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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.

 January 2015

 In This Edition:

 • Mark Sawyer, Newell Lynn Smith, Eric Gruenberg, Armida DiSanti, Milto
  DiSanti — Region 4

 • Nancy Marie Stein, American Screw and River Corporation — Region 4

 • Kelly Plating Company — Region 5

 • Race Addington — Region 6

 • Ram Environmental Services, LLC, Raymond Marcel, Jr., Cyril D.
  Robicheaux — Region 6

 • James Leslie Vaughan — Region 8

 • Matson Terminals, Inc. — Region 9
                    &EPA
            United States
            Environmental Protection
            Agency
EPA Pub. 310-N-15-001

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                                  Defendant Summary
Region
Defendants
Case Type/Status
Region 4
Mark Sawyer, Newell Lynn Smith,
Eric Gruenberg, Armida DiSanti,
Milto DiSanti
CAA/lllegal removal and disposal of asbestos-
containing materials
Region 4
Nancy Marie Stein, American
Screw & River Corporation
RCRA/lllegally storing hazardous waste and bank
fraud
Region 5
Kelly Plating Company
CWA/lllegal discharges into city sewer system
Region 6
Race Addington
CWA/False statements to federal agencies in relation
to the veracity of blowout preventer testing on an
offshore oil and gas platform
Region 6
Ram Environmental Services, LLC,
Raymond Marcel, Jr., Cyril D.
Robicheaux
CWA/lllegal disposal of industrial wastewater
Region 8
James Leslie Vaughan
CWA/II legally disposing of domestic sewage
Region 9
Matson Terminals, Inc.
CWA/Unlawfully discharging molasses into Honolulu
Harbor
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                                                       EPA Bulletin—January 2015

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                                     Sentencings
The site on which Vaughn dumped domestic sewage.
Montana Businessman Sentenced for Illegally Disposing of Sewage - On January 20, 2015, JAMES LESLIE
VAUGHAN, of Ronan, Montana, was sentenced in federal district court for the District of Montana to two
years of probation for illegally disposing of domestic sewage.  He had pleaded guilty in October 2014.  In
addition to probation, the defendant was ordered to pay a $5,000 fine.
                                                 The Montana  Department  of  Environmental  Quality
                                                 (MDEQ) issued  a cease and desist order to Anytime
                                                ! Septic  and  Vaughan, its owner,  on  September 2,
                                                 2009. The letter required Vaughan to stop  operating
                                           ""*•—Anytime Septic, because Vaughan did  not identify an
                                                Approved land application site for disposal of septage
                                                i waste.   Vaughan's  disposal   records  indicate  he
                                                ; disposed  of  waste on  10  different occasions at  his
                                                 residence near  Ronan following receipt  of the cease
                                                land  desist  order  from  MDEQ.    EPA's Criminal
                                                 Investigation  Division  conducted   an  investigation
                                                 which confirmed that Vaughan continued to pump and
dispose of septage waste following the issuance of the cease and desist order.
       During a search of Vaughan's house, Vaughan could not produce records required to be maintained
under  EPA regulations.  Additionally, investigators photographed septage waste disposed  of in  an illegal
manner at his  property.  Vaughan wrote a  statement during  the administrative warrant admitting  he
disposed of waste at his property in  2011.   Vaughan also wrote  a statement  admitting  he deleted  his
computer files of septage business records during execution of the administrative warrant.
       The investigation revealed that Vaughan operated a thriving septage pumping and disposal business,
including pumping septage waste at a federal facility, the National Bison Range Complex, following the cease
and desist order issued by MDEQ in 2009.  EPA-CID verified that throughout this time period (2009-June  21,
2011)  Vaughan  was  not authorized  to  dispose  of septage
waste at any state-approved land application site  nor did the
city of Ronan waste-water treatment plant  authorize waste
haulers to dispose of septage waste at the city publicly  owned
treatment works (POTW).  Business records of the National
Bison Range, confirmed by Vaughan's business records, show
that, despite having no authorized disposal  site,  on June 7,
2011, Vaughn illegally picked up  and  disposed  of septage
waste from vault toilets at the National Bison Range.
         The  case  was  investigated   by  EPA's  Criminal  Computer equipment seized during the execution of
Investigation   Division,  the   Montana  Department  of  an administrative warrant by the Montana Depart-
Environmental Quality, and  the  Lake  County  Environmental  ment of Environmental Health. This equipment was
, i   i -1  n>     .     -   i              ,11    A   • j.  ,  i i r   analyzed by EPA confirming Vaughan deleted rec-
Health Department.  It  was  prosecuted by  Assistant  U.S.
Attorney Kris McLean and Eric Nelson, Special Assistant U.S.
Attorney from EPA.
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                                                      ords during the course of the State's administrative
                                                       warrant. This resulted in the government charging
                                                            Vaughan with Obstruction of Justice.
                                           PageS
                                                                        EPA Bulletin—January 2015

