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In FY 2013, the EPA’s criminal enforcement actions resulted in more than $4.5 billion in combined fines, restitution and court-ordered environmental projects. But when it comes to willful and egregious environmental violations, the guilty parties also can expect another type of punishment – prison time.
In March 2013, the owner of a Texas bio-diesel company was sentenced for 51 counts of wire fraud, 24 counts of money laundering and four counts of making false statements in violation of the Clean Air Act (CAA) after pleading guilty in a scheme to defraud the EPA. According to the EPA, the defendant represented himself as the owner of a bio-diesel fuel production facility, but did not actually produce any such fuel. At the same time, however, he produced and sold renewable fuel credits based on that nonexistent biofuel production. Oil companies and brokers purchased the credits by wiring payments to a bank account controlled by the owner, totaling almost $45 million from 51 transactions spanning September 2010 through October 2011.
Adding insult to injury, the defendant then used the money to purchase $12 million in real and personal property including high-end vehicles, a military tank, an airplane, real estate, and season tickets to professional basketball games. Following a joint investigation by the EPA and the U.S. Secret Service, the man received a $175,000 fine, 188 months in federal prison and was ordered to pay almost $55 million in restitution.
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In the same month, the environmental manager of a New York company was found guilty of 11 counts of violating the CAA, one count of obstruction of justice and an additional three counts of violating the Resource Conservation and Recovery Act (RCRA). In the “historic verdict,” the court found the offenses related to the release of coke oven gas containing benzene via an unreported pressure relief valve and the lack of baffles in the facility’s coke-quenching tower as required under Title V of the CAA. The defendant was also found to have instructed another employee to conceal the emissions during an EPA inspection.
In addition, the company also violated RCRA regulations by mixing coal tar sludge, a listed hazardous waste, on the ground in violation and did not have a permit as required to treat, store and dispose of hazardous wastes. Bottom line, the charges carried a maximum combined penalty of as many as 75 years in prison and more than $200 million in fines.
Also in New York, two defendants, one a landowner and the other a recycling company owner, were found guilty in a case involving conspiracy to dump thousands of tons of construction and demolition debris, much of it containing asbestos, in federally regulated wetlands without a permit. Over a period of five years, the court found the two men conspired to fill in the entire 28-acre site on the Mohawk River owned by one defendant with the debris that had been processed at facilities in New Jersey, including facilities owned by the other defendant.
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The investigation also revealed that the defendants attempted to conceal the dumping conspiracy by creating their own fraudulent permit from the New York State Department of Environmental Conservation (DEC) including forging the signature of a DEC official. In addition, the company owner was also convicted of obstructing justice and making false statements to law enforcement.
Although the planned dumping was halted before the wetland was completely filled, the court handed down some very stiff sentences. The company owner was sentenced to 51 months in prison followed by three years of supervised release, a $75,000 fine and $492,000 in restitution. His company was also fined $75,000 with $494,000 in restitution, five years of corporate probation, and was ordered to fund and implement an environmental compliance plan at its Tinton Falls, New Jersey facility to be administered by a third party. The land owner was also sentenced to 33 months in prison with three years supervised release and ordered to pay a $25,000 fine and $492,494 in restitution.