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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. To subscribe to this monthly bulletin you may sign up for
 email alerts at http://www2.epa.gov/enforcement/criminal-enforcement-policy-
 guidance-and-publications.
 September 2015

 In This Edition:

 • Albert Dickson — Region 4

 • Michael J. Conrad — Region 9

 • Alex Jariv — Region 9

 • Wiegardt Brothers, Inc., Frederic "Fritz" Wiegardt — Region 10

 • James Staeheli — Region 10
                    &EPA
             United States
             Environmental Protection
             Agency
EPA Pub. 310-N-15-009

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                                  Defendant Summary
Region
Defendants
Case Type/Status
Region 4
Albert Dickson
CWA/Making false statements under CWA
Region 9
Michael J. Conrad
RCRA/lllegally storing hazardous waste, submitting
false statements to EPA
Region 9
Alex Jariv
Energy Independence and Security Act of 2007/lllegal
generation of fraudulent biodiesel credits, illegal ex-
porting of biodiesel without providing biodiesel cred-
its to the U.S., wire fraud, false statements, money
laundering
Region 9
Wiegardt Brothers, Inc., Frederic
"Fritz" Wiegardt
CWA/Violation of permit requirements
Region 10
James Staeheli
CWA/Violation of CWA permit terms, false statement
                                             Page 2
                                                       EPA Bulletin—September 2015

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                                         Sentencings
Third Person Sentenced in Las VeRas for International  Biofuel Fraud Conspiracy - On September 25,
2015, ALEX JARIV, of Las  Vegas, Nevada, was sentenced  in federal court to 30 months in prison and
three years of supervised release for his role in illegal schemes to generate and sell fraudulent biodiesel
credits, marking the culmination of nearly four years of investigations and  prosecutions for this complex
international fraud scheme. Alex Jariv pleaded guilty to  one count of conspiracy to commit wire fraud,
make false statements and launder monetary instruments.  Jariv was ordered  to forfeit $491,061 in
previously seized cash, an SUV, real estate and the contents of several bank accounts in  the United States
and abroad that were some of his proceeds of the conspiracy.
      Alex Jariv is the third person  to be sentenced for their role in the  scheme.  James Jariv,  of Las
Vegas, Nevada, was sentenced in  August to ten  years in  prison for his role in  the illegal schemes to
generate fraudulent biodiesel credits and for his role in exporting biodiesel without providing biodiesel
credits to the United States.  James  Jariv was  also ordered to make restitution in the amount of
$6,345,830 and to forfeit between $4 to $6 million in cash and other assets.
      Nathan Stoliar, of Australia, was  sentenced to two  years in prison in April for his role  in both
conspiracies and  ordered  to pay  more  than $1.4  million in  restitution  and to forfeit $4 million in
cash. James Jariv and Stoliar both  pleaded guilty to one count of conspiracy, one count of conspiracy to
engage in money laundering, two counts of wire fraud and one count of making false statements under
the Clean Air Act.
      The Energy  Independence and  Security  Act of 2007 created  a  number of federally-funded
programs that provided monetary incentives for the production  and  use of renewable fuels such as
biodiesel in the United States.  Biodiesel producers and importers can generate and attach credits known
as renewable identification numbers (RINs) to the gallons of biodiesel they produce or import.  Because
certain companies, such as companies that sell transportation fuel in  the United States, need  RINs to
comply with regulatory obligations, RINs have significant market value. They are routinely bought and
sold  in the marketplace.
      Beginning around September  of 2009, James Jariv and Stoliar operated and controlled a company
- City Farm Biofuel in Vancouver, British Columbia, Canada - that represented  itself as a producer of
biodiesel from "feedstocks" such as animal fat and vegetable oils.  James Jariv and Stoliar also formed a
company called Canada Feedstock Supply - that represented itself as City  Farm's supplier of feedstocks
necessary to produce  biodiesel.  James  Jariv operated and controlled  a company  based  in Las Vegas
called Global E Marketing (GEM).
      Alex Jariv worked for and on behalf of these companies. Using these three and other closely-held
companies, the three defendants claimed to produce biodiesel at the City Farm facility and to import and
sell biodiesel to GEM and  then generated and sold RINs based  upon this  claimed production, sale and
importation.  In  reality, no biodiesel produced at City Farm was ever imported and sold to GEM as
claimed.  The Jarivs and Stoliar used GEM to claim to blend the biodiesel with petroleum diesel, allowing
them to sell the RINs  separately from any actual biodiesel. Using this scheme, the three men falsely
claimed  to import, purchase and blend more than 4.2 million gallons of biodiesel.  They then sold the
RINs, and fraudulently generated more than $7 million.
      James Jariv and Stoliar also  purchased and resold RIN-less B-99 biodiesel as B-100 biodiesel, which
allowed  them to charge substantially more for this product than if it has been accurately labeled. They
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                                         Sentencings
exported significant  amounts  of the RIN-less  B-99  they bought  in the  United States  to  Canada  and
Australia.  They then sold the biodiesel in those countries and conspired to not acquire and provide RINs to
the United States for these exports as they were required to do by law. In doing so, James Jariv and Stoliar
failed to give to the United States RINs worth in excess of $34 million, keeping this money for themselves
instead.
       Finally, James and Alex  Jariv and  Stoliar conspired to launder the proceeds of their crimes, utilizing
foreign  banking institutions and  complex  financial transactions to  promote  their  illegal schemes  and
distribute  the proceeds of their crimes.  Accounts were utilized  in Canada,  Nevada and Australia  and
transactions  between  the  defendants'  closely-held  companies  were  described  as other legitimate
transactions involving biodiesel, when in reality they were not.
       The case was investigated by EPA's Criminal Investigation Division and the  FBI, with assistance from
the United States Secret Service, the Internal Revenue Service-Criminal Investigations, the Department of
Homeland Security and the Royal Canadian Mounted Police. It was prosecuted by Wayne D. Hettenbach of
the Environmental Crimes Section, U.S. Department of Justice, Assistant U.S. Attorneys Crane M. Pomerantz
and Daniel D. Hollingsworth of the U.S. Attorney's Office in Nevada and Assistant Deputy Chief Darrin L.
McCullough  of the Justice Department's  Criminal Division, Asset Forfeiture and Money Laundering Section,
with the assistance of the Justice Department's Office of International Affairs and the  U.S. Attorney's Office
for the Southern District of Texas.

