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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. 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.
January—February 2016
In This Edition:
• Robert J. Reynolds — Region 3
• Charles E. Herzing — Region 3
• Freedom Industries, Inc., Michael Burdette — Region 3
• William E. Tis — Region 3
• Dennis P. Farrell — Region 3
• Gary Southern — Regin 3
• Southern Grease Company, George Butterworth, Gerald McGee — Region 4
• Joseph Furando — Region 5
• Environmental Enterprises Inc., Kyle M. Duffens, Gerald E. Nocks — Region
5
• Rodney K. Beshears — Region 6
• The Rooter Guy, LLC, Ben Broyles — Region 10
&EPA
United States
Environmental Protection
Agency
EPA Pub. 310-N-16-002
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Defendant Summary
Region
Defendants
Case Type/Status
Region 3
Robert J. Reynolds
CWA/Federal crimes associated with a chemical spill,
including negligently discharging a pollutant,
unlawfully discharging refuse matter, and knowingly
violating an environmental permit.
Region 3
Charles E. Herzing
Refuse Act/Unlawful discharge of refuse matter
Region 3
Freedom Industries, Michael E.
Burdette
Energy Independence and Security Act/Illegal scheme
to defraud biodiesel buyers and United States
taxpayers by fraudulently selling biodiesel incentives
Region 3
William E. Tis
Refuse Act/Unlawful discharge of refuse matter
Region 3
Dennis P. Farrell
Refuse Act/Unlawful discharge of refuse matter
Region 3
Gary Southern
Refuse Act/Unlawful discharge of refuse matter,
negligent discharge of a pollutant, negligent violating
of an environmental permit
Page 2
EPA Bulletin—February 2016
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Defendant Summary
Region
Defendants
Case Type/Status
Region 4
Southern Grease Company,
George Butter worth, Gerald
McGee
CWA/lllegal disposal of waste grease into municipal
sewer systems
Region 5
Joseph Furando
Energy Independence and Security Act/Illegal scheme
to to defraud biodiesel buyers and United States tax-
payers by fraudulently selling biodiesel incentives
Region 5
Environmental Enterprises Inc.,
Kyle M. Duffens, Gerald E. Nocks
Involuntary manslaughter, reckless homicide, tam-
pering with records, tampering with evidence, and
violating the terms of a solid waste license
Region 6
Rodney K. Beshears
CAA/Violating work practice standards of the Clean
Air Act
Region 10
The Rooter Guv, LLC, Ben Broyles
CWA/Pumping of septic waste into municipal sewer
system
PageS
EPA Bulletin—February 2016
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Sentencings
West VirRinia Company Official Sentenced for Role in Chemical Spill - ROBERT J. REYNOLDS, of Apex,
North Carolina, a former official of Freedom Industries, was sentenced on February 1, 2016, in federal
district court for the Southern District of West Virginia to three years of probation and a $10,000 fine for a
Clean Water Act violation connected to the 2014 Elk River chemical spill. Reynolds previously pleaded guilty
in federal court to negligently discharging a pollutant in March 2015. Reynolds is one of six former officials
of Freedom Industries, in addition to Freedom Industries itself as a corporation, to be prosecuted for
federal crimes associated with the chemical spill.
On January 9, 2014, a major chemical leak was discovered in Charleston at the above-ground
storage tank area owned and operated by Freedom Industries (Freedom) on the Elk River. Freedom used
these storage tanks to keep and process chemicals, and the leak
consisted primarily of 4-methylcyclohexane methanol (MCHM),
a chemical used in the coal mining industry as a cleansing agent.
A significant amount of MCHM leaked into the Elk River, flowed
into a water treatment plant, and contaminated the water
supply of Charleston and the surrounding areas for several days.
Freedom did not have a permit required by law that would have
Holes in Freedom Industries crude MCHM Tank allowed tne company to discharge MCHM into the Elk River.
Beginning in 2002, Reynolds worked with Freedom as an
environmental consultant and was responsible for developing and maintaining pollution prevention plans.
Reynolds admitted that he should have developed and maintained a storm water pollution prevention plan
and a groundwater protection plan for the MCHM storage tanks that could have prevented the chemical
spill. Freedom did have a permit issued by West Virginia's Department of Environmental Protection that
allowed for the discharge of storm water and groundwater subject to monitoring and reporting
requirements. However, this permit did not allow for the discharge of MCHM, and required the
development and maintenance of a storm water plan and a groundwater plan. Generally, storm water and
groundwater plans identify potential sources of pollution and outline steps to prevent, contain, and reduce
pollutants.
Reynolds admitted that he should have known of this requirement. He also admitted that while
there was no storm water or groundwater plan in place at Freedom's facility on the Elk River, there were
such plans implemented at another facility operated by Freedom in Nitro. Reynolds even provided training
to Freedom's employees at the Nitro facility on its plans, despite the absence of similar plans at Freedom's
facility by the Elk River.
