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 on our publications page. Unless otherwise noted, ali photos are provided
by EPA-CID.
December 2018 — February 2019
Plea Agreements
Sentencings
Defendant Summary
Trials & Settlements
Indictments/
Informations
In This Edition:
Robert Carville—Region 2
Fuel Bio One LLC—Region 2
Jose Rivera (Terminix) - Region 2
Timothy Peer—Region 3
David Klepadlo, David D. Klepadlo and Assoc, Inc.—Region 3
Pittsburgh Water and Sewer Authority—Region 3
Mike Blankenship—Region 3
IAV GmbH (Volkswagen)—Region 5
Kenneth R. Morrison—Region 5
Gary Alfred Sayers, Electro-Plating Services Inc—Region 5
Mark Harris—Region 5
Richard Bauder, Axel Eiser, Stefan Knirsh, Carsten Nagel (Audi) -
Region 5
Tier Environmental LLC—Region 5
Amin M. Salem, Mohamed Salem, Zaharan al-Qadan—Region 5
Steven Weaver—Region 7
Ahmed El-Sherif—Region 7
James Phillip Lucero—Region 9
&EPA
United States
Environmental Protection
Agency
EPA Pub. 310-N-15-G07
-------
Defendant Summary
Region
Defendants
Case Type/Status
2
Robert Carville
Plea Agreement
2
Fuel Bio One LLC
Sentencing
2
Jose Rivera (Terminix)
Sentencing
3
Timothy Peer
Indictment
3
David Klepadlo
David D. Klepadlo and Assoc, Inc.
Plea Agreement
3
Pittsburgh Water and Sewer Authority
Indictment
3
Mike Blankenship
Sentencing
5
IAV GmbH (Volkswagen)
Plea Agreement
5
Kenneth R. Morrison
Plea Agreement
5
Gary Alfred Sayers
Electro-Plating Services Inc.
Plea Agreement
5
Mark Harris
Plea Agreement
5
Richard Bauder
Axel Eiser
Stefan Knirsh
Carsten Nagel
(Audi)
Indictment
5
Tier Environmental LLC
Plea Agreement
© * ®
Page 2
EPA Bulletin: Dec2018-Feb2019
-------
Defendant Summary
Region
Defendants
Case Type/Status
5
Amin M. Salem
Mohamed Salem
Zaharan al-Qadan
Indictment
7
Steven Weaver
Sentencing
7
Ahmed El-Sherif
Sentencing
9
James Phillip Lucero
Sentencing
© * ®
Page 3 EPA Bulletin: Dec2018-Feb2019
-------
Sentencings
Biodiesel Fuel Company Sentenced for Releasing More Than 45,000 Gallons of Wastewater
into Arthur Kill
An Elizabeth, New Jersey, biodiesel fuel company was sentenced on February 7, 2019 for discharging more
than 45,000 gallons of wastewater from its commercial biodiesel fuel production facility into the Arthur Kill,
a narrow waterway that separates New Jersey from Staten Island, New York, U.S Attorney Craig Carpenito
announced.
Fuel Bio One LLC was sentenced to pay a criminal
fine of $100,000. The company was also sen-
tenced to probation for a period of five years,
during which the company must: provide biannu-
al reports to the Court and the Government doc-
umenting its waste generation, handling and dis-
posal practices; develop, implement, and fund an
employee training program to ensure that all em-
ployees are aware of proper waste handling and
disposal practices and to ensure that all storage,
treatment and disposal of wastewater complies
with the Clean Water Act; and allow U.S. Environ-
mental Protection Agency full access to all offic-
es, warehouses and facilities owned or operated
by the company.
Fuel Bio One LLC previously pleaded guilty before U.S. Magistrate Judge James B. Clark 3rd to an information
charging it with one count of violating the Clean Water Act, a statute that was enacted to prevent, reduce,
and eliminate water pollution in the United States.
