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Environmental  Crimes
Case  Bulletin
 U.S. Environmental Protection Agency


 Office of Criminal Enforcement, Forensics and Training




 This bulletin summarizes publicized investigative activity and

 adjudicated cases conducted by OCEFT Criminal Investigation

 Division special agents, forensic specialists, and legal support staff.


 November 2014



 In This Edition:


 • Paul Ricco — Region 1


 • Clyde Eldridge — Region 1


 • Theodore Lehmann — Region 2


 • Bonita Witt-Hird — Region 3


 • XPLOR Energy SPV-1, Inc. — Region 6


 • Glamis Dunes Storage, Inc., Michael Mamelli — Region 9


 • James Hampton, Raul Morales — Region 10


 • XS Platinum, Inc., Bruce Butcher, Mark Balfour, James Slade, Robert

  Pate, James Staeheli — Region 10
                   &EPA
            United States
            Environmental Protection
            Agency
EPA Pub. 310-N-14-011

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                                Defendant Summary
Region
Defendants
Case Type/Status
Region 1
Paul Ricco
FIFRA/Falsified reports to EPA
Region 1
Clyde Eldridge
FIFRA/Making false statement
Region 2
Theodore Lehmann
CAA/Negligent endangerment
Region 3
Bonita Witt-Hird
CWA/Filing fraudulent water quality reports
                                           Page 2
                                                     EPA Bulletin—November 2014

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                                 Defendant Summary
Region
Defendants
Case Type/Status
Region 6
XPLOR Energy SPV-1. Inc.
CWA/lllegal discharges of produced water containing
oil and other substances into U.S. waters
Region 9
Glamis Dunes Storage, Inc.,
Michael Mamelli, Sr.
SDWA/lllegal disposal of untreated human waste and
sewage
Region 10
James Hampton, Raul Morales,
and Bryan Beigh
CAA/Falsified data to cover up the fact that they in-
tentionally failed to operate air pollution controls
Region 10
XS Platinum, Inc., Bruce Butcher,
Mark Balfour, James Slade, Rob-
ert Pate, James Staeheli
CWA/Knowingly violating terms of company's CWA
permit, conspiracy
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                                                      EPA Bulletin—November 2014