Reynolds knew of and should have appreciated the hazards associated with MCHM and the need to
take reasonable steps to ensure that it did not spill into the Elk River. Reynolds admitted that he carried out
his duties without due care for regulatory and environmental compliance, and that his failure to implement
a storm water plan was a proximate cause of the 2014 chemical spill of MCHM.
Reynolds is the first defendant sentenced as part of the investigation into the chemical spill.
Freedom itself, which has been in bankruptcy since shortly after the chemical spill, pleaded guilty to
violating the Clean Water Act, the unlawful discharge of refuse matter in violation of the Refuse Act, and
violating an environmental permit.
Charles E. Herzing, of McMurray, Pennsylvania, and William E. Tis, of Verona, Pennsylvania, former
Page 4 EPA Bulletin—February 2016
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Sentencings
March 2015 to violating the Clean Water Act by negligently discharging a pollutant.
Dennis P. Farrell, of Charleston, a former Freedom president and owner, pleaded guilty in August
2015 to violating the federal Refuse Act and violating a permit by failing to have a pollution prevention plan.
Gary Southern, of Marco Island, Florida, the president of Freedom at the time of the spill, pleaded guilty in
August 2015 to violating the Clean Water Act, negligently discharging refuse matter in violation of the Refuse
Act, and violating a permit by failing to have a pollution prevention plan.
The case was investigated by EPA's Criminal Investigation Division and the FBI. It is being prosecuted
by Assistant United States Attorneys Philip H. Wright, Larry R. Ellis, and Eric P. Bacaj, as well as EPA's Regional
Criminal Enforcement Counsel Perry D. McDaniel.
Back to Defendant Summary
PageS EPA Bulletin—February 2016
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Sentencings
Former Freedom Industries Owner Sentenced for Role in Chemical Spill - On February 2, 2016, CHARLES E.
HERZING, of McMurray, Pennsylvania, a former owner of Freedom Industries, was sentenced in federal
district court for the Southern District of West Virginia to three years of probation and ordered to pay a
$20,000 fine for a Refuse Act violation connected to the 2014 Elk River chemical spill. Herzing previously
pleaded guilty in March 2015 to unlawfully discharging refuse matter. Herzing is one of six former officials of
Freedom Industries, in addition to Freedom Industries itself as a corporation, to be prosecuted for federal
crimes associated with the chemical spill.
Herzing, along with co-defendants Dennis P. Farrell and William E. Tis, owned Freedom until
December 2013, when they sold their shares to a Pennsylvania corporation. From 2004 until the 2013 sale,
Herzing served as the Vice President of Freedom. In this role, Herzing had the responsibility and the authority
to ensure that Freedom and its facility on the Elk River complied with the law.
Freedom had a permit issued by West Virginia's Department of Environmental Protection that
allowed for the discharge of storm water and groundwater subject to monitoring and reporting
requirements. However, this permit did not allow for the
discharge of MCHM, and required the development and
maintenance of a storm water plan and a groundwater
plan. Generally, storm water and groundwater plans
identify potential sources of pollution and outline steps
to prevent, contain, and reduce pollutants.
Herzing admitted that he was aware of the
permit and was put on notice that Freedom was
required to have a storm water plan. He further
admitted that he had the responsibility to ensure that
Freedom complied with the permit by having a storm
water and groundwater plan in place. During Herzing's
tenure as a corporate officer, Freedom never developed a storm water or groundwater plan, which was a
contributing cause to the chemical spill.
Freedom itself, which has been in bankruptcy since shortly after the chemical spill, pleaded guilty to
violating the Clean Water Act, the unlawful discharge of refuse matter in violation of the Refuse Act, and
violating an environmental permit.
The investigation of the chemical spill was conducted by the Federal Bureau of Investigation and the
Environmental Protection Agency's Criminal Investigation Division. Assistant United States Attorneys Philip H.
Wright, Larry R. Ellis, and Eric P. Bacaj, as well as the Environmental Protection Agency's Regional Criminal
Enforcement Counsel Perry D. McDaniel, are handling the prosecutions. United States District Judge Thomas
E. Johnston imposed the sentence, and will preside over the remaining sentencing hearings associated with
the chemical spill.
Back to Defendant Summary
Charleston Residents Waiting for Drinking Water
PageS
EPA Bulletin—February 2016
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Sentencings
Freedom Industries and a Former Plant ManaRer Sentenced for Roles in Chemical Spill -- On February 4,
2016, FREEDOM INDUSTRIES, INC., and a former plant manager at Freedom Industries were sentenced in
federal district court for the Southern District of West Virginia for environmental crimes connected to the
2014 Elk River chemical spill. Freedom Industries (Freedom) was sentenced to a fine of $900,000, to be paid
after all other claims against Freedom are satisfied, for negligently discharging a pollutant, unlawfully
discharging refuse matter, and knowingly violating an environmental permit. Freedom has been in
bankruptcy since shortly after the chemical spill.