"Protecting the environment and our natural resources is one of the many ways this office works to keep
New Jersey safe for everyone," U.S. Attorney Carpenito said. "The sentence imposed today as a result of
Fuel Bio One's previous guilty plea ensures that the company will be punished for its past crimes, and the
plea agreement puts in place a plan to ensure they don't pollute our waterways in the future."
According to court documents filed in this case and statements made in court:
Fuel Bio One generated wastewater that included methanol, biodiesel and other contaminants, as a byprod-
uct of its biodiesel fuel production at its Elizabeth, New Jersey, plant. On Sept. 6, 2013, and Nov. 9, 2013,
employees of Fuel Bio One released approximately 45,000 gallons of wastewater into a storm water pit at
the Elizabeth plant, causing the pump to operate and, as a result, wastewater to be discharged into the Ar-
thur Kill. A representative of Fuel Bio One admitted to this conduct in court.
This case was investigated by EPA's Criminal Investigation Division and prosecuted by a DOJ litigation team.
© # ®
Page 4
EPA Bulletin: Dec2018-Feb2019
-------
Sentencings
Terminix Branch Manager Sentenced for Illegally Applying Restricted-Use Pesticide to
Multiple Residence in the U.S. Virgin Islands
Jose Rivera, former Branch Manager of Terminix International USVI LLC, was sentenced on Jan, 17, 2019, to
12 months in prison for illegally applying fumigants containing methyl bromide in multiple residential loca-
tions in the U.S. Virgin Islands. Two of the applications were at the Sirenusa condominium resort complex on
St. John where a family of four fell seriously ill in March 2015, after the unit below them was fumigated. In
September 2018, Rivera pleaded guilty to four of the counts charged in an indictment charging violations of
the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) for application of a restricted-use pesticide in a
manner inconsistent with its label.
According to the plea agreement, Rivera was certified as a pesticide applicator by the Virgin Islands Depart-
ment of Planning and Natural Resources and received pesticide applicator training from the University of the
Virgin Islands. Based on his training, Rivera knew that he was required to read the pesticide label and follow
all instructions when using any pesticide. In short, the defendant was instructed that federal law requires
applicators to follow the pesticide use
instructions on the label. The label on
methyl bromide states that its use is
restricted to the location and manner
on the label, and the label does not
authorize application of methyl bro-
mide in a residential unit. Rivera ap-
plied methyl bromide, a registered re-
stricted-use pesticide, in a manner in-
consistent with the use instructions on
the label at the residences named in
the counts of conviction.
In November 2017, the companies Terminix LP and Terminix, USVI, Rivera's employer, were sentenced for
violations of FIFRA, based on their earlier guilty pleas. Terminix USVI, was sentenced to pay $4.6 million in
fines and $1.2 million in restitution to the EPA for response and clean-up costs at the St. John resort. Terminix
International Company LP was sentenced to pay a fine of $4.6 million and will perform community service
related to training commercial pesticide applicators in fumigation practices and a separate health services
training program.
In 1.984, the EPA banned the indoor use of methyl bromide products. The few remaining uses are severely
restricted and largely limited to commodity applications for quarantine and pre-shipment purposes. Pesti-
cides containing methyl bromide in the U.S. are restricted-use due to their acute toxicity, meaning that they
may only be applied by a certified applicator. Health effects of acute exposure to methyl bromide are serious
and include central nervous system and respiratory system damage. Pesticides can be very toxic and it is criti-
cally important that they be used only as approved by EPA.
The case was investigated by EPA's Criminal Investigation Division working cooperatively with the Virgins Is-
lands government and, the Agency for Toxic Substances and Disease Registry. The case was prosecuted by a
joint DOJ/EPA litigation team.
© # ®
Page 5
EPA Bulletin: Dec2018-Feb2019
-------
Sentencings
Hanover Man Sentenced to 15 Months of Incarceration for Dumping Truckloads of Sewage
into West Virginia Stream
Mike Blankenship of Hanover, West Virginia, was sentenced to 15 months in prison for Clean Water Act vio-
lations on January 16, 2019. A federal jury convicted Blankenship of two felony Clean Water Act violations in
April 2018. United States Attorney Mike Stuart praised the work of the Environmental Protection Agency
(EPA) and the West Virginia Department of Environmental Protection (WVDEP), who were also assisted by
the Federal Bureau of Investigation (FBI) and the West Virginia State Police.
