Environmental Fraud

January 19, 2021

U.S. Magnesium will pay a civil penalty of $250,000 and undertake at least $37 million in modifications and upgrades to its Rowley, Utah facility to reduce the volume and toxicity of waste generated at the facility, treat all wastewater, and prevent leaks from the facility to the Great Salt Lake.  EPA

January 14, 2021

Toyota Motor Company and its affiliates have agreed to pay a $180 million penalty and undertake compliance efforts to resolve civil claims of violations of the Clean Air Act.  In a consent judgment, Toyota admitted that between 2005 and 2015, it failed to timely submit required reports regarding defects in emissions control systems and recalls to repair emissions systems defects, and failed to even implement systems designed to determine whether such reports were required, despite objections from Toyota staff.  As a result, Toyota avoided disclosure of emission systems defects.  DOJ

December 21, 2020

Government contractor Schneider Electric Buildings Americas Inc. will pay a total of $11 million to resolve criminal and civil claims that it overcharged the government on eight separate energy savings performance contracts under which the company was to install energy upgrades including solar panels, LED lighting, and insulation, in federal buildings.  The company admitted to wrongdoing including the disguising of unauthorized design costs by charging them to unrelated contract components and the receipt of kickbacks from subcontractors on the ESPCs. $9.3 million of the settlement resolves civil liability under the False Claims Act and Anti-Kickback Act; $1.7 million is denominated as criminal forfeiture.  DOJ

December 17, 2020

Retailer Home Depot U.S.A. Inc., which hires contractors to perform home renovations for Home Depot customers across the country, will pay $20.75 million as a penalty under the Toxic Substances Control Act to resolve allegations that the company failed to ensure that those contractors took adhered to lead paint safety requirements.  In addition to the penalty, Home Depot agreed in a consent decree to implement a compliance program to ensure that the firms and contractors it hires to perform work are certified and trained to use lead-safe work practices to avoid spreading lead dust and paint chips during home renovation activities.  DOJ

December 1, 2020

Singapore-based international shipping company Pacific Carriers Limited (PCL) was ordered to pay a fine of $12 million following its guilty plea to charges including its violation of the Act to Prevent Pollution from Ships.  PCL admitted that its ship the M/V Pac Antares discharged oily bilge water, oil waste, oily garbage, and plastic, without using required pollution-prevention equipment or properly recording the discharges in the vessel’s oil record book or garbage record book.  Some oily waste discharges were made through a laundry sink which discharged directly overboard, and inspectors discovered a configuration of drums, flexible hoses and flanges that were used to bypass the vessel’s oily water separator.  In addition, PCL admitted that the ship stored oily waste in the duct keel in a manner that created a hazardous condition subject to reporting.  The problems were reported to Customs and Border Protection by a crewmember who walked off the ship when it arrived in North Carolina.  DOJ

October 10, 2020

The owners of Keystone Biofuels Inc., Ben Wootton and Race Miner, were sentenced to approximately 5.5 years imprisonment each and they and Keystone were ordered to pay restitution and fines totaling $9.23 million to the IRS and Pennsylvania Department of Environmental Protection following their convictions at trial for charges relating to their renewable fuels scam.  The defendants falsely claimed that they were able to produce biodiesel that permitted them to create renewable fuel credits known as RINs; then then sold both the non-qualifying fuel and the fraudulently-created RINs.  In addition, Keystone claimed federal tax refunds under the IRS Biofuel Mixture Credit program, creating false books and records to conceal the non-qualifying, and in some cases non-existent, fuel.  DOJ

September 14, 2020

German automaker Daimler AG and its U.S. subsidiary Mercedes-Benz USA, LLC will pay $1.06 billion and undertake a recall valued at $436 million to resolve claims that they violated the Clean Air Act and California law in allegedly manufacturing and selling diesel automobiles between 2009 and 2016 that had undisclosed auxiliary emission control devices and defeat devices.  These devices caused the vehicles to appear to pass emissions requirements during testing despite the fact that during ordinary usage the vehicles produced NOx emissions above compliant levels.  The recall and repair program requires defendants to bring the vehicles into compliance with applicable emissions standards by removing all defeat devices from the affected vehicles, replacing hardware, and updating software.  The total monetary settlement consists of $875 million in civil penalties, $70.3 million in other penalties, and $110 million to fund mitigation projects in California.  Defendants also agreed to implement corporate compliance reforms.  DOJ; CA

August 6, 2020

Following his conviction at trial on charges to defraud the EPA and IRS, David Dunham, who had ownership interests in Smarter Fuel LLC and Greenworks Holdings LLC, was sentenced to seven years in prison and ordered to pay restitution of $10.21 million.  Dunham fraudulently applied for, received, and sold over $50 million in EPA, IRA, and USDA credits and payments for producing biofuels that he, in fact, did not produce and, in many instances, had never possessed in the first place.  DOJ