MICHAEL E. BURDETTE, of Dunbar, West Virginia, was sentenced to three years of probation and a
$2,500 fine for negligently discharging a pollutant. Both Freedom and Burdette previously pleaded guilty in
March 2015. Burdette is one of six former officials of Freedom Industries, in addition to Freedom Industries
itself as a corporation, to be prosecuted for federal crimes associated with the chemical spill.
On January 9, 2014, a major chemical leak was discovered in Charleston at the above-ground storage
tank area owned and operated by Freedom Industries on the Elk River. Freedom used these storage tanks to
keep and process chemicals, and the leak consisted primarily of 4-methylcyclohexane methanol (MCHM), a
chemical used in the coal mining industry as a cleansing agent. A significant amount of MCHM leaked into the
Elk River, flowed into a water treatment plant, and contaminated the water supply of Charleston and the
surrounding areas for several days. Freedom did not have a permit required by law that would have allowed
the company to discharge MCHM into the Elk River.
Freedom had a permit issued by West Virginia's Department of Environmental Protection that
allowed for the discharge of storm water and groundwater subject to monitoring and reporting
requirements. However, this permit did not allow for the discharge of MCHM, and required the development
and maintenance of a storm water plan and a groundwater plan. Generally, storm water and groundwater
plans identify potential sources of pollution and outline steps to prevent, contain, and reduce pollutants.
Freedom admitted that it should have taken reasonable steps to ensure that MCHM did not leak into
the Elk River. Freedom did not maintain the containment area that was supposed to prevent a chemical spill
from reaching the Elk River. Freedom also failed to inspect and maintain the storage tank holding MCHM. In
spite of the permit requirements, Freedom also failed to implement and maintain a storm water and
groundwater plan. Furthermore, Freedom did not conduct the necessary training to ensure all personnel
were working in compliance with environmental laws. When the chemical spill occurred, Freedom did not
have adequate spill prevention material on hand and instead, had on hand a mere two bags of absorbent
material and no booms or other materials to stem the flow of MCHM. Freedom admitted that its failure in all
of these essential areas was a proximate cause of the chemical spill.
Burdette worked as a plant manager for Freedom's facility on the Elk River. In that role, Burdette was
responsible for operating and maintaining Freedom's facility in a safe manner and in compliance with
environmental laws. He was also responsible for making sure the employees he supervised were properly
trained in environmental compliance. Burdette admitted he should have known Freedom was required to
implement and maintain a storm water and groundwater plan as required by the permit. He also admitted he
knew the measures Freedom had in place to handle a chemical spill were inadequate, and that Freedom
should have had proper containment structures to contain a spill from the largest storage tank for 72 hours.
Burdette further admitted that his failure to implement these required safety measures was a proximate
cause of the chemical spill.
Page? EPA Bulletin—February 2016
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Sentencings
Including Freedom and Burdette, four defendants have been sentenced as part of the investigation
into the chemical spill. Robert J. Reynolds, of Apex, North Carolina, who worked as an environmental
consultant with Freedom, was sentenced on February 1, 2016 for negligently discharging a pollutant. Charles
E. Herzing, of McMurray, Pennsylvania, a former owner and vice president of Freedom, was sentenced on
Tuesday for unlawfully discharging refuse matter.
William E. Tis, of Verona, Pennsylvania, a former owner of Freedom, pleaded guilty in March 2015 to
the unlawful discharge of refuse matter. Tis is scheduled to be sentenced on February 8, 2016.
Dennis P. Farrell, of Charleston, a former Freedom president and owner, pleaded guilty in August 2015 to
violating the federal Refuse Act and violating a permit by failing to have a pollution prevention plan. Farrell is
scheduled to be sentenced on February 11, 2016.
Gary Southern, of Marco Island, Florida, the president of Freedom at the time of the spill, pleaded
guilty in August 2015 to violating the Clean Water Act, unlawfully discharging refuse matter in violation of the
Refuse Act, and violating a permit by failing to have a pollution prevention plan. Southern is scheduled to be
sentenced on February 17, 2016.
The investigation of the chemical spill was conducted by the Federal Bureau of Investigation and the
Environmental Protection Agency's Criminal Investigation Division. Assistant United States Attorneys Philip H.
Wright, Larry R. Ellis, and Eric P. Bacaj, as well as the Environmental Protection Agency's Regional Criminal
Enforcement Counsel Perry D. McDaniel, are handling the prosecutions. United States District Judge Thomas
E. Johnston imposed the sentence, and will preside over the remaining sentencing hearings associated with
the chemical spill.
Back to Defendant Summary
PageS EPA Bulletin—February 2016
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Sentencings
Former Freedom Industries Owner Sentenced for Role in Chemical Spill -- On February 8, 2016, WILLIAM E.
