reporting at some of its facilities.

Reducing air pollution from the largest sources of emissions, including acid facilities, is one of EPA’s National Enforcement Initiatives for 2011-2013. The initiative continues EPA’s focus on improving compliance with the new source review provisions of the Clean Air Act among industries that have the potential to cause significant amounts of air pollution.  In fiscal year 2010, EPA’s enforcement actions in the cement manufacturing, coal-fired power plant, glass and acid sectors led to approximately 370 million pounds of pollution reduced or treated, $1.4 billion in estimated pollution controls and $14 million in civil penalties.

The consent decree, which is subject to a 30-day public comment period and final court approval, is available at: www.justice.gov/enrd/

Learn more about EPA’s civil enforcement of the Clean Air Act: www.epa.gov/compliance/civil/caa/index.html.

New Jersey Solid Waste Management Facility Pleads Guilty to Illegal Dumping in Upstate New York

Eagle Recycling Defrauded the United States and Violated Clean Water and Wire Fraud Laws

WASHINGTON – Lieze Associates, dba Eagle Recycling of New Jersey, pleaded guilty today in federal court in Utica, N.Y., for conspiring to violate the Clean Water Act and to defraud the United States, the U.S. Attorney’s Office for the Northern District of New York and the U.S. Justice Department Environment and Natural Resources Division announced today.

Eagle Recycling pleaded guilty before U.S. District Judge Hurd for the Northern District of New York to one criminal felony count for conspiring to violate the Clean Water Act’s prohibition on filling wetlands and committing wire fraud to conduct that filling. According to the charges, Eagle Recycling and other co-conspirators, engaged in a multi-year scheme to illegally dump 8,100 tons of pulverized construction and demolition debris that was processed at Eagle Recycling’s North Bergen, N.J., solid waste management facility and then transported to a farmer’s property in Frankfort, N.Y.

According to court documents, Eagle Recycling and other conspirators concealed the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forged the name of a DEC official on the fraudulent permit.   Eagle Recycling admitted in the plea agreement that once DEC and the U.S. Environmental Protection Agency (EPA) learned of the illegal dumping, the company began a systematic pattern of document concealment, alteration and destruction including, but not limited to, destroying documents during the execution of a federal search warrant, secreting documents responsive to grand jury subpoenas, falsifying certifications submitted to the Grand Jury, and falsifying and submitting environmental sampling to the EPA.

As part of the plea agreement, Eagle Recycling has agreed to pay a criminal fine of $500,000, to implement an environmental compliance plan at its North Bergen facility, and to pay restitution which potentially includes cleanup costs at the Frankfort, N.Y., site.

U.S. Attorney Richard S. Hartunian said “This case is another example of our continued efforts to aggressively prosecute those who illegally pollute the environment.   The joint efforts of the state and federal investigation team that brought this case to a successful conclusion are to be commended.”

“This investigation underscores the extent that environmental polluters will go to avoid New York and federal environmental laws,” said New York State Department of Environmental Conservation Commissioner Joe Martens.   This long term investigation, first stated in 2006, highlights the complexity of the crime and propensity of the criminal actors to cross state lines to help cover their actions. It was only through the cooperative investigation by the New York State Environmental Conservation Police, Bureau of Environmental Crimes (BECI), EPA, US Attorney’s office and the New Jersey State Police that this criminal enterprise was uncovered and further environmental damage avoided."

Today’s plea is related to the plea of Jonathan Deck who pleaded guilty to similar conspiracy charges in late-2009.   Sentencing has been scheduled for Sept. 9, 2011.

This case was investigated by Criminal Investigators with the BECI; Special Agents from the EPA's Criminal Investigation Division and the Internal Revenue Service; investigators from the New Jersey State Police Office of Business Integrity Unit; the New Jersey Department of Environmental Protection; and the Ohio Department of Environmental Protection.   The case is being prosecuted by Assistant U.S. Attorney Craig A. Benedict, of the Northern District of New York, and Todd W. Gleason of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.