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Enforcement Action Summary FY 2007 - March 2007
Week of March 5, 2007
EPA receives adverse ruling in Bankruptcy Matter
On February 21, 2007, the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, in an oral ruling from the Bench, ruled that the United States’ claim in the Anchor Glass Container Corporation bankruptcy case will be disallowed. The Judge ruled in response to an objection filed by the debtor’s trustee in which the trustee requested that the court disallow EPA’s claim because it is a claim for penalties. The United States had responded that the objection was without merit in that it misstated the pertinent provisions of the debtor’s reorganization plan and applicable case law. Current case law holds that bankruptcy courts may not categorically disallow penalty claims. EPA asserted a general unsecured claim based on a $96,901 penalty agreed to by EPA and Anchor Glass Container Corp. in an Administrative Consent Agreement and Final Order (CAFO) which was submitted as part of the proof of claim submitted by the U.S. in the bankruptcy case. In the CAFO, the parties specifically agreed that the penalty would be deemed an allowed claim in the bankruptcy case. The Department of Justice plans to appeal this adverse ruling by filing a Notice of Appeal with the United States District Court.
Contact: Deborah Carlson, Office of Regional Counsel, (312) 353-6121
Region 5 files Consent Agreement and Final Order with Laurence Reardon and Reardon Properties Limited Partnership
On February 28, 2007, Region 5 and Laurence Reardon and Reardon Properties Limited Partnership, entered into a Consent Agreement and Final Order (CAFO) resolving U.S. EPA’s claims alleging that Laurence Reardon and Reardon Properties Limited Partnership violated the Residential Lead-Based Paint Hazard Reduction Act of 1992 (the “Lead-Based Paint Hazard Reduction Act”), 42 U.S.C. § 4852d et seq., and Sections 409 and 16 of TSCA, 15 U.S.C. §§ 2689, 2615, and 40 C.F.R. §§ 745.113(b)(1), (b)(2), (b)(3), (b)(4), and (b)(6) by failing to make certain required disclosures in the leasing of sixty-seven (67) apartments. U.S. EPA filed its complaint in this matter on August 8, 2006, and sought a penalty of $146, 630. At Respondents’ request, Region 5 agreed to participate in Alternative Dispute Resolution (ADR) discussions under Judge Gunning’s supervision. The parties have agreed to settle this case for a total of $61,176, plus interest, in two installment payments. The penalty is being mitigated for litigation risk identified in the ADR process and for Respondents’ good faith attitude.
Contacts: Jeffrey A. Cahn, 312-886-6670 and Scott Cooper, 312-866-1332.
CAFO signed resolving violations of RCRA alleged against Star Acquisition, Inc.
On March 7, 2007, the Director of the Waste, Pesticides & Toxics Division signed a Consent Agreement and Final Order (CAFO) resolving violations identified in a pre-filing notice letter issued by Region 5, U.S. EPA, against Star Acquisition, Inc. (Star or Respondent), under Section 3008(a) of the Resource Conservation and Recovery Act, as amended (RCRA), 42 U.S.C. § 6928(a), and the United States Environmental Protection Agency's Consolidated Rules of Practice Governing the Administrative Assessment of Civil Penalties, Issuance of Compliance or Corrective Action Orders, and the Revocation or Suspension of Permits, 40 C.F.R. Part 22. Under the terms of this CAFO, Star shall pay a settlement amount of $1,289 within 30 days of the effective date of the CAFO.
Respondent has signed the CAFO, certifying that it is currently in compliance with all applicable requirements of RCRA. Respondent has also remitted a check for payment of the penalty.
Contact: James Cha, ORC, (312) 886-0813
U.S. District Court in Ohio denies extension of time to serve complaint to enjoin RCRA 3013 order in Schott Metal Products, Inc. v. EPA et al.
On September 7, 2006, Schott Metal Products, Inc. and Samuel Schott filed a civil complaint in the U.S. District Court for the Northern District of Ohio seeking an order enjoining the EPA from enforcing a RCRA Section 3013 unilateral administrative order against them. The complaint named EPA and Region 5’s Waste, Pesticides and Toxics Division Director as defendants. After 158 days passed without service, the United States moved to dismiss. The plaintiffs then filed a motion to extend the time for service, and filed a supplemental motion to extend on February 26, 2007. On March 6, 2007, the U.S. District Court for the Northern District of Ohio denied the motions for extension on the grounds that Schott and Schott Metals had not shown good cause for their delay.
Contact: Tom M. Williams, (312) 886-0814
Week of March 12, 2007
No Significant Case Developments to Report.
Week of March 19, 2007
Court Denies United States Motion for Summary Judgment Against Apex Oil Company.
On March 15, 2007, the United States District Court for the Southern District of Illinois denied the United States motion for summary judgment on count one of a two count complaint against the Apex Oil Company. In count one of the complaint, the United States alleges that Apex Oil released gasoline which has contributed to a large plume of petroleum-based substances located under the Village of Hartford, Illinois. Among other things, the United States alleges that vapors from the plume present an imminent and substantial endangerment to human health and the environment. The court held that “[g]iven the nature of this case and the specialized knowledge that the facts entail, the Court is not in a position to make factual findings at this stage.” As a result, this case will likely proceed to trial this year.
Contact: Brian Barwick, primary contact (312) 886-6620.
Environmental contractor receives 5 year prison term.
Timothy A. Boisture, 47, a former partner in an environmental clean-up firm, was sentenced March 6, 2007 to serve five years of imprisonment on each of the two counts of mail fraud on which he was convicted by a jury. The sentences will run concurrently. Boisture’s sentence was the longest sentence to date for any crime investigated by the Indiana Inter-Agency Environmental Crimes Task Force.
