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Compliance and Enforcement Annual Results:
FY2005 Criminal Enforcement Highlights

FY2005 Annual Results Topics

The Criminal Enforcement Program investigates and assists in the prosecution of environmental violations that are willful or negligent in nature. The following summaries are cases with significant outcomes for the fiscal year 2005. These include the longest sentence ever for an environmental violation, firsts in federal prosecution for certain violations and other cases which have a national significance.

The Fiscal Year 2005 Criminal Enforcement Highlights report contains the following categories:

Air

AAR Contractor, Inc.

In December 2004, Alexander Salvagno and Raul Salvagno, owner operators of AAR Contractor, Inc., were sentenced to 25 years and 19 years and 7 months of imprisonment, respectively. The sentences are the longest in federal environmental crimes history. The Salvagnos conducted illegal asbestos abatement activities over a 10-year period at more than 1,550 facilities throughout New York state -- including elementary schools, churches, hospitals, military housing, theaters, cafeterias, the New York State Legislature Office Building, public and commercial buildings of nearly every sort and private residences. The defendants directed illegal activities of 500 asbestos workers and laboratory officials. As many as 100 former AAR workers are now substantially likely to develop asbestosis, lung cancers or mesothelioma, a fatal form of cancer. Additionally, the defendants were ordered to pay restitution of over $23 million and forfeited additional sums of over $5.7 million under the federal racketeering laws.

Tyler Pipe Company

In March 2005, Tyler Pipe Company, one of the largest manufacturers of iron pipes and castings in the U.S., pled guilty to two felony counts in the first criminal prosecution for violations of the new source review/prevention of significant deterioration provisions of the Clean Air Act. The company paid a $4.5 million criminal fine and will undertake an estimated $11 million in upgrades to the facility to reduce future pollution. The prosecution arose from Tyler Pipe's illegal construction and operation of a scrap metal furnace at its facility near Tyler, Texas. The furnaces melt scrap metal to produce molten iron, which generates substantial air pollution, including significant emissions of particulate matter, carbon monoxide and lead. Tyler Pipe razed its old plant furnace and replaced it with a new one. Under the CAA's prevention of significant deterioration provisions, Tyler Pipe was required to apply to the Texas Commission on Environmental Quality for permission to construct and operate the new furnace using the best available control technology. Instead, Tyler Pipe concealed the construction of the new furnace from the state commission and connected it to the existing pollution control device, a water scrubber designed and built in the 1960s.

Phillip H. Cohn

In May 2005, Phillip H. Cohn, of St. Louis, Mo., was sentenced to 60 months imprisonment and five years supervised release. Cohn was also ordered to pay $347,200 restitution to East St. Louis, Ill., School District 189. Cohn had previously pled guilty to submitting false invoices to the school district purportedly for environmental cleanup work at the Clark Middle School site. On the environmental Clean Air Act charge, Cohn failed to remove substantial quantities of known asbestos - containing materials from the historic Spivey Building in East St. Louis, before sending work crews into the building to conduct demolition and renovation work. He then caused the endorsements of environmental companies to be forged on checks issued from an escrow account and used the money - approximately $350,000 - for personal expenses. As part of his plea agreement, Cohn agreed to make full restitution to School District 189.

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Water

Bouchard Transportation Company

In November 2004, the Bouchard Transportation Company of Hicksville, N.Y., was sentenced to pay a $10 million fine for violating the Clean Water Act and the Migratory Bird Treaty Act for spilling approximately 98,000 gallons of industrial fuel oil into Buzzards Bay off Cape Cod, Mass. The fine is in addition to more than $38 million in direct costs Bouchard spent to clean-up the spill. The company admitted that improper operation of the tugboat, Evening Tide, led to the spill of Number 6 fuel oil, a heavy oil used by ocean liners and tankers as fuel, which killed 450 protected birds, forced the closure of thousands of acres of the bay's shellfish beds for several months for cleanup, and polluted nearly 90 miles of Massachusetts shoreline. The North American Wetlands Conservation Fund will receive $7 million of the fine, the Oil Spill Liability Trust Fund will receive $2 million. The remaining $1 million will be suspended if the company successfully completes probation and establishes an environmental compliance program. The former first mate of the Evening Tide , was sentenced to five months incarceration followed by one year of supervised release after pleading guilty to violating the Clean Water Act and the Migratory Bird Treaty Act.

Evergreen Marine

In April 2005, Evergreen International, S.A., one of many Evergreen-related companies involved in the container ship business, paid $25 million in fines and environmental projects, the largest-ever amount for a case involving deliberate vessel pollution, after pleading guilty to 24 felony counts and one misdemeanor count in federal courts in Los Angeles, Calif., Newark, N.J. Portland, Ore., Seattle, Wash., and Charleston, S.C. Evergreen ships routinely used bypass equipment to discharge oily waste and sludge oil while circumventing required pollution prevention equipment and concealing the discharges in fictitious logs it knew were inspected regularly by the Coast Guard. The guilty pleas involved the company's concealment of the deliberate, illegal discharge of waste oil, including making false statements, obstructing Coast Guard inspections, failing to maintain an accurate Oil Record Book, and negligently violating the Clean Water Act relating to a discharge into the Columbia River. A $15 million criminal fine will be divided equally among the five judicial districts involved. In addition, another $10 million will be directed to environmental community service projects. Four related Evergreen companies also will be bound by a detailed environmental compliance plan to prevent future violations as a condition of probation.

