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Top Ten Environmental Fraud Settlements for 2020

Posted  March 12, 2021

In many ways, the COVID-19 pandemic uprooted our routines and put life on pause in 2020. But environmental fraud continued unabated, and so did enforcement actions against the perpetrators.

We saw two major enforcement actions relating to devices designed to evade emissions requirements, several enforcement actions relating to water contamination and the knowing sale of products containing harmful pollutants, and several more against companies who took advantage of environmental tax credits.

Let’s take a look at the top 10 environmental fraud recoveries, by the dollars, for 2020:

  1. Daimler – $1.5 billion: First place goes to a September settlement between the government and Daimler and its U.S. subsidiary Mercedes-Benz. The automakers agreed to pay $1.06 billion and undertake a $436 million recall to resolve allegations that they sold diesel automobiles fitted with undisclosed auxiliary emission control devices and defeat devices designed to cheat emissions requirements. These devices caused the vehicles to appear compliant during emissions testing, even though they produced above compliant levels of NOx emissions during ordinary use.
  2. Atlantic Richfield – $150 million: Second place goes to the Butte Priority Soils Operable Unit consent decree, which requires Atlantic Richfield to pay for the cleanup of mining-related contamination to the tune of $150 million.
  3. Monsanto – $147 million: The bronze medal goes to the enforcement actions against this repeat offender that agreed to pay $95 million to the state of Washington and $52 million to the District of Columbia to resolve allegations that the company sold PCBs over several decades, even though it knew the chemicals would cause significant environmental harm to waterways, wildlife, and humans.
  4. Wolverine Worldwide – $69.5 million: Wolverine Worldwide settled claims alleging the company polluted residential drinking wells in Michigan with PFAS for $69.5 million.
  5. Hybrid Tech – $29 million: In January, Hybrid Tech Holdings LLC, Hybrid Technology LLC, and Ace Strength International LTD paid $29 million to resolve bid-rigging allegations relating to an auction for a loan made under the Department of Energy’s Advanced Technology Vehicles Manufacturing loan program. The companies allegedly exerted pressure on other bidders to suppress their bids and, as a result, were able to purchase the loan from the government for $25 million and then resell the loan for $149.2 million less than a year later. Two whistleblowers who filed a False Claims Act case regarding these allegations were awarded $5.2 million of the recovery.
  6. Renewable Fuel Credit Scams – $27 million and 35 years imprisonment:  Three sets of fraudsters were convicted of engaging in separate schemes to secure renewable fuels tax credits by fraudulently claiming they produced renewable fuels. Ben Wootton and Race Miner, the owners of Keystone Biofuels Inc., each were sentenced to over five years in prison and jointly owed over $9 million in restitution and fines.  Matthew Taylor of Shintan, Inc., earned 7 years and $7.2 million in restitution.  David Dunham Jr. was sentenced to seven years in prison and a restitution order of $10 million.
  7. Home Depot – $20.75 million: Home Depot agreed to pay a $20.75 million penalty under the Toxic Substance Control Act to resolve allegations regarding its failure to ensure its home renovation contractors adhered to lead paint safety requirements.
  8. Kohler – $20 million: In January, Kohler agreed to pay $20 million to resolve claims that it manufactured and sold engines used in mowers, landscaping equipment, and generators that incorporated defeat devices to cheat emissions standards.
  9. PCL – $12 million: The Singapore-based shipping company was fined $12 million after admitting to improperly discharging oily waste and plastic and storing oily waste in a hazardous manner in violation of the Act to Prevent Pollution from Ships. The allegations came to light after a crewmember blew the whistle to Customs and Border Protection.
  10. Schneider Electric – $11 million: Last but not least, government contractor Schneider Electric agreed to pay $11 million to resolve claims regarding kickbacks from subcontractors and overcharges to the government on numerous energy savings performance contracts. Schneider Electric allegedly disguised unauthorized costs as charges for unrelated contract components.

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Annual Whistleblower Insider Top Ten Lists

Every January, Whistleblower Insider looks back at the significant government enforcement actions of the past year. Our Top Ten lists highlight the biggest recoveries and significant enforcement efforts by different government actors in cases of interest to whistleblowers.
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