TIS, of Verona, Pennsylvania, a former owner of Freedom Industries, was sentenced in federal district court
for the Southern District of West Virginia to three years of probation and a $20,000 fine for an environmental
crime connected to the 2014 Elk River chemical spill. Tis previously pleaded guilty to unlawfully discharging
refuse matter in March 2015. Tis is one of six former officials of Freedom Industries, in addition to Freedom
Industries itself as a corporation, to be prosecuted for federal crimes associated with the chemical spill.
On January 9, 2014, a major chemical leak was discovered in Charleston at the above-ground storage
tank area owned and operated by Freedom Industries (Freedom) on the Elk River. Freedom used these
storage tanks to keep and process chemicals, and the leak consisted primarily of 4-methylcyclohexane
methanol (MCHM), a chemical used in the coal mining industry as a cleansing agent. A significant amount of
MCHM leaked into the Elk River, flowed into a water treatment plant, and contaminated the water supply of
Charleston and the surrounding areas for several days. Freedom did not have a permit required by law that
would have allowed the company to discharge MCHM into the Elk River.
Tis, along with co-defendants Dennis P. Farrell and Charles E. Herzing, owned Freedom until
December 2013, when they sold their shares to a Pennsylvania corporation. From 2004 until the 2013 sale,
Tis served as the secretary of Freedom. In this role, Tis had the responsibility and the authority to ensure that
Freedom and its facility on the Elk River complied with the law.
Freedom had a permit issued by West Virginia's Department of Environmental Protection that
allowed for the discharge of storm water and groundwater subject to monitoring and reporting
requirements. However, this permit did not allow for the discharge of MCHM, and required the development
and maintenance of a storm water plan and a groundwater plan. Generally, storm water and groundwater
plans identify potential sources of pollution and outline steps to prevent, contain, and reduce pollutants.
Tis admitted that he was aware of the permit and was put on notice that Freedom was required to
have a storm water plan. He further admitted that he had the responsibility to ensure that Freedom complied
with the permit by having a storm water and groundwater plan in place. During Tis' tenure as a corporate
officer, Freedom never developed a storm water or groundwater plan, which was a contributing cause to the
chemical spill.
Tis is one of five defendants that have been sentenced as part of the investigation into the chemical
spill. Robert J. Reynolds, of Apex, North Carolina, who worked as an environmental consultant with Freedom,
was sentenced on February 1, 2016, for negligently discharging a pollutant. Charles E. Herzing, of McMurray,
Pennsylvania, a former owner and vice president of Freedom, was sentenced on February 2, 2016, for
unlawfully discharging refuse matter. Freedom, as a corporation, was sentenced on February 4, 2016, for
negligently discharging a pollutant, unlawfully discharging refuse matter, and knowingly violating an
environmental permit. Michael E. Burdette, of Dunbar, a former plant manager for Freedom's facility on the
Elk River, was sentenced on February 4, 2016, for negligently discharging a pollutant.
Dennis P. Farrell, of Charleston, a former Freedom president and owner, pleaded guilty in August
2015 to violating the Refuse Act and violating a permit by failing to have a pollution prevention plan. Farrell
was sentenced on February 11, 2016.
Page 9 EPA Bulletin—February 2016
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Sentencings
Gary Southern, of Marco Island, Florida, the president of Freedom at the time of the spill, pleaded
guilty in August 2015 to negligently discharging a pollutant, unlawfully discharging refuse matter in violation
of the Refuse Act, and violating a permit by failing to have a pollution prevention plan. Southern was
sentenced on February 17, 2016.
The investigation of the chemical spill was conducted by EPA's Criminal Investigation Division and the
Federal Bureau of Investigation. Assistant United States Attorneys Philip H. Wright, Larry R. Ellis, and Eric P.
Bacaj, as well as EPA's Regional Criminal Enforcement Counsel Perry D. McDaniel, are handling the
prosecutions.
Back to Defendant Summary
Page 10 EPA Bulletin—February 2016
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Sentencings
Former Freedom Industries Owner Headed to Prison for Role in Chemical Spill -- On February 11, 2016,
DENNIS P. FARRELL, of Charleston, West Virginia, a former owner of Freedom Industries, was sentenced in
federal district court for the Southern District of West Virginia to 30 days in federal prison, six months of
supervised release, and a $20,000 fine for environmental crimes connected to the 2014 Elk River chemical
spill. Farrell previously pleaded guilty in August 2015 to unlawfully discharging refuse matter and violating an
environmental permit by failing to have a pollution prevention plan. Farrell is one of six former officials of
Freedom Industries, in addition to Freedom Industries itself as a corporation, to be prosecuted for federal
crimes associated with the chemical spill.
On January 9, 2014, a major chemical leak was discovered in Charleston at the above-ground storage
tank area owned and operated by Freedom Industries (Freedom) on the Elk River. Freedom used these
storage tanks to keep and process chemicals, and the leak consisted primarily of 4-methylcyclohexane
methanol (MCHM), a chemical used in the coal mining industry as a cleansing agent. A significant amount of
MCHM leaked into the Elk River, flowed into a water treatment plant, and contaminated the water supply of
Charleston and the surrounding areas for several days. Freedom did not have a permit required by law that
would have allowed the company to discharge MCHM into the Elk River.