"No one wants crap in their creek but that's exactly what they got
in this case," said United States Attorney Mike Stuart. "Clean water
and public sewage - especially in West Virginia- is still much too
hard to come by in some of our more rural communities. Blanken-
ship operated his business with total disregard of environmental
laws putting raw sewage in the very water sources our good peo-
ple depend on."
On September 29, 2015, a sewage truck owned by Blankenship
was seen dumping untreated sewage into Little Huff Creek, a tribu-
tary of the Guyandotte River in Southwestern West Virginia. Inspectors with the West Virginia Department
of Environmental Protection (WVDEP) responded to the truck's location in Hanover, West Virginia. They saw
the sewage truck with a hose placed in the creek, observed sewage in the water and on the ground, and
quickly requested the assistance of the West Virginia State Police. Returning to the truck, WVDEP agents
were able to take samples from the truck and pad. Lab tests confirmed the presence of fecal coliform, an
indicator of raw or untreated sewage. Later, agents with the FBI, EPA, and WVDEP spoke to Mike Blanken-
ship. Blankenship owns a porta-jo hn and sewage business under the name Hanover Contracting Compa-
ny. Blankenship admitted that it was his sewage truck dumping sewage into the water on the day the
WVDEP inspectors observed it. Blankenship also admitted to dumping sewage into Little Huff Creek on oth-
er occasions. Neighbors provided photographic evidence that they testified showed Blankenship's trucks
dumping sewage and porta-john waste into the creek on various dates in 2015 and 2016. The April 2018
federal jury also heard testimony from the law enforcement agents and experts in water quality assessment.
The case was investigated by EPA's Criminal Investigation Division and prosecuted by a DOJ litigation team.
© # ®
Page 6
EPA Bulletin: Dec2018-Feb2019
-------
Sentencings
Contractor Who Put His Workers at Risk of Asbestos Exposure Sentenced in Federal Court:
Algona Man Who Was Also a Housing Inspector Failed to Thoroughly Inspect for Asbestos
Before Beginning a Renovation
Art experienced Algona contractor who purchased and renovated the former Kossuth County Home without
thoroughly inspecting for asbestos was sentenced February 13, 2019, to two years of probation.
Steven A, Weaver, age 61, from Algona, Iowa, received his sentence after an October 11, 2018 guilty plea to
one count of violating clean air work practice standards.
In a plea agreement, Weaver admitted he was an experienced contractor and building inspector who had
worked for various Iowa municipalities since the early 2000s. During this time, Weaver performed work for
the municipalities that was financed by the United States Department of Housing and Urban Development
through the Iowa Finance Authority. Weaver was responsible for conducting initial inspections of residential
properties to determine whether it was cost-effective to rehabilitate each home. In conjunction with this
work, Weaver gained experience working with lead and asbestos.
In November 2013, Weaver purchased the former Kossuth
County Home in the Algona area. Weaver intended to convert
the building into apartments to be known as "The Oa-
sis." Weaver hired workers to renovate the building. None of
these workers were licensed to remove asbestos. Prior to be-
ginning the renovation, Weaver failed to thoroughly inspect
the building for asbestos to determine whether it was subject
to regulation.
In November 2014, EPA agents searched Weaver's property
and determined piping in the basement contained regulated
asbestos. Weaver's workers had already removed the pip-
ing. An EPA agent asked Weaver whether he had notified the Iowa Department of Natural Resources
("IDNR") before the renovation and, when Weaver indicated he had not, the EPA agent instructed Weaver to
report to IDNR. However, Weaver did not notify IDNR. instead, Weaver continued the renovation operation
in late 2014 without properly notifying IDNR.
