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Five Plead Guilty to CFC Importation Scheme

FRIDAY, FEBRUARY 20, 1998

On Feb. 17, R. Colin Dayton, and his two companies Refrigerant Management Services Inc. (RMS) of Bryn Mawr, Pa., and R&C Sales of Boca Raton, Fla., pleaded guilty in U.S. District Court for the Eastern District of Pennsylvania in Pittsburgh to conspiracy to violate the Clean Air Act (CAA) and one count of unlawful monetary transactions. RMS also agreed to forfeit $688,000. In addition, Christopher Farnham of Deerfield Beach, Fla. also pleaded guilty to the CAA conspiracy and unlawful monetary transaction charges. Richard Pelati of Belle Meade, N.J., pleaded guilty to the CAA conspiracy charges.

The defendants set up a scheme to purchase 42,400 cylinders of illegally imported CFC-12, an ozone-depleting refrigerant used in air conditioners, which is banned under the Montreal Protocol. The defendants failed to pay approximately $5,585,400 in excise taxes, and illegally resold the CFC-12 in the U.S. market. Depletion of the ozone layer increases human exposure to ultraviolet radiation which can lead to an increase in the incidence of skin cancer and cataracts.

When sentenced Dayton and Farnham face a maximum term of up to 15 years imprisonment, maximum fines of up to $500,000 or both. Pelati faces a maximum sentence of up to five years in prison, a fine of up to$250,000 or both. Dayton, Farnham and Pelati face payment of any federal excise taxes which the Internal Revenue Service may assess. RMS and R&C face a maximum fine of up to $5,920,000, up to five years probation or both. The case was investigated by EPA's Criminal Investigation Division, the U.S. Customs Service and the Internal Revenue Service.


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