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                       Sentencings
Westward Seafoods, Inc.
Supervisors At Seafood Processing Facility in Alaska Sentenced to Jail for CAA Crime ~ On November 12,
2014, JAMES HAMPTON, the former assistant chief engineer for Westward Seafoods,  Inc. (Westward), and
RAUL MORALES, the former powerhouse supervisor, were each sentenced in the federal district court for
the District Court in Anchorage to serve time  in jail after previously pleading guilty to falsifying data to cover
                                                     up  the fact that they  intentionally failed to
                                                     operate air pollution controls  required under the
                                                     Clean  Air  Act  at  the  Westward  seafood
                                                     processing facility in Dutch Harbor.   Hampton
                                                     was sentenced to just over two months  in prison
                                                     (70 days).  Morales was sentenced to  1.5 months
                                                     in prison (45 days).   Both defendants  were
                                                     ordered to pay $1,000 fine  and will serve a one-
                                                    |year term  of  supervision  upon release  from
                                                     prison.  The judge  noted that both  defendants
                                                     knew what they were doing was against the law,
                                                     but they did it anyway, and that the sentences
                                                     imposed should deter others from  committing
                                                     similar crimes.
                                                           On November 25, 2014, BRYAN  BEIGH, a
powerhouse operator, was sentenced after previously pleading guilty to charges that he  tampered  with  the
meters used to monitor the operation  of the CASS pollution  control equipment.  Beigh was sentenced to
three years probation and a $750 fine.
      Westward has operated a sizeable seafood processing facility in Dutch Harbor since 1999, processing
approximately 250 million pounds of seafood per year.  Westward is a wholly owned subsidiary  of  Maruha-
Nichiro Holdings, Inc., a Japanese-based company,  and maintains its headquarters in  Seattle, Washington.
The Dutch Harbor facility generates its own electricity with three diesel-fueled generators contained  in its
powerhouse building.  Air emissions from  these generators  are  vented through a single combined
smokestack, and these emissions are regulated by a Title V Permit under the Clean  Air Act. The  permit was
issued by the Alaska Department of Environmental Conservation (ADEC), under delegated authority from  the
U.S. Environmental Protection Agency.
      Under the terms of its permit, Westward was required to install and use  pollution control  equipment
to decrease the amount of nitrogen dioxide (NOx) being emitted from the powerhouse smokestack.  To  meet
this requirement, Westward installed a Combustion Air Saturation System (CASS) for  each  generator unit,
which uses water to saturate the air and reduce emissions from each generator.  The permit also  required
Westward to operate each generator with a  "dedicated fuel and water flow meter" and to record the fuel
and water consumption "at a consistent time once per day."
      Beginning in 2009, and continuing until August 2011, Westward failed to operate the CASS pollution
control equipment.   Raul Morales discussed with James  Hampton that he  and the powerhouse staff had
stopped operating the CASS. Thereafter, Hampton not only allowed this permit violation to continue, but he
used his position to actively participate in a cover-up designed to make it appear that the CASS  was in fact
being used as  required by  law.   Morales, along with  Bryan  Beigh, a  powerhouse operator, falsified data
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                                        Sentencings
collection forms called "Engine Round" forms on a daily basis when it came to recording information about
the operation of the CASS.  The false information not only included indicating that the CASS was operating
"OK" when it was off, but also included generating false water meter flow readings. Because the CASS was
not being operated, no water was flowing through the system and therefore the actual water flow meter
readings would  have revealed no water  use.  Morales maintained a running calculation of what the flow
meters should have indicated  if the CASS  had been properly operated, and Beigh went so far as to develop a
system of removing the  water flow meters and
manually spinning them using  a drill and a magnet
to make it appear  that water had  been flowing
through the system.
      The false information from  the Engine
Rounds was then included in the End of Day (EOD)
reports  and the Environmental Report Sheets
(ERS)  maintained  by Westward.    This false
information was in  turn reported  to ADEC and
EPA.   On   several  occasions,    Westward's
environmental  compliance manager noticed  a
discrepancy and had questions about the water
usage data recorded for the CASS and contacted
                                                Wartsila diesel engine
                                               Diesel-fueled generators contained in Westward Sea-
                                                         food's powerhouse building.
Hampton for answers.   In  response, Hampton
either changed  the numbers or requested  that
Morales provide new numbers, knowing that  both