Sabine Transportation

In April 2005, Rick Dean Stickle, chairman and owner of Sabine Transportation Company, was sentenced to 33 months in prison after being convicted of ordering the illegal dumping of 440 tons of oil contaminated grain into the ocean from the SS Juneau, a Sabine tanker, and of obstructing an investigation conducted by the U.S. Coast Guard and Department of Agriculture. He also received a $60,000 criminal fine. Sabine Transportation, headquartered in Cedar Rapids, Iowa, previously pled guilty to violations of the Act to Prevent Pollution from Ships and paid a $2 million criminal fine. A diesel oil leak in one of the Juneau's main cargo tanks was discovered while a shipment of grain was being off loaded in Bangladesh in December 1998. The wheat became saturated with the oil and was rejected by Bengali authorities. While the ship was in Singapore, company officials and vessel officers discussed various ways of off-loading the cargo legally, but this option was ultimately rejected by the defendant as too expensive. Instead, Stickle and other company officials intentionally misled Coast Guard officers by failing to disclose the true nature of the contaminated residue and ultimately ordered the contaminated wheat to be discharged into the ocean during the return voyage to the United States . The criminal investigation began after crew members alerted the Coast Guard to the dumping.

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HAZARDOUS WASTE

Union Foundry

In September 2005, the Union Foundry Company, of Birmingham, Ala., was sentenced to pay a $3.5 million criminal fine, perform a $750,000 environmental community service project and serve five years probation following a guilty plea to charges of violating both the Resource Conservation and Recovery Act and an Occupational Safety and Health Administration regulation. Union Foundry allowed a maintenance employee to work in the area of a conveyor belt while it was operating without a safety guard. The employee was caught in the unguarded pulley of the conveyor belt and was crushed to death. The company also treated hazardous waste generated by the foundry without a permit from EPA or the State of Alabama. The hazardous waste was dust from air emissions of the iron furnace, which contained lead and cadmium.

Michigan Industrial Finishes

In August 2005, Michigan Industrial Finishes Corporation and its president, Norman Solomon, each paid $1 million in restitution following Solomon's guilty plea to violating the Resource Conservation and Recovery Act by illegally storing more than 2,000 55-gallon drums and other containers of highly flammable paint related solvents. He also received 60 months probation. In his plea, Solomon admitted to storing the drums illegally despite the fact that he had entered into a consent decree with the Michigan Department of Environmental Quality to resolve the storage issues. The ignitable spent solvents being stored illegally included xylene, toluene and methyl ethyl ketone. EPA estimates that Superfund cleanup costs at the site will be approximately $4 million.

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MULTI-MEDIA

Motiva Enterprises, LLC.

In March 2005, Motiva Enterprises LLC, an oil refining business owned by Shell Oil Company and Saudi Refining Inc., pled guilty to negligently endangering workers at its former refinery in Delaware City, Del., discharging pollutants into the Delaware River, and negligently releasing sulfuric acid into the air. Motiva paid a $10 million fine and must serve a three-year probation term. On July 17, 2001, workers were sent to the refinery's acid tank farm to repair a catwalk connecting the tanks. Flammable vapors ignited, producing an explosion that knocked a 415,000 gallon capacity tank containing spent sulfuric acid off its foundation, killing one worker and injuring numerous others. Additionally, approximately 99,000 gallons of spent sulfuric acid drained into the Delaware River for days after the explosion killing thousands of fish and crabs. Following the explosion, EPA criminal investigators gathered evidence that indicated an extensive history of problems with the tank, including corrosion and leaks. Shell Oil and Motiva collectively account for about 10 percent of total U.S. refining capacity and a 13 percent share of U.S. gasoline sales.

USL City Environmental Inc.

In December 2004 and September 2005, Gazi George, former vice president of City Environmental Inc., a waste treatment facility in Detroit, Mich., once owned by Texas-based U.S. Liquids Inc., was sentenced to 27 months imprisonment, three years supervised release, and a $60,000 fine. A co-defendant, Donald Roeser, the former plant manager, previously was sentenced to serve 12 months in prison and pay a $60,000 fine. Both were prosecuted for Resource Conservation and Recovery Act and Clean Water Act violations, including conspiracy, after discharging untreated and insufficiently treated waste into the Detroit sanitary sewer system and transporting hazardous waste to a landfill not licensed to receive hazardous waste. Instead, liquid hazardous waste was unlawfully discharged directly into a sewer through, among other methods, a covert bypass pipe. Solid hazardous waste was not treated and was sent instead to an unauthorized, non-hazardous waste landfill. The defendants were also charged with false sampling, false reporting and tampering with a monitoring device. U.S. Liquids had paid a $5.5 million fine in 2002 and must serve five years probation for its part in this case.

Kerrville Painting Company

In November 2004, corporate defendant Kerrville Painting Company Inc., of Kerrville, Texas, Nicholas Muskie, the owner of Kerrville Painting, and Kevin Foster were sentenced for their role in violations of federal hazardous waste disposal and clean water laws. The criminal violations arose from sandblasting and painting work the company did under highway bridge contracts in northeast Arkansas in 1999 and 2000. The defendants were involved in a scheme involving the illegal discharge of about 160,000 pounds of lead-contaminated materials into the Black River from two different bridge locations. The company was sentenced to five years probation and to pay over $324,613 in clean-up costs . Muskie received three years in prison and Foster received one year in prison and paid $5,768 in restitution for clean-up costs. Bridge sandblasting and painting typically generates wastes contaminated with lead that must be disposed of properly to avoid exposure of the public, fish and wildlife to lead and lead compounds. Exposure to sufficient quantities of lead can cause neurological and developmental disorders in humans.

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