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                                        Sentencings
Owners and Managers of Former Salvage Operations at Former Textile Plant in Tennessee Sentenced to
Prison for Conspiracy Associated with Illegal Asbestos Removal - On January 22, 2015, five people in federal
district court for the District of Tennessee were sentenced to prison terms for conspiring to commit Clean Air
                                          Act offenses in  connection  with the illegal removal  and
                                          disposal  of  asbestos-containing materials  at  the  former
                                          Liberty Fibers Plant in  Hamblen County, Tennessee.  A&E
                                          Salvage had  purchased the plant out of bankruptcy in order
                                        • to salvage metals which remained in the plant after it ceased
                                          j operations.
                                                 Those   sentenced   were   MARK   SAWYER,   of
                                          Morristown, Tennessee, a former manager of A&E Salvage, to
                                          ' the statutory maximum of five years in prison, to be followed
                                          by two years of supervised  release; A&E Salvage manager
                                          NEWELL LYNN SMITH, of Miami, Florida, was sentenced to
                                          37 months and two years of supervised release; A&E Salvage
                                          Manager ERIC GRUENBERG, of Lebanon, Tennessee, received
                                          | a  28-month sentence;  ARMIDA  and MILTO DISANTI, of
                                          Miami,  Florida, each received sentences of six months in
                                          prison,   to   be  followed   by  six  months  of   home
                                          confinement.   All the  defendants  were ordered to  pay
                                          restitution of more than $10.3 million, which will be returned
                                          | to Environmental Protection  Agency's Superfund, which  was
                                          used to clean up the plant site contamination.
                                                 The  sentencing  took place  over three  days  and
                                          included expert  testimony that the exposures of the A&E
                                          Salvage  workers to  asbestos  resulted  in a  substantial
                                          likelihood that  the  workers  would suffer death or serious
      Debris piles with stripped tanks

Stripped boiler from powerhouse of the facility
bodily injury as a result of their exposure constituted a risk of death or serious bodily injury.
      According to court documents, all the defendants pleaded guilty to one criminal felony count for
conspiring to violate the Clean Air Act's "work practice standards" salient to the proper stripping, bagging,
removal and disposal of asbestos.  According to the charges, the conspirators, engaged in  a  multi-year
scheme  in which substantial amounts  of regulated asbestos containing materials were removed the former
Liberty Fibers plant without  removing  all asbestos prior to demolition and stripping, bagging, removing and
disposing of such asbestos in  illegal  manners  and without providing  workers the  necessary  protective
equipment.
      The case was investigated by EPA's Criminal Investigation Division and individuals from the Tennessee
Department of Environmental Conservation. It was prosecuted by Assistant U.S. Attorney Matthew T. Morris
and Senior Trial Attorney Todd W. Gleason, Environmental Crimes Section of the Department of Justice.
Back to Defendant Summary
                                              Page 4
                                                                    EPA Bulletin—January 2015