the previous numbers and the new numbers he provided were false. Hampton then submitted the new, but
still false, water usage numbers to the environmental compliance manager.
      Additionally,  in April  2011,  Hampton escorted an  EPA inspector  through  the  powerhouse at
Westward during an inspection.  Westward  had advance notice of the inspection and the powerhouse
supervisor and operators began operating the CASS in preparation for the inspection to make it appear that
they were in fact operating the CASS routinely as required by the permit.  During the inspection, Hampton
guided the EPA inspector around the powerhouse and to view the daily logs which indicated that the CASS
had been regularly operating, when Hampton knew that it was not being operated and the logs were false.
      In 2010, Westward entered into a civil consent decree with the United States and agreed to pay a  civil
penalty following prior allegations that the company had, among other things,  violated  emissions limits
under the Clean Air Act.  The consent decree, filed in  United States  v. Westward, 3:10-cv-00073-JWS,
required  Westward  to reduce its NOx emissions by properly operating pollution prevention equipment.
Hampton and Morales were aware of the consent decree.
      While the EPA did  not receive any reports of harm to human beings as a result of the emissions at
Westward during this period of time, NOx can cause airway inflammation in otherwise healthy people  and
can cause or worsen symptoms of asthma, bronchitis, and other respiratory diseases.
      The case was investigated by  EPA's Criminal Investigation Division. It was prosecuted by Karla Perrin,
EPA regional criminal enforcement counsel, in  conjunction with the United States Attorney's  Office.
Back to Defendant Summary
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        Sentencings
Aerial view of the six buildings at the Kensington Towers Apartment complex where
 asbestos was illegally abated. The area includes a school, hospital, and residences
                            nearby.
Former New York State Inspector Sentenced for Negligent Dangerment Under the CAA - On November 6,
2014, THEODORE LEHMANN, of Buffalo, New York,  who was convicted of a misdemeanor charge of
negligent endangerment under the  Clean Air Act,  was sentenced in federal district court for the  Western
District of New York to one year
probation.
      Lehmann  was  employed
by  JMD   Environmental,  Inc.
(JMD)   as  an   air  sampling
technician   and    a   project
monitor, and was certified by the
New York State  Department of
Health  to  conduct  asbestos
project monitor and air sampling
duties. From June  9, 2009 to
January  11, 2010, co-defendants
Johnson  Contracting  of  WNY,  |
Inc.,  Ernest  Johnson,  and  Rai
Johnson,   conducted   asbestos
abatement   activities   at   six
buildings at the  Kensington Towers Apartment Complex  in Buffalo.  During  the  abatement process,  Rai
Johnson created daily project logs to document the progress at Kensington Towers. The logs are documents
required to be maintained under the Clean Air Act.
      At the conclusion  of the abatement for building B-2 by Johnson Contracting, Rai Johnson wrote in his
daily project log that all material containing asbestos had been removed from the boiler room, when in truth,
all asbestos had not been removed.  Thereafter, on  August 25, 2009, Lehmann conducted a visual inspection
of the boiler room at building B-2 and issued a  satisfactory visual inspection, when in truth, he was aware
that all asbestos  had not been  removed. In doing so, he acted as an  accessory after the fact to the false
statement made by the Johnsons.
      This is the final defendant to be sentenced as part of the Kensington Towers asbestos abatement
project.  In addition  to Ernest and Rai Johnson, other  defendants who  have  been convicted include JMD
project monitors Evan Harnden and Brian  Scott;  and  current and former public officials responsible  for
certifying the project's compliance with applicable  laws and regulations,  including Donald Grzebielucha and
William Manuszewski.
      The case  was investigated  by EPA's  Criminal Investigation   Division, the  Federal Bureau of
Investigation, the U.S. Department of Housing and Urban Development - Office  of Inspector General, and the
New York State Department of Environmental Conservation Police, BECI. Additional assistance was provided
by the New York State Department of Labor, Asbestos Control Bureau. It is being prosecuted by Assistant
U. S. Attorney Aaron J. Mango.
Back to Defendant Summary
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                                    Plea Agreements
West Virginia Woman Pleads Guilty to Filing Fraudulent Water Quality Reports - On November 13, 2014,
BONITA WITT-HIRD, of Thorpe, West Virginia, pled guilty in federal district court in Charleston to filing
fraudulent water quality reports. She is scheduled to be sentenced on January 5, 2015.
       Witt-Hird  was  formerly  employed as the office manager for  Richmorr Associates, Inc., an
environmental engineering  firm in Elkview, West Virginia, which  provides water sampling  services to
wastewater treatment plants throughout West Virginia.  Wastewater plants are required by state and federal
law to sample wastewater  discharges.  The results are  submitted to the West  Virginia Department of
Environmental Protection (WVDEP).  WVDEP reviews the  results to ensure compliance with water quality
standards.  In the event of  non-compliance, WVDEP may levy fines or,  in extreme cases, shut down the
wastewater treatment plant.
       From April of  2012  to June of 2013, Witt-Hird  filed  approximately 80  false reports with the
WVDEP. These false reports  made it appear that current water quality sampling had been performed for the
