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Black Market CFCs/HCFCs and You:

A Criminal Combination

BEWARE!

If you knowingly buy or possess illegal chlorofluorocarbons (CFCs) or hydrochlorofluorocarbons (HCFCs) smuggled into the United States, you are committing a punishable, criminal offense. If you are a wholesaler, distributor, or retailer of CFCs or HCFCs, you are responsible for ensuring the CFCs/HCFCs you buy are legal. You should be able to describe the diligent efforts you take to make sure the CFCs/HCFCs you possess were not smuggled into the United States.

This flyer describes potential consequences you might face if you purchase or possess illegal CFCs/HCFCs, as well as some of the steps you can take to be sure you are purchasing legal CFCs/HCFCs.

What Are the Penalties for Purchasing or Possessing Illegal CFCs/HCFCs?

What are CFCs/HCFCs and How Do They Harm People and the Environment?

Scientists have found that CFCs and HCFCs destroy the Earth's ozone layer. The ozone layer acts as a protective blanket, shielding us from harmful ultraviolet (UV) radiation. As the ozone layer is depleted by CFCs/HCFCs and other ozone-depleting substances, higher levels of UV radiation reach the Earth. This in turn can lead to a greater incidence of skin cancer, cataracts, and impaired immune systems, and also can damage crops and reduce fishery yields.

The most immediate consequence of possessing illegal CFCs/HCFCs is having them confiscated. The U.S. Customs Service, under its laws and regulations, may confiscate any goods that enter the United States illegally. The U.S. Customs Service can confiscate illegally imported CFCs/HCFCs all the way down the distribution chain. Purchasing your CFCs/HCFCs from a reputable wholesaler or distributor does not relieve you of responsibility. If the CFCs/HCFCs you possess were illegally smuggled into the United States, you could lose the valuable product, even though you paid for it.

There are many other potential consequences of purchasing or possessing illegal CFCs/HCFCs. If the U.S. Customs Service confiscates your CFCs/HCFCs, you might become the subject of an investigation by the Customs Service and the U.S. Environmental Protection Agency (EPA). Investigations of your company might involve interviewing your employees and reviewing your records. The Internal Revenue Service (IRS) also might decide to audit you or your company regarding payment of the excise taxes on CFCs.

If you knowingly purchase or possess CFCs/HCFCs illegally smuggled into the United States, you could face severe penalties.

How Can I Be Sure the CFCs/HCFCs I Purchase Are Legal?

To make sure you purchase or possess legal CFCs/HCFCs, you should know where the specific brand was produced and the name of the manufacturer. Making sure you have legal material that meets the industry purity standard is good business practice.

Before you buy CFCs/HCFCs, you should ask the seller for documents of prior ownership of the product (and a laboratory analysis of the quality). Investigating the source of the material and the chain of ownership is your responsibility. If the material was imported, you should know when, where, and from whom it was imported. You also should ensure that the packaging for the material is appropriate. Illegally imported refrigerant is sometimes packaged in wrong size containers or fixed with improper values. Remember, if you purchase or possess CFCs/HCFCs that entered the United States illegally, the U.S. Customs Service can confiscate the product.

What Has Happened to People Convicted of Buying or Smuggling CFCs/HCFCs?

The following are real examples of what can happen if you buy or possess illegal CFCs and HCFCs.

Case 1: The president of a refrigerant distribution company in Florida pled guilty to charges of illegally importing over 8 million pounds of CFCs into the United States. For his role, the president was sentenced to 37 months in prison and 3 years supervised release, fined $375,000, and ordered to forfeit over $13 million in assets. The company was sentenced to pay a fine of over $37 million and serve 5 years of probation. The company is also potentially liable for over $31 million in back taxes to the IRS. The company's bookkeeper/salesperson received fines and a probationary sentence, and the company's chief financial officer received a fine and a 30-day prison sentence.

Case 2: Three men were arrested during two separate sting operations by undercover agents when they attempted to purchase CFCs being sold as illegal imports. One man was convicted on charges of making a false statement to the U.S. Customs Service and sentenced to 6 months of home detention, 3 years of probation, and a $10,000 fine. He also forfeited $112,000 and personal possessions used in the crime, which were seized at the time of the arrest. The other two men were convicted on charges of conspiracy to violate the U.S. Clean Air Act. At the time of their arrest, $125,200 and a vehicle were seized and forfeited to the government. One of the two men was sentenced to 3 years of probation, 240 hours of community service, and a $1,500 fine. The other man was sentenced to 3 years of probation and 240 hours of community service.

Case 3: The president of a Florida import company, after pleading guilty in 2009 to three counts of knowingly importing illegal HCFC-22 in violation of the provisions of the Clean Air Act, was sentenced to 30 months' imprisonment, to be followed by three years of supervised release. The corporation was sentenced to five years of probation. Additionally, the two defendants were sentenced, jointly and severally, to pay a criminal fine of $40,000, and were further ordered to forfeit $1,356,160 to the United States. In addition, a second defendant pled guilty to charges of making false statements and declarations on Customs entry forms to disguise the illegal merchandise being imported.


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