Farrell, along with co-defendants Charles E. Herzing and William E. Tis, owned Freedom until
December 2013, when they sold their shares to a Pennsylvania corporation. From 2001 until the 2013 sale,
Farrell served as the president of Freedom. After the sale, Farrell continued to work at Freedom's facility on
the Elk River and continued to describe himself as president of the company. In his role as a corporate officer,
Farrell had the responsibility and the authority to ensure that Freedom and its facility on the Elk River
complied with the law.
Freedom had a permit issued by West Virginia's Department of Environmental Protection that
allowed for the discharge of storm water and groundwater subject to monitoring and reporting
requirements. However, this permit did not allow for the discharge of MCHM, and required the development
and implementation of a storm water plan and a groundwater plan. Generally, storm water and groundwater
plans identify potential sources of pollution and outline steps to prevent, contain, and reduce pollutants.
Farrell admitted that he was aware of the permit and knew that Freedom was required to have a
storm water plan. He further admitted that he had the responsibility to ensure that Freedom complied with
the permit by having a storm water and groundwater plan in place. During Farrell's tenure as a corporate
officer, Freedom never developed or implemented a storm water or groundwater plan, which was a
proximate and contributing cause of the chemical spill.
Farrell is one of six defendants that have been sentenced as part of the investigation into the
chemical spill. Robert J. Reynolds, of Apex, North Carolina, who worked as an environmental consultant with
Freedom, was sentenced on February 1, 2016, for negligently discharging a pollutant. Charles E. Herzing, of
McMurray, Pennsylvania, a former owner and vice president of Freedom, was sentenced on February 2,
2016, for unlawfully discharging refuse matter. Freedom, as a corporation, was sentenced on February 4,
2016, for negligently discharging a pollutant, unlawfully discharging refuse matter, and knowingly violating an
environmental permit. Michael E. Burdette, of Dunbar, a former plant manager for Freedom's facility on the
Page 11 EPA Bulletin—February 2016
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Sentencings
Elk River, was sentenced on February 4, 2016, for negligently discharging a pollutant. William E. Tis, of
Verona, Pennsylvania, a former owner and secretary of Freedom, was sentenced on February 8, 2016 for
unlawfully discharging refuse matter.
Gary Southern, of Marco Island, Florida, the president of Freedom at the time of the spill, pleaded
guilty in August 2015 to negligently discharging a pollutant, unlawfully discharging refuse matter, and
negligently violating a permit by failing to have a pollution prevention plan. Southern was sentenced on
February 17, 2016.
The chemical spill was investigated by EPA's Criminal Investigation Division and the Federal Bureau of
Investigation. It is being prosecuted by Assistant United States Attorneys Philip H. Wright, Larry R. Ellis, and
Eric P. Bacaj, as well as the Environmental Protection Agency's Regional Criminal Enforcement Counsel Perry
D. McDaniel.
Back to Defendant Summary
Page 12 EPA Bulletin—February 2016
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Sentencings
Former Freedom Industries President Sentenced to Prison for Role in Chemical Spill - On February 17,
2016, GARY SOUTHERN, of Marco Island, Florida, the former president of Freedom Industries, was
sentenced in federal district court for the Southern District of West Virginia to 30 days in federal prison, to be
followed by a six-month term of supervised release, and a $20,000 fine for environmental crimes connected
to the 2014 Elk River chemical spill. Southern previously pleaded guilty in August 2015 to negligently
discharging a pollutant, unlawfully discharging refuse matter, and negligently violating an environmental
permit by failing to have a pollution prevention plan. Southern is one of six former officials of
Freedom Industries, in addition to Freedom Industries itself as a corporation, to be prosecuted for federal
crimes associated with the chemical spill.
On January 9, 2014, a major chemical leak was discovered in Charleston at the above-ground storage
tank area owned and operated by Freedom Industries (Freedom) on the Elk River. Freedom used these
storage tanks to keep and process chemicals, and the leak consisted primarily of 4-methylcyclohexane
methanol (MCHM), a chemical used in the coal mining industry as a cleansing agent. A significant amount of
MCHM leaked into the Elk River, flowed into a water treatment plant, and contaminated the water supply of
Charleston and the surrounding areas for several days. Freedom did not have a permit required by law that
would have allowed the company to discharge MCHM into the Elk River.
Southern became associated with Freedom in 2009 and joined its board of directors in March 2010.
He became president of Freedom in December 2013, and was serving as Freedom's president at the time of
the chemical spill. In these capacities, Southern was a responsible corporate officer of Freedom from at least
March 2010 through January 9, 2014, with the responsibility and the authority to ensure that Freedom and
its facility on the Elk River complied with the law.