Weaver was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Chief
Judge Strand indicated the offense was "aggravating" because Weaver had cut corners on his own renovation
project and potentially put his workers at risk of asbestos exposure. Weaver was sentenced to two years of
probation, fined $10,000, and ordered to pay costs of prosecution in the amount of $1,573.35.
The case was Investigated by EPA's Criminal Investigation Division and prosecuted by a DOJ litigation team.
© m
Page 7
EPA Bulletin: Dec2018-Feb2019
-------
Sentencings
Lab Owner Ordered to Pay $544,000 For Environmental Violation
On January 30, 2019, the owner of the now-closed Beta Chem Laboratory in Lenexa, Kansas was ordered to
pay $544,287 in restitution for storing hazardous waste without a license.
Ahmed El-Sherif, of Leawood, Kansas was found guilty in a bench trial of storing hazardous waste without a
license. El-Sherif started Beta Chem in the mid-1990s, which he owned and operated. On October 4, 2013,
after issuing an Emergency Order to Seize and Secure Radioactive Materials, KDHE took control of Beta Chem
and secured the facility.
EPA agents executed a search warrant at Beta Chem on Jan.
22, 2.014, where they discovered numerous containers of
hazardous wastes contaminated with radiation.
During trial, U.S. District Court Judge Julie A. Robinson found
that by 2012 Beta Chem had become a defunct operation
and hazardous chemicals were being stored at the facility in
lieu of a thorough decommissioning and decontamination
process.
El-Sherif was found not guilty on a charge of obstructing a
federal investigation, and will serve two years on federal
probation.
The case was investigated by EPA's Criminal Investigation Division and prosecuted by a DOJ litigation team.
© # ®
Page
EPA Bulletin: Dec2018-Feb2019
-------
Sentencings
South Bay Resident Sentenced To 30 Months in Prison For Illegal Dumping In Wetlands And
Other Protected Waters
James Philip Lucero was sentenced on February 25, 2019 to 30 months in prison for the unpermitted dis-
charge of pollutants into waters of the United States, including wetlands, announced United States Attorney
David L. Anderson, Environmental Protection Agency (EPA) Special Agent in Charge Jay M. Green, Federal Bu-
reau of Investigation Special Agent in Charge John F. Bennett, and United States Corps of Engineers Deputy
San Francisco District Counsel Jesse L. Anderson. The sentence was handed down by the Honorable Hay-
wood S. Gilliam, United States District Judge.
On February 21, 2018, a federal jury convicted Lucero, 59, of Carmel, Calif., of violating the Federal Clean Wa-
ter Act. The evidence at trial demonstrated Lucero, a self-described "dirt broker," orchestrated the illegal
discharge of pollutants into waters of the United States adjacent to Mowry Slough, part of the Don Edwards
San Francisco Bay National Wildlife Refuge located in Newark, Calif. As a dirt broker, Lucero charged a fee to
contractors and trucking companies in exchange for providing open space to dump fill material, including
construction debris. The defendant caused approximately 1800 industrial-sized truckloads of construction
debris and fill material to be dumped on private property containing federally-protected wetland and other
waters of the United States, without applying for or obtaining a permit from the U.S. Army Corps of Engi-
neers or the Environmental Protection Agency, or obtaining permission from the landowner. A federal grand
jury handed down a Superseding Indictment on January 31, 2017, charging Lucero with causing dirt, soil, and
other materials to be discharged from a point source into waters of the United States, including over ten
acres of wetlands and more than an acre of other waters of the United States. Lucero was convicted on all
three counts of unpermitted filling of wetlands and tributaries, in violation of 33 U.S.C. §§ 1311, 1319(c)(2)
(A), and 1344.
"Protecting the long-term health and integrity of San Francisco Bay, including its tributaries, wetlands, con-
necting waters, and associated plant and wildlife, are of the utmost importance to the United States," said
U.S. Attorney Anderson. "Today's sentence should serve as a stern warning to anyone contemplating taking
steps to illegally dump in the waters of the United States."
