Environmental Fraud

November 22nd, 2017

California announced a settlement with DIRECTV to resolve allegations that its California facilities unlawfully disposed of large volumes of hazardous waste – including hazardous batteries, electronic devices, and aerosols – and committed additional violations stemming from the mismanagement of such items. These acts constitute violations of California’s Hazardous Waste Control Law, and of California’s Unfair Competition Law, as such conduct gives DIRECTV a competitive advantage over other regulated entities that are complying with the law. On November 21, 2017, by stipulation of the parties, the Alameda County Superior Court entered a final judgment incorporating the terms of the settlement. As part of the settlement, DIRECTV will be required to pay more than $8.9 million for civil penalties, costs, and projects furthering environmental protection; will be bound by a permanent injunction prohibiting similar future violations of law; and will have to spend more than $580 thousand over the next five years to enhance environmental compliance at its California facilities. CA

June 29, 2017

XIK, LLC, Honeywell International, Inc., and Domtar, Inc. agreed to pay $8.2 million to resolve a claim for natural resource damages at the St. Louis River/Interlake/Duluth Tar Superfund Site brought under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund Law.  The polluted site consists of 255 acres of land and river embayments located primarily in Duluth, Minnesota, and extends into the St. Louis River, including Stryker Bay.  DOJ

August 2, 2017

Andre Bernard, of Mount Kisco, New York, pleaded guilty for his participation in a multi-state scheme to defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel credits and fraudulently claiming tax credits. According to his plea, Bernard conspired with Thomas Davanzo, of Estero, Florida, Robert Fedyna, of Naples, Florida, and Scott Johnson of Pasco, Washington in a scheme to defraud biodiesel credit (known as "RIN" credits) buyers and U.S. taxpayers. The conspiracy involved having Gen-X Energy Group (Gen-X), headquartered in Pasco, Washington, and its subsidiary, Southern Resources and Commodities (SRC), located in Dublin, Georgia, generate fraudulent RINs and tax credits multiple times on the same material. Bernard and his co-conspirators operated several shell companies that claimed to purchase and sell the renewable fuel. The co-conspirators received at least $42 million from the sale of these fraudulent RINs to third parties. In addition, Gen-X received approximately $4,360,724.50 in false tax credits for this fuel. DOJ

July 11, 2017

Four paint companies have agreed to settle FTC charges that they deceptively promoted products as emission-free or containing zero volatile organic compounds, including during and immediately after application. Some promotions also made explicit safety claims regarding babies, children, pregnant women, and other sensitive populations. However, the FTC alleged, the companies had no evidence to support these claims. The four companies, Benjamin Moore & Co., Inc., ICP Construction Inc., YOLO Colorhouse, LLC, and Imperial Paints, LLC, have agreed to orders that would bar them from making unqualified emission-free and VOC-free claims unless, at all times during application and after, both content in and emissions from their paints are actually zero, or emissions are at “trace levels,” as defined in the orders. FTC

June 20, 2017

Egyptian-based Egyptian Tanker Company and Singapore-based Thome Ship Management pleaded guilty and agreed to pay a $1.9 million penalty for violating the Act to Prevent Pollution from Ships (APPS) and for obstruction of justice for covering up the illegal dumping of oil-contaminated bilge water and garbage from one of their ships into the sea. DOJ

April 19, 2017

Princess Cruise Lines Ltd. was sentenced to pay a $40 million penalty related to illegal dumping of oil contaminated waste and falsification of official logs in order to conceal the discharges.  It was the largest-ever penalty for crimes involving deliberate vessel pollution.  The court also ordered that a $1 million whistleblower reward be awarded to the British engineer who first reported the illegal discharges to the British Maritime and Coastguard Agency, which in turn provided the evidence to the U.S. Coast Guard. DOJ