wastewater plants when, in fact, the test results had been copied from previous years.
       Witt-Hird previously plead guilty on September 26, 2013 to obstructing an IRS investigation and is
currently imprisoned on the sentence imposed for that offense.  For the fraudulent water quality report
offense, Witt-Hird faces a maximum penalty of two years imprisonment, and a fine of up to $250,000.
       The case was investigated  by EPA's Criminal  Investigation Division, the WVDEP and the Federal
Bureau of Investigation. It is  being prosecuted by Assistant United States Attorney Erik S. Goes.
 Back to Defendant Summary
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                                     Plea Agreements
Oklahoma Corporation Pleads Guilty to CWA Violations -- On November 19, 2014, XPLOR ENERGY SPV-1,
Inc., an Oklahoma corporation residing in Southlake, Texas, pled guilty in federal district court  for the
Eastern District of Louisiana with knowingly violating the  Clean Water Act. The charges concern XPLOR's oil
and gas production activities in the Breton Sound Area of the Gulf of Mexico. As part of the guilty plea, the
                                        company agreed to pay  a total monetary  penalty of $3.1
                                        million  and serve  a  three-year term of probation.  Of the
                                        monetary penalty $2.5 million will go  to the  United States
                                        Treasury  and  $600,000  to  Louisiana   Department  of
                                        Environmental Quality Trust Fund. Sentencing is set for March
                                        4, 2015.
                                               According to the court documents, from on or about
                                        November 24, 1997 until November 18, 2011, XPLOR operated
                                        the MP 35 offshore facility ("MP 35 Platform") for the purpose
                                        of extracting oil and natural gas.  As part of the oil and gas
                                        production,  separation and processing, XPLOR was tasked with
                                        disposing of the pollutant  known  as "produced  water" or
"brine" which  is produced with the extracted oil and natural gas. The  MP 35 Platform was designed to
dispose of this pollutant  by  forcing the produced  water, under pump generated  pressure, into disposal/
injection wells  located in Gulf of Mexico waters near the MP 35 Platform.
       In or near November 2011, XPLOR transferred ownership
and operation to another corporation. The  platform's new owner
quickly discovered the platform was continuously discharging!
produced water containing oil and other harmful substances into
the waters of  the  United  States. The new owner immediately t
contacted regulatory authorities to report the discharge.
       The   ensuing  investigation  revealed  that  XPLOR  had
knowingly discharged produced water containing oil into waters:
of the United  States without any permit from faulty injection
lines/pipes  leading from the platform to the  disposal wells
used to store the produced water containing oil, and from
        Well site platform and flow lines
                                                                    Offshore storage tanks
produced water disposal wells which had insufficient capacity to hold the produced water. Despite knowing
of this consistent discharge from the  injection lines and the insufficient capacity of their disposal wells,
XPLOR failed to adequately repair these faulty injection lines and disposal wells. XPLOR's intentional failure
to make these repairs resulted in the repeated discharge of produced water containing oil into the waters of
the United  States from in  or near October 2009,  and  continuing through to November 18, 2011. XPLOR's
actions resulted in a total monetary savings or gain to them in the amount of approximately $1,550,000.
       The  case was investigated  by EPA's Criminal Investigation Division and the Criminal  Investigation
Division of the Louisiana Department of Environmental Quality.  It is being prosecuted  by Assistant United
States Attorney Matt Coman.
Back to Defendant Summary
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                                     Plea Agreements
Former Massachusetts Department of Agriculture Pleads Guilty to Falsifying EPA Reports - On November
20, 2014,  PAUL  RICCO, of  Springfield,  Massachusetts,  a  former  inspector  for  the Massachusetts
Department of Agriculture, pleaded guilty in federal district court for the District of Massachusetts to making
false statements on inspection reports he submitted to federal regulators. He was charged in September and
his sentencing is scheduled for February 11, 2015.
      From March 2010 through May 2012, Ricco was in charge of the Producer Establishment Inspection
program at the  Massachusetts Department of Agriculture where he inspected establishments that  produce,
sell and/or distribute pesticides. During that time period, Ricco submitted 15 false reports  of purported
inspections that he never performed. Ricco submitted the false reports to EPA to conceal the fact that he was
not performing environmental inspections which he  was required  to perform.  Those inspections were
necessary to insure that  pesticide manufacturers across the state were producing and packaging pesticides
safely.
      The charging statute  provides a statutory maximum sentence of no greater than five years in prison,
three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically
less than the maximum  penalties. Sentences are imposed by a federal district judge based upon the U.S.