Freedom had a permit issued by West Virginia's Department of Environmental Protection that
allowed for the discharge of storm water and groundwater subject to monitoring and reporting
requirements. However, this permit did not allow for the discharge of MCHM, and required the development
and implementation of a storm water plan and a groundwater plan. Generally, storm water and groundwater
plans identify potential sources of pollution and outline steps to prevent, contain, and reduce pollutants.
Southern admitted that he was aware of the permit and that he should have known that Freedom
was required to have a storm water plan. He further admitted that he had the responsibility and authority to
ensure that Freedom complied with the permit by having a storm water and groundwater plan in place.
During Southern's tenure as a responsible corporate officer, Freedom never developed or implemented a
storm water or groundwater plan. Southern's negligence in failing to ensure that Freedom developed and
implemented a storm water and groundwater plan was a proximate and contributing cause of the chemical
spill.
Southern is one of seven defendants that have been sentenced as part of the investigation into the
chemical spill. Robert J. Reynolds, of Apex, North Carolina, who worked as an environmental consultant with
Freedom, was sentenced on February 1, 2016, for negligently discharging a pollutant. Charles E. Herzing, of
Page 13 EPA Bulletin—February 2016
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Sentencings
McMurray, Pennsylvania, a former owner and vice president of Freedom, was sentenced on February 2, 2016,
for unlawfully discharging refuse matter. Freedom, as a corporation, was sentenced on February 4, 2016, for
negligently discharging a pollutant, unlawfully discharging refuse matter, and knowingly violating an
environmental permit. Michael E. Burdette, of Dunbar, a former plant manager for Freedom's facility on the
Elk River, was sentenced on February 4, 2016, for negligently discharging a pollutant. William E. Tis, of
Verona, Pennsylvania, a former owner and secretary of Freedom, was sentenced on February 8, 2016, for
unlawfully discharging refuse matter. Dennis P. Farrell, of Charleston, a former Freedom president and owner,
was sentenced on February 11, 2016, for unlawfully discharging refuse matter and violating a permit by failing
to have a pollution prevention plan.
The investigation of the chemical spill was conducted by EPA's Criminal Investigation Division and the
Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Philip H. Wright, Larry
R. Ellis, and Eric P. Bacaj, as well as the Environmental Protection Agency's Regional Criminal Enforcement
Counsel Perry D. McDaniel, handled the prosecutions.
Back to Defendant Summary
Page 14 EPA Bulletin—February 2016
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Sentencings
Tennessee Grease HaulinR Company and Executives Sentenced for CWA Violations -- On February 19, 2016,
SOUTHERN GREASE COMPANY, a grease hauling company that had been based in Dickson, Tennessee, was
sentenced in federal district court for the Middle District of Tennessee to pay a criminal fine of $280,000 and
to forfeit an additional $113,500. The company was also ordered to make restitution to municipal authorities
in Dickson and Clarksville, Tennessee. Southern Grease pleaded guilty in May 2015 to four felony violations
arising from its illegal disposal of waste grease into municipal sewer systems.
Southern Grease, which contracted with restaurants and other customers in Tennessee and Kentucky
to collect and dispose of the customers' waste grease, illegally discharged waste grease into grease
interceptors that were connected to the municipal sewer systems. This illegal dumping of grease caused
substantial damage to municipal sewer systems by clogging pipes and interrupting the operation of pump
stations. In December 2013 Southern Grease dumped waste grease into a grease interceptor in Clarksville,
Tennessee, which resulted in the obstruction of pipes within the Clarksville sewer system and damage to a
Clarksville pumping station, the operation of
which was interrupted for cleaning and repairs.
Previously, on February 1, 2016,
GEORGE BUTTERWORTH, of Dickson, Tenn.,
was sentenced to serve two months in prison
and one year of supervised release.
Butterworth was president and an owner of
Southern Grease, and had pleaded guilty to
violating the Clean Water Act; conspiring to
violate the Clean Water Act; and to making
false statements to agents with the
Environmental Protection Agency. Butterworth
was also ordered to pay restitution to
Southern Crease Pump Station municipal authorities in Dickson and Clarksville.
On November 24, 2015, GERALD MCGEE,
of Dickson, Tenn., was sentenced to one month
in prison plus two years of supervised release for his role in these offenses. McGee was the operations
manager for Southern Grease and was also convicted of three felony violations in connection with the illegal
dumping of waste grease. He was also ordered to pay restitution to municipal authorities in Dickson and
Clarksville.
The case was investigated by the EPA's Criminal Investigation Division with assistance from the
Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney William F. Abely.
Back to Defendant Summary
Page 15
EPA Bulletin—February 2016
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Sentencings
New Jersey Man Sentenced in Indiana to 20 Years for Biodiesel Fraud Scheme - On January 8, 2016, JOSEPH
FURANDO, of Montvale, New Jersey, was sentenced in federal district court for the Southern District of
Indiana to 20 years in prison, three years of supervised release and to pay more than $56 million in
restitution for his role in an elaborate scheme to defraud biodiesel buyers and United States taxpayers by
fraudulently selling biodiesel incentives.