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                                               Page 4                     EPA Bulletin—September 2015

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                                        Sentencings
 admitted to submitting false doscuments to the
 EPA to conceal his involvement in that case. As-
gard Associates was convicted of illegally storing
 hazardous wastes at their facility in San Diego.
California Businessman Sentenced for SubmittinR False Statements to Avoid BeinR InelJRible for Federal
Contracts - On September 23, 2015, MICHAEL J. CONRAD, an Escondido, California, chemist, was sentenced
in  federal district court for the Southern  District of California for submitting false documents to EPA to
obscure his involvement in a prior federal case and avoid becoming ineligible for federal contracts. Conrad
was sentenced to serve a five year term of probation that includes a six month term of home detention and
 The photos below are from the Asgard Associates  perform  100 hours of community service; and  was ordered to
 criminal investigation in which Michael Conrad   pay a fine of $23,436.  His company was previously convicted of
                                        environmental crimes in federal court in 2012.
                                               In  his guilty plea, Conrad acknowledged that  he  made
                                        eight written  submissions  (with  approximately 57  separate
                                        documents as exhibits) to the EPA Suspension  and  Debarment
                                        Office between April 14, 2013, and April 10, 2015, designed to
                                        make it appear that he was not involved in the actions that gave
                                        rise to the previous criminal case, in order for Conrad to avoid
                                        debarment, or ineligibility  for  federal contracts  and grants.
                                        Conrad  admitted that the  submissions contained  statements
                                        known by him to  be false, and that many  of  the  attached
                                        .exhibits were  documents falsified by him to support his false
 Abandoned chemicals found at Asgard laboratory statements.
                                               Conrad  admitted that  in the prior  case,  in 2012,  he
                                        signed a plea agreement on behalf of Asgard Associates, LLC, in
                                        which Asgard  agreed  to  plead  guilty  to   illegally storing
                                        hazardous wastes at a facility on Roselle Street in San Diego.
                                        The corporate  resolution filed with the court, authorizing  the
                                        plea, was signed on behalf of the Asgard Board of Directors by
                                        "George H. Conrad."Asgard was sentenced to  a term of three
                                        years of  probation  and was ordered to pay $175,411.68 in
                                        restitution for  the costs incurred during the  removal  of  the
                                        chemicals from the Roselle Street facility. Conrad acknowledged
                                        that he  signed  a  document, personally agreeing to pay  the
                                        restitution amount in the event of default by Asgard. As a result
                                        of the conviction of Asgard, the EPA issued  a suspension notice
                                        to  Conrad  on February  14,  2013,  and  initiated  debarment
                                        proceedings.
                                               Conrad  admitted  that  many  of  the  documents   he
                                        submitted to EPA in  opposition to the debarment  were false.
                                        Conrad  admitted   that  he   provided  an  exhibit that  was
                                        purportedly a letter Conrad wrote in 2006,  wherein he advised
                                        the incoming subtenants of the Roselle facility that a hazardous
                                        waste disposal firm had completed the removal of all but  29
                                        containers of chemicals at the San Diego facility, knowing at the
  Abandoned petri dishes containing bacteria
  Abandoned open chemicals and equipment
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                                                                         EPA Bulletin—September 2015