"The tidal marsh at issue in this case is protected under both the Clean Water Act and Section 10 of the Riv-
ers and Harbors Act of 1899," said Jay M. Green, Special Agent in Charge of EPA's criminal enforcement pro-
gram in California. "Today's sentence demonstrates that EPA and its law enforcement partners will not toler-
ate illegal dumping into waters of the United States."
Before and after photos show impact of
Lucero's actions after orchestrating the
dumping of 1800 truckloads of construction
debris and fill material on private property
containing federally protected wetlands.
© # ®
Page 9
EPA Bulletin: Dec2018-Feb2019
-------
Sentencings
In addition to the prison term, Judge Gilliam ordered Lucero to serve twelve months of supervised release
upon his release. A hearing to determine the amount restitution has been set for May 28, 2019. Judge
Gilliam ordered Lucero to surrender and to begin serving his sentence on April 22, 2019.
The case was investigated by EPA's Criminal Investigation Division, FBI, the Alameda County District Attor-
ney's Office, and the Newark Police Department. The case was prosecuted by a DOJ litigation team.
© ft ®
Page 10
EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
Former Owner of Fulton County Tannery Plant Pleads Guilty to Felony Storage of Hazardous
Waste: Stored Hundreds of Drums of Hazardous Material in the Abandoned Building With-
out a Permit
Robert Carville, age 56, formerly of Johnstown, New York, pled guilty on December 3, 2018 to storing hazard-
ous waste without a permit at the former Carville National Leather Corporation building in Johnstown.
The announcement was made by United States Attorney Grant C.
Jaquith and Tyler Amon, Special Agent in Charge of the U.S. Environ-
mental Protection Agency's Criminal Investigation Division (EPA-CID)
in New York.
Carville National Leather Corporation was a family owned tannery
business that operated in Johnstown from 1976 until it closed for
financial reasons in September 2013. Robert Carville owned and op-
erated Carville National Leather for approximately 10 years leading
up to its closing.
In pleading guilty, Carville admitted that as the owner and manager
of the tannery, he was responsible for the materials inside the tan-
nery when it closed. Carville ultimately moved to another state and
left behind, in the tannery building, hundreds of containers of haz-
ardous chemicals, including some that had labels on them such as
"corrosive," "acidic," and "hazardous." Carville admitted that he did
not have a permit to store hazardous materials at the tannery (or
anywhere else). Carville also admitted that he stored these chemi-
cals illegally for more than 2 years.
Carville will be sentenced on May 20, 2019 by Senior United States
District Judge Frederick J. Scullin, Jr. He faces up to 5 years in prison and a maximum fine of up to $50,000
per day of violation. A defendant's sentence is imposed by a judge based on the particular statute the de-
fendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case was investigated by EPA's Criminal Investigation Division and is being prosecuted by DOJ.
© # ®
Page 11
EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
Clarks Summit Man Pleads Guilty To Violations Of Clean Water Act And Tampering With
Government Witness
David D. Klepadlo of Clarks Summit, Pennsylvania and the company he owns, David D. Klepadlo & Associates,
Inc., pleaded guilty on December 19, 2018 to making false statements in violation of the Clean Water Act and
tampering with a government witness.
According to United States Attorney David J. Freed, Klepadlo was certified by the Commonwealth of Pennsyl-
vania as a waste water treatment plant operator. Klepadlo and his company contracted with local municipal-
ities to operate and manage the municipalities' waste water treatment plants in accordance with regulations
and limitations in permits issued by the Pennsylvania Department of Environmental Protection (PADEP) and
the U.S. Environmental Protections Agency (EPA).
The permits required that the permittee at all times maintain in good working order, and properly operate all
facilities and systems installed and used to achieve compliance with the terms and conditions of the per-
mits. For approximately two years, beginning in May 2012 and continuing through June 2014, Klepadlo and
his company failed to properly operate and maintain the facilities (Greenfield Township Sewer Authority,
Lackawanna County, and the Benton/Nicholson Sewer Authority, both Lackawanna and Wyoming Counties)
and systems of treatment and control, in accordance with terms and conditions of the permits.