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                                          Sentencings
Ohio Metal Planting Company Fined for Making Illegal Discharges into Sewer System - On January 27,
2015, KELLY PLATING COMPANY, a metal-plating operation located in Cleveland, Ohio, was fined  $50,000 in
federal district court for the Northern District of Ohio for making illegal discharges with high concentrations
of metals such as chrome and zinc into the sewer system, which in turn, after treatment, discharges to Lake
Erie. The company also agreed to make a $25,000 charitable donation to the Cleveland Foundation, which
will be used to improve water quality in Northeast Ohio.  Thomas E. White, of Fairview Park, pleaded guilty
earlier this year to two counts of making improper discharges. He is scheduled to  be sentenced April 16.
       White was an employee at Kelly Plating and responsible for operating the equipment which reduced
the amount of pollutants discharged into the sewer system to an acceptable  level. Starting around January
28, 2012, White changed  the  way wastewater at  the Kelly Plating facility was  processed.  During the
weekdays, White ensured that the pollution control  equipment was operated properly, according to court
documents.
       However, on the weekends White bypassed the pollution control equipment and discharged partially
treated   wastewater and  sludge  directly  into the  sewer  system. These discharges contained  high
concentrations of chrome and zinc. This practice ended on May 19, 2012, according to court documents.
       The case was investigated by EPA's Criminal Investigation Division, the Ohio EPA, the Ohio Bureau of
Criminal  Investigation, and Northeast Ohio Regional Sewer District. It is being prosecuted by Special Assistant
U.S. Attorney Brad Beeson.
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 The picture to the left shows the discharge point (crock) to the sewer. The piping sections that form the crock had been installed
  to inhibit spills from flo wing into the discharge manhole. This picture was taken upon entry into the facility on the date of the
 search warrant. The "permitted" discharge is the hard-piped line going into the bottom of the crock.  The source is the pretreat-
  ment system behind and to the right of it.  The hoses going into the top of the crock are unpermitted discharge sources. The
  small hose going into the crock led to the pump depicted in the picture on the right, which was pumping from the pit (sludge
                                 holding tank) in the background of the photo.
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EPA Bulletin—January 2015

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                                         Sentencings
Hawaii Corporation to Pay $1 Million for Molasses Spills -- On January 29, 2015, MATSON TERMINALS, INC.,
a Hawaii corporation, was sentenced in federal district court for the district of Hawaii to pay a $400,000 fine
plus restitution of $600,000 based on previously entered guilty pleas to two criminal charges of unlawfully
discharging molasses into Honolulu Harbor.  By the terms of the plea agreement, the restitution would be
divided equally between the Waikiki Aquarium to support coral programs and invasive algae clean-ups and
Sustainable Coastlines Hawaii to inspire local communities to care for coastlines through beach clean-ups.
      According to information  provided to the  court, Matson Terminals,  which loaded molasses from
storage tanks into ships in  Honolulu Harbor, discharged approximately 233,000 gallons of molasses into the
harbor without authorization from at least September 9, 2013, continuing to September 10, 2013. Matson
had been aware of the state of Hawaii Department of Transportation report dated July 31, 2012, that the
pipeline from which the discharge occurred was leaking molasses. The discharge caused or contributed to
the death of approximately 25,000 fish in the harbor.
      The case was investigated by EPA's Criminal Investigation Division. It was prosecuted by Assistant
United States Attorneys Leslie E. Osborne, Jr. and Marshall H. Silverberg.
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                                U.S. Coast Guard photo of the molasses spill.
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EPA Bulletin—January 2015