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                                        Sentencings
time that he had not hired a hazardous waste disposal firm to remove chemicals from the facility in 2006.
Conrad further acknowledged submitting exhibits that were purportedly correspondence  between Conrad
and the Asgard Board of Directors in 2008, that were actually written by him in 2013 in order to support his
argument that his participation in Asgard was severely limited.
       Conrad acknowledged that he falsely advised the EPA that no members of  the Asgard Board of
Directors were known to him or communicated with him in 2011-2012, knowing at the time that the  only
individuals who owned and controlled Asgard were Conrad and his wife. Conrad admitted that he submitted
e-mails that were purportedly communications occurring in 2012 between Conrad and  "Laura Ertmann" and
"Jean French" (representing the Asgard Board of Directors), describing his supposed limited participation in
Asgard's operation, knowing at the time that they were falsified because he wrote them in 2013, and he was
aware that there was no Laura Ertmann or Jean French associated with Asgard.  In fact,  the e-mail headers
bore dates that did not match the days of the week on  the calendar. For example, one e-mail from Ertmann
to Conrad was supposedly dated "Monday, June 1, 2012," but June 1, 2012, was actually a Friday.
       Conrad further admitted  that he provided  the  EPA with documents that purportedly were letters
written by Conrad in 2008 to representatives of the subtenant, mentioning Asgard and discussing the need
for the subtenant to remove the chemicals, knowing at the time that they were falsified because he wrote of
the chemicals in 2008. Some of these e-mails also bore date headers that did not match  the calendar day.
       Conrad admitted that he submitted to the EPA an exhibit that was purportedly  an e-mail dated
"Monday, January  21, 2015" (which was actually a Wednesday) from Laura Ertmann in which  Ertmann
advised that the  Asgard Board of Directors  member who signed the resolution authorizing the Asgard  plea
was actually George H. Conrad III, an individual who  immigrated to this country approximately 15 years ago
and lives in southern Pennsylvania, who was unrelated to defendant Conrad. Conrad further admitted that in
his submissions to the EPA, he denied any familial  relationship to the "George Conrad" who had signed the
Asgard Board of Directors resolution authorizing the Asgard plea and asserted that his  older brother George
Conrad had died  in  1995, knowing at the time the statement was made that it was false and that his brother
George Conrad, who is alive and currently resides in California, had signed the resolution.
       The false  submissions caused the agency to  spend nearly 400  hours considering and investigating
facts known to the defendant to be false, and responding to submissions from the defendant that he knew to
be false, resulting in $23,426 of lost EPA man hours.
       The case was investigated by EPA's Criminal Investigation Division, EPA's Office  of Inspector General,
and the FBI.

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                                              PageS                     EPA Bulletin—September 2015

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                                        Sentencings
South Carolina Project ManaRer Sentenced for CWA Violation -- On September 3, 2015, ALBERT DICKSON, of
Red Bank, New Jersey, was sentenced in federal district court for the District of South Carolina to making a
false statement under the Clean Water Act.  Dickson was sentenced to 2 years of probation and 3 months
electronic monitoring. The judge felt based on Dicksons current medical conditions and recent heart surgery
that a sentence of probation was appropriate.
       Evidence presented at the change of  plea hearing established that Dickson was the project manager
overseeing renovations of the L. Mendel River Federal Building in Charleston in the spring and early summer
of 2011.  The South Carolina Department of  Health and Environmental Control inspectors visited the  site in
June 2015 and noticed asbestos violations,  including sweeping asbestos-containing materials down open
drains. When questioned, Dickson indicated that a filtration system had been in place at the time  of the
inspections.  Evidence indicated that it had not been installed until after June 6, 2011, when the violations
were observed.
       The case was investigated by EPA's Criminal Investigation Division and the South Carolina Department
of Health and  Environmental Control.  It is being prosecuted by  Assistant United States Attorney Winston
David Holliday, Jr.

