Environmental Fraud

October 15, 2019

Nederland Shipping Company and Chartworld Shipping Company, the Liberia-incorporated owners and operators of a the cargo ship M/V NEDERLAND REEFER, have agreed to pay $1.8 million for violating the Act to Prevent Pollution from Ships (APPS).  During a Coast Guard inspection of the ship at a port in Delaware, inspectors found that chief engineer Vasileios Mazarakis was routinely tricking an oil content monitoring device into discharging oily water at sea before it could be processed by an Oily Water Separator (OWS), then falsifying the ship’s Oil Record Book (ORB).  Mazarakis eventually plead guilty to falsifying the ORB as well as obstructing the Coast Guard’s investigation.  The companies will be placed on a four-year probation period to ensure that company ships entering U.S. waters comply with applicable maritime laws.  The APPS has a whistleblower reward provisions that incentivizes the reporting of this sort of illegal activity. DOJ

September 30, 2019

Charles Jansky and his companies Somont Oil Company and Ferdig Oil Company will pay $137,500 to resolve alleged violations of the False Claims Act arising from the underpayment of royalties allegedly owing for the pumping of natural gas from federal leases in Montana held by Somont.  In reporting gas produced, Somont failed to disclose the relationship between Somont, Ferdig, and Jansky.  USAO MT

June 18, 2019

Auto parts retailer AutoZone, Inc., has agreed to pay $11 million to the State of California and its political subdivisions to resolve charges that the company illegally disposed of hazardous waste by allowing its customers to deposit hazardous automotive fluids and other waste items into regular trash containers in AutoZone stores’ parking lots throughout California.  The company was also found to have improperly disposed confidential consumer information. CA

September 19, 2019

Following an earlier criminal plea, Hyundai Construction Equipment Americas Inc. and Hyundai Heavy Industries Co. Ltd have agreed to pay a $47 million civil penalty to resolve allegations that the company violated Title II of the Clean Air Act by marketing and selling heavy construction vehicles that did not comply with applicable emission standards.  Hyundai had stockpiled diesel engines that met outdated standards, including standards for nitrogen oxides (NO_x) and particulate matter (PM), then illegally imported the non-compliant equipment to the U.S.  The EPA opened an investigation into Hyundai after receiving a whistleblower tip in 2015.  DOJ

September 12, 2019

Performance Diesel Inc. will pay a civil penalty of $1.1 million and terminate its sale of aftermarket products meant to defeat the emissions control systems of heavy-duty diesel engines.  The settlement with DOJ and the EPA resolves allegations that the company violated the Clean Air Act in manufacturing, selling, and installing illegal defeat devices. DOJ

September 5, 2019

Italian shipping company d'Amico Shipping Italia S.p.A. will pay $4 million following a guilty plea on charges that violated the Act to Prevent Pollution from Ships by deliberately concealing that crew on its oil tanker the M/T Cielo di Milano intentionally bypassed pollution prevention equipment and discharged bilge water and oily waste from the vessel’s engine room through its sewage system into the sea while the ship was in U.S. waters.  The defendant falsified the vessel's Oil Record Book, made false statements to the Coast Guard during inspection, and destroyed the vessel's sounding log.  USAO NJ

August 15, 2019

ManTech Advanced Systems International, Inc., a subcontractor on a project with the Environmental Protection Agency, will pay $750,000 to resolve allegations that a project manager required to have top secret clearance had his clearance revoked during the term of the contract.  In addition, when the contract was extended, ManTech again represented that the project manager had top secret clearance.  Despite the revoked clearance, ManTech billed the EPA over $325,000 for the individual's services.  USAO ED VA.

June 3, 2019

Princess Cruise Lines Ltd. and its parent company Carnival Cruise Lines & plc will pay a $20 million criminal penalty for violating its probation resulting from a 2017 criminal proceeding in which the companies paid a $40 million penalty.  The companies were subject to ongoing compliance monitoring as a result of the earlier proceeding, and that monitoring detected numerous ongoing violations.  Defendants admitted to failing to implement an effective compliance program, seeking to evade their compliance obligations, falsifying records, and illegally discharging waste.  DOJ