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                                     Sentencings
,i*»
   \
 illegally disposed of industrial
       wastewater.
Louisiana  Corporation and Two  Owners  Sentenced  for  Scheme to  Illegally Dispose  of Industrial
Wastewater - On January 29, 2015, RAM ENVIRONMENTAL SERVICES,  LLC, RAYMOND MARCEL, JR., and
CYRIL D. ROBICHEAUX, were sentenced in federal district court for the  Middle District of Louisiana for
their roles in a criminal scheme to violate the federal environmental laws.
                                      In June  2013, the  three  defendants pled  guilty  to  bills  of
                                information charging them  with  a conspiracy to defraud EPA and  to
                                violate the Safe  Drinking Water Act. In connection with their convictions,
                                the defendants  had admitted that, in  2011 and 2012, they conspired
                                with themselves and  others to illegally discharge industrial wastewater
                                at locations in Belle River,  Louisiana, and Baton Rouge, Louisiana, and to
                                otherwise obstruct the enforcement  of the federal environmental laws
                                through kickbacks, the creation and use of false documents, and other
                                fraudulent means.
                                      Ram Environmental Services,  LLC, an entity incorporated in the
                                state of Louisiana and  doing business in  Morgan  City,  Louisiana, was
 Injection well in which the defendants  sentenced to make restitution in the  amount of  $114,969.13 to FAS
                                Environmental  Services  (FAS),  based  in  Belle   River,  Louisiana,   a
                                transportation and disposal company that  is primarily in the business of
                                transporting industrial wastewater using a fleet of tanker trucks. RAM
                                was also sentenced to pay a $50,000 fine and a $400 special assessment.
                                RAM was also placed on federal probation for a term of two years.
                                      Marcel, of Berwick, Louisiana, was sentenced to a two-year term
                               I of  probation, a $1,500 fine, restitution in the amount of $114,969.13 to
                                FAS, and  a $100 special assessment. Robicheaux, of  Morgan  City,
                                Louisiana, was also sentenced to a two-year term of probation, a $5,000
                               | fine, full restitution to FAS, and a special assessment.
                                      The  sentencing  hearings were  preceded  by the sentencing  of
                                Michael J.  Vaughn, who  was  sentenced  in October 2013  to  twelve
                                months of incarceration at a federal half-way house, a five-year term of
         Injection well site          probation, forfeiture of approximately $23,000, and  restitution to FAS. In
a related case, Roger J. Dies, of Zachary, Louisiana is awaiting sentencing  as a result of his convictions for
failing to report third party wastewater discharges in violation  of the Clean Water Act, and obstruction of
justice.
       U.S. Attorney Green emphasized that FAS ownership was unaware of  the defendants' scheme. FAS
terminated the employment of Vaughn, its former operations manager, upon learning of the scheme and
cooperated fully.
       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 First Assistant U.S.
Attorney Corey R. Amundson, who serves as Chief of the Criminal Division, and Assistant U.S. Attorney Alan
A. Stevens, who serves as a Deputy Chief.
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                                                                        EPA Bulletin—January 2015

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                                        Sentencings
South Carolina Corporation Owner Gets Prison Term for Extensive Bank Fraud Scam and Environmental
Crime - On January 21, 2015, NANCY MARIE STEIN, of Anderson, South Carolina, was sentenced in federal
district court for the District of South Carolina to a total of 73 months in prison for storing hazardous wastes
without a permit. Stein was also ordered to pay restitution in the amount of $17, 692,974.00.  Her company,
AMERICAN SCREW AND RIVER CORPORATION (ASR) of Anderson, was placed on probation for five years
and ordered also  to pay  restitution for its  involvement in the bank fraud and  storing hazardous wastes
without a permit.  Both Stein and ASR entered pleas of guilty to the charges on December 16, 2013. The case
had originally been set for sentencing on July 15, 2014, but was continued due to issues raised by Stein.
       During the guilty plea hearing in December of 2013, the factual presentation revealed that had the
cases had gone to trial, the Government would have presented evidence indicating that from at least 2004
and continuing until  in 2011, while operating ASR, Stein developed a scheme to defraud a number  of financial
institutions. As part of the ruse, Stein created a number of fictitious manufacturing companies, organizations
and business  associations with apparent  legitimate addresses,  bank accounts and telephone numbers in
various locations throughout the Southeast and the Midwest including Alabama, Georgia, Indiana, Ohio, and
Pennsylvania. The addresses were mail drops, Stein controlled the accounts, and the  telephone numbers
were answering services.  One of the fictitious  entities was  an accounting firm which issued  audits  and
financial statements attesting to the fiscal soundness of ASR.
       Stein would then apply to various financial institutions for loans for ASR. Often she would present to
the institutions false invoices  indicating that ASR had purchased types of  specialized machinery from the
fictitious vendors  which  could be  used  as collateral for loans.   Often, Stein  would have the financial
institutions forward  the loan proceeds to the non-existent vendors' accounts.  The deception also involved
removing legitimate identity plates on existing machinery at the ASR location and  replacing them with false
plates reflecting the  serial numbers of the fictitious machines.
       After a number  of years of running the  scheme, Stein's and  ASR's debts continued to  grow,  and
ultimately, ASR's creditors forced the company into involuntary bankruptcy in 2011.  Thereafter,  the United
States Secret Service was asked to investigate.  At least twenty six victim financial institutions were identified
with cumulative losses in excess of $16 million. When the investigation focused on Stein, in a statement to
the Secret Service, she admitted what she had done and took full responsibility for the fraud.
       With respect to the environmental  crime violation, the government was prepared to show that some
years prior to the involuntary bankruptcy, Stein and ASR had been informed that they needed a permit from
the South Carolina Department of Health and Environmental Control (DHEC) or from the United States EPA to
store the large quantities of hazardous wastes generated  by ASR's manufacturing process.  No permit to
store hazardous waste was ever sought by Stein or ASR or issued by EPA or DHEC.
       In June 2011, as a result of a DHEC  search  of ASR's property, a large quantity of hazardous waste was
discovered on site.   Thereafter, more than 24,000 gallons  of  waste were removed  from  the sight  and
disposed of by EPA at a cost of approximately $1,720,000.00
       The  cases  were investigated EPA's  Criminal Investigation  Division  and  the  United States Secret
Service. It was prosecuted by Assistant United States Attorney William C. Lucius of Greenville.
Back to Defendant Summary
                                              PageS                     EPA Bulletin— January 2015