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                                              Page?                     EPA Bulletin—September 2015

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                                    Plea Agreements
WashinRton Oyster ProcessinR Company and Its President Plead Guilty to CWA Violation - On Septem-
ber 25, 2015, WIEGARDT BROTHERS, INC. (WBI), an Ocean Park, Washington, oyster processing company,
and the company's president and majority owner FREDERIC "FRITZ" WIEGARDT, pleaded guilty in federal
district court for the Western District of Washington,to violating the Clean Water Act.  The company ad-
mits that from at least 2012 to 2014, it violated its permit to discharge effluent into Willapa Bay.  Specifi-
cally, the company president knew that the company's general manager was not properly performing the
required monthly effluent sampling as required by the permit.
       As part of  its guilty plea Wiegardt Brothers Inc., agreed to pay a $100,000 fine, make a $75,000
community service payment, implement an  EPA approved environmental management system to insure
future compliance, and publish a public apology in the Pacific Coast Shellfish Growers Association's quar-
terly newsletter.   As part  of his plea  agreement, Wiegardt  is jointly  responsible for payment  of the
$100,000 criminal fine and must complete 75 hours of community service.
      According to the plea agreement the oyster processing company has a National Pollution Discharge
Elimination System (NPDES) permit which requires monthly testing to ensure the wastewater discharged
from the  plant does not have harmful levels of pollutants such as fecal coliform. The water samples are to
be taken  from the discharge pipe with the lab analysis and data submitted  to the Washington State De-
partment of Ecology. At some point before 2012, Wiegardt became aware that the general manager at
the plant was not taking the samples from the discharge pipe because  some of the equipment was not
working properly.  In 2012, Wiegardt was informed by the general manager that the samples were being
taken from the "bubbler," a water and air based cleaning system. Sampling from this location is not repre-
sentative of the facility's waste stream and is not authorized by the facility's NPDES permit.  Indeed, sam-
pling from the bubbler - the location where shucked oysters are cleaned - failed to account for the vast
majority of wastewater components that were discharged from the facility during hours of operation.
       After being notified  about the improper sampling and reporting, Wiegardt took no action for more
than a year. On August 22, 2014 the company reported the violations of the NPDES permit to the Depart-
ment of Ecology and has been working with environmental regulators on a  remediation plan.  Given the
company's practices, regulators were unable to assess whether the violations resulted in any environmen-
tal harm.
       The case was investigated by EPA's Criminal Investigation Division. It is being prosecuted by Assis-
tant United States Attorney James Oesterle and Special Assistant United States Attorney Karla Perrin.

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                                            PageS                     EPA Bulletin—September 2015

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                                    Plea Agreements
Washington State Man Pleads Guilty to CWA Violations -- On September 21, 2015, JAMES STAEHELI, a
Washington state resident, plead guilty in federal district court for the District of Alaska for Clean Water
Act violations and for submitting false information.  He was an employee of XS Platinum, Inc., a Delaware
                                  Corporation. The  company and five of  its officers and  employees,
                                  including Staeheli,  were indicted on November 18, 2014. The indict-
                                  ment charged XS Platinum, Inc. (XSP), and Staeheli with knowingly
                                 j violating the terms of XSP's CWA permit in 2011.
                                        According to the indictment,  XSP  held 159 placer mining
                                 I 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
 Turbid process water from placer mining
      _,  .        .   .      ...   „   metal, along with smaller amounts of gold and palladium. All but 21
 at the Platinum Creek mine was illegally
 discharged into Platinum/Squirrel Creek.  of tne  claims were on land managed by the BLM, with the remaining
                                  (undeveloped) claims lying within the Togiak National Wildlife Ref-
uge.  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 salm-
on. After flowing through BLM land, the Salmon River crosses the Togiak National Wildlife Refuge before
entering the  Pacific  Ocean at Kuskokwim Bay. The CWA  prohibits discharges of industrial wastewaters
from mining operations in violation of CWA permits which govern those discharges.  According to the in-
dictment, 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 alleged 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 alleged 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  re-
port 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  case was investigated  by EPA's Criminal Investigation Division and the U.S. Department of Inte-
rior, Bureau of Land  Management, Office of Law Enforcement and Security.  It  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 U.S. Environmental
Protection Agency Regional Criminal Enforcement Counsel  Dean Ingemanson.
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                                             Page 9                     EPA Bulletin—September 2015

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