The defendant not Klepadlo knowingly failed to take daily and weekly samples and measurements
only violated the required for the purpose of monitoring pollutants discharged into waterways of
Clean Water Act by the United States; knowingly created false test results and falsely reported those
failing to properly operate a results in discharge monitoring reports submitted monthly to the PADEP and the
waste water treatment facili- EPA.
ty, but also created false test
results to mislead state and Klepadlo also admitted to attempting to persuade a government witness to fabri-
federal officials" cate a fa|se explanation for the Clean Water Act violations for the purpose of influ-
SA Jennifer Lynn encing testimony of a witness in an official proceeding involving the testing and
registering requirements of the permits.
Waste water from the Greenfield publicly-owned treatment plan is discharged into a tributary of Dundaff
Creek, which flows into Tunkhannock Creek, which flows into the Susquehanna River. Waste water from the
Benton/Nicholson facility flows into a tributary of South Branch Tunkhannock Creek, which also flows into
the Susquehanna River.
"For personal profit, the Defendant in this case violated the Clean Water Act and tampered with a govern-
ment witness," said U.S. Attorney Freed. "His failure to complete appropriate and necessary testing violated
the trust of our citizens who depend upon public entities to ensure clean, safe drinking water. The one con-
stant uniting the diverse communities of the Middle District of Pennsylvania is the Susquehanna River,
providing us with an abundant natural resource as well as commercial and recreational opportunities. Work-
ing with our partners at EPA Criminal Enforcement, the FBI and the Pennsylvania DEP we are committed to
protecting this important asset and ferreting out violations of the Act."
"The defendant not only violated the Clean Water Act by failing to properly operate a waste water treatment
Page 12 EPA Bulletin: Dec2018-Feb2019
© * ®
-------
Plea Agreements
facility, but also created false test results to mislead state and federal officials," said Special Agent in Charge
Jennifer Lynn of EPA's criminal enforcement program in Pennsylvania. "He then attempted to persuade a
government witness to fabricate a false explanation of the violations. EPA and its law enforcement partners
are committed to the protection of public health and will continue to pursue those who undermine those
efforts."
"At every turn, it seems, David Klepadlo opted to cut corners and tell lies," said Michael T. Harpster, Special
Agent in Charge of the FBI's Philadelphia Division. "After tampering with his water samples, he sought to do
the same with a government witness. The FBI will continue to work with our state and federal partners to
investigate and stamp out such corruption."
The maximum penalty for the Clean Water Act violation is punishable by up to 2 years' imprisonment and a
sliding scale for fines of $5,000 to $25,000 per violation, per day. The maximum penalty under the tampering
with a witness statute is 20 years' imprisonment, and a $250,000 fine. Each crime also carries a term of su-
pervised release following imprisonment.
The case was investigated by EPA's Criminal Investigation, FBI and the Pennsylvania Department of Environ-
mental Protection. The case is being prosecuted by a DOJ litigation team.
© * ®
Page 13 EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
Pennsylvania Company Found Guilty of Hazardous Waste Violations at Cuyahoga County
Facility
Tier Environmental LLC pleaded guilty on January 24, 2019 to a single felony charge of recklessly violating a
hazardous waste permit issued under Chapter 3734 of the Ohio Revised Code. The company operated a haz-
ardous waste transfer, storage and disposal facility in Bedford, Ohio, from 2013 through 2017.
"This company had three times the permitted limit for highly flammable and dangerous hazardous waste,
which is unacceptable," Attorney General Yost said. "This is an example of a bad company that didn't follow
the rules put in place to protect the public and environment."
Regulatory inspections by the Ohio Environmental Protection Agency and a criminal investigation by the
Ohio Bureau of Criminal Investigation and EPA's Criminal Investigation Division found the company exceeded
its permitted storage capacity by more than 130,000 gallons of hazardous waste between March and May of
2015.