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                               Indictments/Information!
Texas Man Charged with False Statements in Relation to Blowout Preventer Testing on Oil Platform in Gulf
of Mexico - On January 26, 2015, RACE ADDINGTON, of Houston, Texas, was charged was in federal district
court for the Eastern District of Louisiana with making false statements to agencies or departments of the
United States in relation to the veracity of blowout preventer testing on an offshore oil and gas platform
located at Ship Shoal 225 located on a federal mineral lease in the Gulf of Mexico. If convicted, Addington
faces a maximum term of imprisonment of 5 years per count and/or a maximum fine of $250,000 per count.
       According to court documents, on or about November 27, 2012, production and well workover
operations were being conducted on the platform and the blowout  preventer system had to be tested. A
blowout preventer system is designed to ensure well control and prevent potential release of oil and gas and
possible loss of well control. The blowout preventer pressure chart that recorded the testing of the blowout
preventer testing done on November 27, only recorded 6 of the 7 required components as being tested and
was not signed nor dated by any representative on the platform.
       On or about November 28, 2012, Addington, as the well site supervisor for the platform saw the
results of the blowout preventer testing and had workers create a false blowout preventer test. The next day
when Bureau of Safety and Environmental Enforcement (BSEE) inspectors conducted a routine inspection of
the platform, Addington presented the fabricated blowout preventer pressure test chart to the BSEE
inspectors with the expectation that it would be a passing test and the inspectors would not find the platform
to be in non-compliance for failing to properly test the blowout preventer system.
       On December 6, 2012, during an investigation of the veracity of the blowout preventer test by the
Department of Interior's Investigation and Review Unit, Addington lied and told investigators the false chart
he provided inspectors was a test of the chart recorder and that the inspectors mistakenly retrieved the
wrong pressure chart from the files when in truth and in fact he knew that he had the blowout preventer
pressure test chart fabricated and personally presented the chart to inspectors as the actual test record for
the platform's blowout preventer system.
       The case was investigated by EPA's Criminal Investigation Division and the Department of Interior-
Office of Inspector General (Energy Investigations Unit) with assistance from the Investigations and Review
Unit, Bureau of Safety and Environmental Enforcement. It is being prosecuted by Assistant United States
Attorney Emily K. Greenfield of the United States Attorney's Office's National Security Unit.
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   EPA Pub. 310-N-15-001

                                              Page 9                       EPA Bulletin—January 2015

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