During the sentencing hearing, Furando was ordered to pay more than $56 million in restitution,
jointly and severally with other defendants. That amount reflects the losses Furando and his co-conspirators
imposed on fraud victims and United States taxpayers. Under the terms of a plea agreement, Furando is
obligated to forfeit the fruits of his crime, which include a Ferrari, other cars, a million-dollar home, artwork,
a piano and two biodiesel powered motorcycles.
Furando's scheme may be summarized as follows: From
2007 through 2012, Indiana-based E biofuels owned a biodiesel Over tne COUrse of apprOXJ-
manufacturing plant in Middletown, Indiana. Biodiesel is a fuel mately tWO years, the de-
that can be used in diesel engines and that is made from fendantS fraudulently Sold
renewable resources, including soybean oil and waste grease
from restaurants. Under the Energy Independence and Security more tnan 35 miHion gallons
Act, properly manufactured biodiesel was eligible for a dollar per of fuel for 3 total COSt of Over
gallon tax credit as well as another valuable credit, called a £^45 5 mj||jOn The defend-
Renewable Identification Number (RIN) that petroleum refiners
and importers could use to demonstrate compliance with antS realized more than $55
federal renewable fuel obligations. These incentives can be million in grOSS profits, at the
claimed once and only once for any given volume of biodiesel. expense of thejr customers
Furando admitted that sometime in late 2009, he and his
companies, New Jersey-based defendants Caravan Trading anc" ^-S. taxpayers.
Company and CIMA Green, began supplying E biofuels with
biodiesel that was actually made by other companies and had already been used to claim tax credits and
RINs. Because these incentives had already been claimed, Furando could purchase the biodiesel at much
lower prices, sometimes for more than two dollars per gallon less than biodiesel that was still eligible for the
credits. The conspiracy functioned as follows: Furando supplied the product to E biofuels and his co-
conspirators would claim that E-biofuels made the fuel and then they would illegally re-certify the fuel and
sell it at the much higher market price for incentivized biodiesel, known as B100 with RINs. Within the circle
of those he trusted, Furando referred to this fraud scheme as "Alchemy."
Furando, his New Jersey-based companies and his Indiana-based co-defendants realized huge per
gallon profits through this scheme, sometimes in excess of $15,000 per truckload. Furando realized his
profits through the prices he charged E biofuels. Over the course of approximately two years, the defendants
fraudulently sold more than 35 million gallons of fuel for a total cost of over $145.5 million. The defendants
realized more than $55 million in gross profits, at the expense of their customers and U.S. taxpayers.
In separate hearings, three corporations at the heart of the scheme were also sentenced for their
joint liability in the scheme. Furando's companies, CIMA Green LLC, and Caravan Trading LLC, were both
sentenced to pay $56 million in restitution and million dollar fines. The companies, which are largely defunct,
must serve two years' probation to ensure that what assets remain are properly directed toward
Page 16 EPA Bulletin—February 2016
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Sentencings
The case was investigated by EPA's Criminal Investigation Division, IRS-Criminal Investigation, the FBI
and the Securities and Exchange Commission, with assistance from the U.S. Secret Service and the U.S.
Department of Agriculture's Office of Inspector General-Investigations. It is being prosecuted by Senior
Litigation Counsel Steven D. DeBrota of the U.S. Attorney's Office, Assistant Chief Thomas T. Ballantine of the
Environmental Crimes Section in the Department of Justice's Environment and Natural Resources Division
and Jake Schmidt, a Special Assistant U.S. Attorney of the U.S. Attorney's Office and Senior Attorney for the
Securities and Exchange Commission.
Back to Defendant Summary
Page 17 EPA Bulletin—February 2016
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Sentencings
Idaho Septic Waste Business and Its Owner Sentenced for CWA violation - On February 2, 2016, THE
ROOTER GUY, LLC, and its founder BEN BROYLES, of Hayden, Idaho, were sentenced in federal district court
for the District of Idaho for violating the Clean Water Act. The Rooter Guy, LLC was sentenced to three years
organization probation. Broyles, the majority owner and operator of The Rooter Guy, was also sentenced to
three years of probation. Broyles and his corporation were also ordered to pay a $17,000 fine and $4,000 in
restitution to the city of Hayden, and to perform 100 hours of community service. Guilty pleas were entered
on November 18, 2015.
According to the plea agreements, between March 17, 2014, and May 16, 2014, the defendants
violated the Clean Water Act by pumping septic waste into the city of Hayden's municipal sewer system
operated by the Hayden Area Regional Sewer Board. Although The Rooter Guy LLC is licensed to collect
septic waste from commercial and residential customers, it is required to dispose of septic waste at facilities
designed to collect and treat waste in accordance with environmental considerations and EPA
regulation. Hayden's municipal sewer system is not designed to accept and treat septic waste.