Sentencing Guidelines and other statutory factors.
      The case was investigated by EPA's Criminal Investigation Division. It is being prosecuted by Assistant
U.S. Attorney Carlos A. Lopez of the U.S. attorney's office's major crimes Unit.
Back to Defendant Summary
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                     Plea Agreements
Glamis Dunes Storage site
California Business and Its Owner Plead Guilty to Illegal Disposal of Untreated Human Waste and Sewage --
On  November 19, 2014, GLAMIS DUNES STORAGE, INC. and its owner, MICHAEL MAMELLI, SR.,  pleaded
guilty in federal district court for the Southern District of California to the illegal underground  disposal of
                                                    potentially millions of gallons of untreated human
                                                    waste  and sewage at the Glamis Dunes Storage
                                                    site for more than four years, in violation of the
                                                   [Safe Drinking Water Act. The Glamis Dunes  site
                                                    advertises storage services near the Imperial Sand
                                                    Dunes Recreation Area. Sentencing is scheduled
                                                    for February 17, 2015.  The maximum penalty for
                                                    Mamelli  is  three  years in prison  and  up to
                                                    $250,000 fine or twice the illegal  gain  or  loss,
                                                    whichever is greater.  The maximum  penalty for
                                                   | the corporation is a fine of up to $500,000.
                                                          The defendants admitted that in August of
                                                    2007,   Glamis  Dunes  Storage   obtained  a
conditional use permit from Imperial County to install and operate a 20,000 gallon holding tank for RV waste
(including human waste and grey water) at the facility. When acquiring the permit, Glamis Dunes Storage
represented that the wastewater would be pumped out by a licensed septage hauler and disposed of at the
Holtville wastewater  treatment plant. According  to  Glamis  Dunes Storage, the holding tank could be
expected to dispose of approximately 1,250,000 gallons of RV sewage and grey water per year.  The permit
specifically prohibited any underground leach system attached to the holding tank.
      As the defendants  admitted,  however,  between February 16,  2010,  and March 12,  2010,  the
defendants arranged for a contractor to build a leach field in the rear of the property, install a pump in the
RV holding tank, and connect a pipe directly from the RV holding tank out to the leach field. The  defendants
also arranged for the power connection for the pump to be concealed under gravel near the RV holding tank.
Thereafter, they admitted that they repeatedly disposed of the  human waste and sewage from the RV
holding tank by activating the pump and discharging the sewage through the underground leach field.
      The defendants acknowledged that between August and October of 2012, they had a contractor add
a new pump and two 2,500 gallon  tanks in  series to the  pipe connecting the RV holding tank to the leach
field. The defendants continued to illegally dispose of the sewage in the RV holding tank by discharging it
through the underground tanks and leach field without a permit or other authorization from the EPA.
The defendants agreed  to forfeiture of the sum of $50,000, as  the proceeds of the offense, and to  make
restitution to the Bureau of Land Management and the Imperial County Department of Environmental Health
and  to  fund  the restoration of the  site  to the satisfaction of the  Imperial County Department of
Environmental Health.
      The case was investigated by EPA's Criminal Investigation Division.
Back to Defendant Summary
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                                    Plea Agreements
Maine Man Pleads Guilty to Making False Statements -- On November 20, 2014, CLYDE ELDRIDGE, of Calais,
Maine, pled guilty in federal district court for the District of Maine to making a false statement to federal
agents.
      According to court records, Eldridge owned C&E Feeds, a feed and pet store in Calais. In 2010, EPA
and its Canadian  counterpart,  Environment Canada, were  investigating the illegal use of the pesticide
cypermethrin. On September 23, 2010, when asked by two EPA special agents to identify anyone to whom
he had sold  cypermethrin and  whether he had kept records of the sales, Eldridge said he sold different
amounts of cypermethrin to different people and that he did not keep track of the sales. The investigation
revealed, however, that Eldridge sold cypermethrin on 10-11 occasions to one regional production manager
employed by Kelly Cove Salmon Ltd., a subsidiary of Cooke Aquaculture, and that on each occasion Eldridge
made a note of the quantity picked up by the manager. In April of 2013, Cooke Aquaculture pled guilty in
New Brunswick Provincial Court and paid a $490,000 fine for illegally using pesticides that killed hundreds of
lobsters in waters that were about a mile from Maine's border.
      Eldridge faces up to 5 years in prison and a $250,000 fine. He will be sentenced after completion of a
presentence investigation report by the U.S. Probation Office.
      The investigation was conducted by EPA's Criminal Investigation Division and Environment Canada.
Back to Defendant Summary
                                             Page 11                    EPA Bulletin— November 2014