Boisture’s firm was hired in 1999 by the Indiana Department of Environmental Management (IDEM) to properly close 51 abandoned and leaking oil and injection wells in Vanderburgh County, IN. Leakage from the wells and associated equipment had contaminated a pond and a tributary of the Ohio River. Boisture was convicted of fraudulently charging the State of Indiana $44,824.80 for nonexistent equipment and services and for obtaining more than $150,000 in kickbacks from subcontractors Boisture hired. Boisture was also ordered to serve three years of supervised release following his prison term and to pay $492,571 in restitution, of which more than $330,000 will be made payable to the Indiana Department of Environmental Management and the Indiana Department of Natural Resources.
In related cases, former Indiana Department of Natural Resources Oil and Gas Division inspector Donald G. Veatch, age 58, of Francisco, IN, Carl F. Hanisch, age 72, of Mt. Carmel, IL, and Bi-State Pipe Co., Inc. were also sentenced following their earlier guilty pleas to making false statements. Veatch additionally pleaded guilty to bank fraud. Veatch was the state inspector assigned to the Vanderburgh County well closing project, and Hanisch and Bi-State Pipe Co., Inc. were sub-contractors. All three admitted knowingly making false statements about the equipment used to plug the wells. In addition, Veatch admitted that a company he owned received over $110,000 from Boisture’s firm purportedly for wastewater disposal. Veatch then paid Boisture kickbacks of over $100,000 out of the funds his company received.
Veatch received one day in jail and three years of supervised release, of which 12 months must be served on home detention. Veatch was also ordered to pay restitution of more than $385,000. Hanisch was placed on probation for 12 months and also ordered to pay restitution. Bi-State Pipe Co., Inc. (Bi-State Pipe) was placed on probation for one year. IDEM was reimbursed for the well plugging project from federal Oil Spill Liability Trust Fund, established under the Clean Water Act.
The case was prosecuted by Assistant U.S. Attorney Steven DeBrota and Special Assistant U.S. Attorney David Taliaferro. The case was investigated by EPA CID Special Agent Jeff Denny, in a joint investigation with the Indiana Department of Natural Resources, Law Enforcement Division, the Internal Revenue Service CID and the Federal Bureau of Investigation.
Contact: David M. Taliaferro (312) 886-0815
Cognis Corporation Sentenced For Making Illegal Discharges To Mill Creek Causing The Death Of Migratory Birds; United States v. Cognis Corporation
On March 14, 2007, Cognis Corporation (“Cognis”) was sentenced for illegal discharges into Mill Creek and causing the death of 12 migratory birds. Cognis was sentenced to three years of probation. During the term of probation Cognis will implement an environmental compliance plan. In addition, Cognis was fined $215,000 and ordered to pay $219,994.67 in restitution, for a total of $434,994.67. Cognis, an Ohio corporation, operates a specialty chemicals manufacturing facility located on the Mill Creek in Cincinnati, Ohio. This case was investigated, in a joint investigation, by the Ohio Bureau of Criminal Identification and Investigation, the Ohio Environmental Protection Agency, the Ohio Department of Natural Resources – Division of Wildlife, the Cincinnati Fire Department, the Cincinnati Metropolitan Sewer District, the U.S. Fish and Wildlife Service, and the U.S. EPA CID, all members of the Southwest Ohio Environmental Crimes Task Force.
Contact: Brad Beeson (440) 250-1761
Hazardous Waste Reclamation Company Officials Sentenced For a Hazardous Waste Conspiracy.
On March 9, 2007, in federal court in Urbana, Illinois, former Hydromet Environmental (USA), Inc., plant manager John Pugh and former Hydromet warehouse supervisor Ronald Martin were sentenced for their roles in a 1999-2003 conspiracy to (1) illegally transport, store and dispose of hazardous wastes in violation of RCRA; and (2) make false statements to the Illinois Environmental Protection Agency (IEPA). Pugh received nine months’ imprisonment, nine months’ home confinement and two years’ probation for the crime of conspiracy; and Martin received one year of probation for making a false statement to IEPA. On February 28, 2007, former Hydromet chemist Douglas Bennett was also sentenced, to two years of probation for the crime of conspiracy. Hydromet and five of its former officers and employees were indicted in 2006. The indictment charged Hydromet; William A. Morgan, its former CEO; Pugh; Julianna H. Bauter, its former environmental compliance official; Bennett; and Martin, with the conspiracy. The defendants were also variously charged with making false statements to IEPA and illegally transporting hazardous waste without a manifest. Pugh, Bauter, Bennett and Martin later pled guilty to one count each. U.S. EPA’s Criminal Investigation Division, the Illinois Department of Natural Resources and IEPA jointly investigated this matter.
Contact: Kris Vezner (312) 886-6827
Former President of Michigan Business Charged with Environmental Crimes
On March 2, 2006, James G. Musser, was arraigned and pleaded not guilty to an indictment filed on December 13, 2006 in United States District Court, Eastern District of Michigan, Northern Division, Bay City, Michigan. The indictment charges James G. Musser with 3 criminal counts under the Resource Conservation and Recovery Act (“RCRA”), for storage and disposal of hazardous waste at the Hoskins Manufacturing facility in Mio, Michigan and the disposal of hazardous waste at the Hoskins Manufacturing facility in Hamburg, Michigan. The indictment is an allegation only, and the defendant is presumed innocent of these charges until proven guilty at trial.
Contact: David Mucha (312) 886-9032
Week of March 26, 2007