The case was investigated by EPA's Criminal Investigation Division with the assistance of the city of
Hayden, the Hayden Area Regional Sewer Board, the FBI, the U.S. Forest Service, U.S. Secret Service, and the
Kootenai County Sheriff's Office.
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Back to Defendant Summary
Page 18
EPA Bulletin—February 2016
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Plea Agreements
Texas Man Guilty of ViolatinR Asbestos Work Practice Standards - On February 9, 2016, RODNEY K.
BESHEARS, of Kennard, Texas, pleaded guilty in federal district court for the Eastern District of Texas to
federal environmental violations, specifically the work practice standards of the Clean Air Act.
According to information presented in court, Beshears admitted that in October of 2011, he and his
employees began excavating and removing a pipeline in northeast Texas. On December 16, 2011, an
inspector with the Texas Department of State Health Services conducted a site inspection where Beshears
was removing the pipeline near Diana, Texas, and informed Beshears that the pipeline had a coating of
asbestos. On December 21, 2011, Beshears received training on asbestos removal practices which included
instructions on the proper handling of asbestos material required under the work practice standards of the
National Emission Standards for Hazardous Air Pollutants or "NESHAP" rules for asbestos when excavating
and removing pipe with a coating of asbestos. On January 13, 2012, the Texas Department of State Health
Services inspected another site where Beshears was excavating and removing the pipeline just outside of Ore
City, Texas, and again informed Beshears that the pipe had a coating of asbestos material.
Beshears' removal of the pipeline continued through March, 2012, during which time, Beshears
removed, and caused others to remove, several thousand feet of
pipeline which contained regulated asbestos containing material,
between Diana and Ore City, Texas. The excavation, cutting and
removal of the pipeline, as directed by Beshears, included no
wetting of the asbestos material that coated the pipeline as
Beshears had been instructed during the training. The asbestos
material was crumbled and pulverized by hitting the pipe coating
with a hammer to knock it off the pipe to expose the pipe so it could
{
be cut into pieces; asbestos was crumbled and pulverized by
dragging the pipe segments across the ground; and asbestos was not
disposed of at approved disposal facilities. Beshears was indicted by
a federal grand jury on September 3, 2014.
Under federal statutes, Beshears faces up to five years in
I federal prison at sentencing. The maximum statutory sentence is
prescribed by congress and is provided for informational purposes, as
the sentencing of the defendant will be determined by the court
: based on the advisory sentencing guidelines and other statutory
I factors. A sentencing hearing will be scheduled after the completion
of a presentence investigation by the U.S. Probation Office.
The case was investigated by the EPA's Criminal Investigation
Asbestos Coated Pipeline
Division in Dallas, Texas, the TCEQ's Criminal Investigation Division, and the Texas Department of Parks and
Wildlife. It was prosecuted by Assistant U.S. Attorney Jim Noble.
Back to Defendant Summary
Page 19
EPA Bulletin—February 2016
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Indictments/Information!
Ohio Environmental Services Company and Two of Its ManaRers Indicted -- On January 7, 2016,
ENVIRONMENTAL ENTERPRISES INC., an environmental services company and two of its managers were
indicted by a Hamilton County Ohio grand jury in connection with a fire that resulted in the death of an
employee. The indictment charges Environmental Enterprises Inc. with nine counts, including involuntary
manslaughter, reckless homicide, tampering with records, tampering with evidence, and violating the terms
of a solid waste license. The charges stem from a December 28, 2012, fire at the company's Spring Grove
Avenue facility that led to the death of a 20-year-old employee, Zachary Henzerling, who was treating
hazardous waste at the facility and was burned when the fire ignited.
Henzerling's supervisor, KYLE M. DUFFENS, was indicted on one count of involuntary manslaughter,
one count of reckless homicide, and three counts of violating the terms of a solid waste license, including
Failure to take proper precautions to prevent a fire or explosion.
GERALD E. NOCKS, a company manager, was indicted on
one count of violating a solid waste license for failing to properly
train employees, one count of tampering with records, and two
counts of tampering with evidence. Nocks is accused of falsifying
training records to make it appear that employees had received
Training they had not been given.
The case was investigated jointly by EPA's Criminal
Investigations Division, the Ohio Bureau of Criminal Investigation,
Environmental Enforcement Unit; and the Ohio Environmental
Protection Agency's Special Investigations Unit; all of which are
members of the Southwest Ohio Environmental Crimes Task
Force. The case is being prosecuted by an attorney with Ohio
Attorney General Mike DeWine's Special Prosecutions Section who was appointed by Hamilton County
Prosecutor Joe Deters to serve as a special prosecutor in the case.
The fire at the company's
Spring Grove Avenue facility
led to the death of a 20-year-
old employee, Zachary Hen-
zerling, who was treating
hazardous waste at the facili-
ty and was burned when the
fire ignited.
Back to Defendant Summary
Page 20
EPA Bulletin—February 2016
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