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                               Indictments/Information!
Delaware Corporation and Five Officials Indicted for Illegal Discharges From a Mine in Alaska and for False
Statements to Federal Officials -- On November 19,  2014, XS PLATINUM, INC., and five of its officers and
employees were indicted in federal district court for the District of Alaska for five felony violations, including
conspiracy to violate the Clean Water Act and for submitting material false statements.
       The  indictment charges XS Platinum, Inc.  (XSP), a Delaware corporation, and five of its officers and
employees, BRUCE BUTCHER and MARK  BALFOUR (both  Australian citizens), JAMES SLADE (a Canadian
citizen)  and ROBERT PATE and JAMES STAEHELI  (both U.S. citizens residing in Washington  state) with
conspiracy to violate the Clean Water Act  during the  defendants' operation of the Platinum Creek Mine on
the Salmon River in Western Alaska.  In addition, the indictment charges XSP, Butcher, Balfour,  Slade, and
Pate with knowingly violating the terms of XSP's CWA permit in 2010; and XSP, Butcher, Balfour, Slade, and
Staeheli with knowingly violating the terms of XSP's CWA permit in 2011.  The indictment also charges XSP,
Butcher, Balfour, Slade and Pate with submitting a false statement in violation  of the CWA.  Finally, the
indictment charges XSP and Balfour with submitting  a separate false statement.
       According to the indictment, XSP held 159 placer mining claims and 36 hard-rock claims totaling more
than 4,000 acres at the Platinum Creek Mine, which was situated along the Salmon  River and its tributaries.
The mine contains placer deposits of platinum metal,  along with smaller amounts  of gold and palladium.  All
but 21 of the claims were on land managed by the BLM, with the remaining (undeveloped) claims lying within
the Togiak National Wildlife Refuge. The Salmon River is an anadromous fish stream that is important for the
spawning of all five species of Pacific salmon (chinook, chum, coho,  pink, and sockeye), and the rearing of
coho and sockeye salmon.  After flowing through BLM land, the Salmon  River crosses the Togiak National
Wildlife Refuge before entering the Pacific Ocean at  Kuskokwim Bay.  An indictment contains allegations that
a defendant has committed a crime.  Every defendant is presumed  innocent unless and until proven guilty
beyond a reasonable doubt.
       The  CWA prohibits  discharges of industrial wastewaters from mining operations in violation of CWA
permits which govern those discharges.  According  to the indictment,  beginning  in 2010  and  continuing
through 2011, XSP and the individual defendants knowingly discharged industrial wastewaters from XSP's
mechanical placer mining operation at the Platinum  Creek Mine into the adjacent Salmon River in violation of
the terms of XSP's CWA General Permit.   According to the indictment,  XSP told federal  regulators in its
mining and CWA permit applications that the operation of the mine would recycle all of its  wastewater and
result in "zero discharge" of mine wastewater to the Salmon River.  The indictment alleges that XSP and the
individual defendants  conspired to violate the CWA by concealing the 2010 and  2011 mine wastewater
discharge violations from federal officials, and submitting material false statements to federal agencies.  The
indictment further alleges that the industrial wastewaters discharged from XSP's  operation of the Platinum
Creek Mine included large amounts of sediment, turbidity, and toxic metals.  It is further alleged that these
discharges exceeded the CWA General Permit  limits for those pollutants and that the defendants failed to
report the violations as they were required.  According to the indictment, XSP  and  its corporate officers
submitted an annual report in 2011 to federal  and  state agencies which indicated that the mine had "zero
discharge" during  the 2010 mining season, when XSP's own monitoring data showed that it had numerous
discharges to the Salmon River.
       The  investigation is  being conducted by EPA's Criminal Investigation Division and the U.S. Department
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                            Indictments/Information!
of Interior Bureau of Land  Management Office of Law Enforcement and Security.  The case is being
prosecuted by First Assistant U.S. Attorney Kevin Feldis of the U.S. Attorney's Office for the District of
Alaska, Trial Attorney Todd S. Mikolop of the U.S. Justice Department's Environmental Crimes Section, and
EPA's Regional Criminal Enforcement Counsel Dean Ingemanson.
Back to Defendant Summary
 EPA Pub. 310-N-14-011
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EPA Bulletin—November 2014

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