Environmental Fraud

August 26, 2022

Houston-based Amplify Energy Corp. and two of its subsidiaries will plead guilty to violations of the Clean Water Act and pay a criminal penalty of $7.1 million to resolve charges arising from the October, 2021 discharge of approximately 25,000 gallons of crude oil from the San Pedro Bay Pipeline in Long Beach, California.  Defendants overrode multiple lead detection alarms to continue transferring crude oil from offshore facilities for processing, resulting in the leak from a crack in the pipeline.  In addition to the criminal penalty, defendants have agreed to pay approximately $5.8 million to compensate government agencies for response expenses, and implement additional compliance measures.  USAO CD Cal

August 24, 2022

James R. Lee and entities affiliated with him – Lee Oil Company, Inc., Whitesville Producing Corporation, Whitesville Production Corp., Allegro Oil & Gas Inc., and Allegro Investments Corporation – have been ordered to pay a penalty of $2 million for their failures to follow environmental laws with respect to over 400 oil wells they operated in western New York State.  The court found numerous violations, including defendants’ failures to plug over 400 wells and their failures to file required reports.  NY

August 1, 2022

FCA US LLC, formerly Chrysler Group LLC, will pay over $96 million in fines, forfeit an additional $203 million, in addition to 3 years of organizational probation for its conspiracy to defraud regulators about emissions control systems on its 2016 Jeep Grand Cherokee and Ram 1500 diesel vehicles from 2014 to 2016. FCA US marketed these vehicles as “clean EcoDiesel” and as having best-in-class fuel efficiency. What they didn’t disclose, however, is that FCA beat the regulatory scrutiny by installing software designed to manipulate emissions controls through “cycle detection” and “cycle beating,” without which the vehicles would not have passed federal tests. DOJ, EDMI

July 25, 2022

DCP Operation Company LP and five other DCP Midstream LP subsidiaries will pay $3.25 million and will take corrective actions to strengthen leak detection and repair processes at eight Weld County, Colorado natural gas processing plants. DCP’s inadequate leak detection and repair requirements caused excess emissions of volatile organic compounds and other pollutants into the atmosphere, a violation of the Clean Air Act. The failures were discovered by Colorado’s innovative Air Pollution Control Division’s Leak Detection and Repair Program. DOJ

June 8, 2022

Real estate developer Baldwin & Sons was fined $6.6 million based on its failures to control erosion and runoff, or contain fluids leaking from equipment, at a luxury home construction site in Orange County, and its failure to implement required best management practices.  The state also found that Baldwin ignored numerous corrective and cease-and-desist orders.  CA

June 3, 2022

FCA US LLC, formerly Chrysler Group LLC, has pleaded guilty to making false and misleading representations about emissions control systems on Jeep Grand Cherokees and Ram 1500s for the 2014-2016 model years.  The company will pay a criminal fine of nearly $100 million, and forfeit over $200 million, for a total of $300 million in penalties.  Fiat Chrysler marketed the vehicles as “clean EcoDiesel,” but installed software features to fraudulently help the vehicles meet emissions standards during testing that could not be met under normal driving conditions.  DOJ

May 24, 2022

The owners of the Motor Vessel Joanna, Empire Bulkers Limited and Joanna Maritime Limited, will pay $2 million and plead guilty to violations of the Act to Prevent Pollution from Ships, admitting to knowingly falsifying the ship’s Oil Record Book to conceal unlawful discharges of oil.  Modifications to the vessel’s oil content monitor had been made so that discharge samples from the oily water separator were diluted with fresh water, thereby leading the oil content monitor to report erroneous concentrations.  DOJ; USAO ED LA

April 5, 2022

Wind energy provider ESI Energy Inc. pleaded guilty to violations of the Migratory Bird Treaty Act (MBTA), agreeing to fines and restitution of $8 million and to implement management and mitigation programs valued at up to $27 million in order to minimize eagle deaths associated with its facilities.  ESI did not apply for “eagle take permits” in connection with wind energy facilities it constructed and operated.  The government alleged that ESI sought to avoid MBTA requirements that could have delayed operation of its facilities or reduced their operation, and received hundreds of millions of dollars in federal tax credits for generating electricity from wind power at facilities that it operated, knowing that multiple eagles would be killed and wounded without legal authorization.  USAO WY

March 9, 2022

Chevron Phillips Chemical Company LP has agreed to pay a $3.4 million penalty and undertake compliance measures valued at $118 million to resolve a federal complaint regarding alleged violations of the Clean Air Act and related laws arising from its flaring at petrochemical facilities in Cedar Bayou, Port Arthur, and Sweeney, Texas.  The government claimed that Chevron Phillips failed to properly operate and monitor its industrial flares, which resulted in excess emissions of harmful air pollution at the three facilities.  EPA