Judge Brian J. Corrigan of the Cuyahoga County Common Pleas Court ordered the company to pay restitution
of $20,000 to the Ohio EPA and BCI for investigative costs. The company also must pay a $25,000 fine, with
$15,000 of the amount suspended.
In November, the company's president and vice president pleaded no contest to charges of criminal endan-
gering, a second-degree misdemeanor. The Bedford Municipal Court found them guilty and ordered each to
pay a $500 fine, $3,100 in restitution and complete 40 hours of community service.
© * ®
Page 14 EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
IAV GmbH to Pay $35 Million Criminal Fine in Guilty Plea for Its Role in Volkswagen AG
Emissions Fraud
On December 18, 2018, IAV GmbH (IAV), a German company that engineers and designs automotive systems,
agreed to plead guilty to one criminal felony count and pay a $35 million criminal fine as a result of the com-
pany's role in a long-running scheme for Volkswagen AG (VW) to sell diesel vehicles in the United States by
using a defeat device to cheat on U.S. vehicle emissions tests required by federal law.
Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department's Criminal Division,
U.S. Attorney Matthew J. Schneider of the Eastern District of Michigan, Deputy Assistant Attorney General
Jean E. Williams of the Justice Department's Environment and Natural Resources Division, Assistant Adminis-
trator Susan Bodine of the EPA's Office of Enforcement and Compliance Assurance and Special Agent in
Charge Timothy R. Slater of FBI's Detroit Division made the announcement.
IAV is charged with and has agreed to plead guilty to one count of conspiracy to defraud the United States
and VW's U.S. customers and to violate the Clean Air Act by misleading the EPA and U.S. customers about
whether certain VW- and Audi-branded diesel vehicles complied with U.S. vehicle emissions standards. IAV
and its co-conspirators knew the vehicles did not meet U.S. emissions standards, worked collaboratively to
design, test, and implement cheating software to cheat the U.S. testing process, and IAV was aware the VW
concealed material facts about its cheating from federal and state regulators and U.S. customers. Under the
terms of the plea agreement, which must be accepted by the court, IAV will plead guilty to this crime, will
serve probation for two years, will be under an independent corporate compliance monitor who will oversee
the company for two years, and will fully cooperate in the Justice Department's ongoing investigation and
prosecution of individuals responsible for these crimes. Pursuant to the U.S. Sentencing Guidelines, lAV's
$35 million fine was set according to the company's inability to pay a higher fine amount without jeopardiz-
ing its continued viability.
"Today's guilty plea shows that this scheme to evade automotive emissions tests and cheat the American
public and the U.S. government extended well beyond Volkswagen," said Principal Deputy Assistant Attorney
General Cronan. "Our investigation into emissions cheating is ongoing and we will follow the evidence wher-
ever it leads."
"By helping VW cheat on U.S. emissions tests in violation of the Clean Air Act, IAV put its corporate success
over public health and unfairly disadvantaged its competitors," said Deputy Assistant Attorney General Wil-
liams. "The Department of Justice will continue to work with its law enforcement partners to ensure that
companies like IAV play fair and that all Americans can enjoy the protections of our nation's environmental
laws."
"IAV participated in Volkswagen's deception of American regulators and fraud on American consumers," said
U.S. Attorney Matthew Schneider. "As this guilty plea demonstrates, our office will continue to aggressively
prosecute corporate criminals, even when they work at some of the world's largest, most prominent compa-
nies."
"IAV designed the software that allowed VW to cheat U.S. air emissions standards," said EPA Office of En-
© ft ®
Page 15
EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
forcement and Compliance Assurance Assistant Administrator Susan Bodine. "EPA and its law enforcement
partners will not tolerate actions like this that put profit above public health and environmental protection."
"Americans rightly expect corporations to operate honestly," said FBI Special Agent in Charge Slater. "This
case sends a clear message that the FBI and its partners will hold corporations accountable when they de-
fraud consumers and violate federal laws."
The guilty plea of IAV represents the most recent charges in an ongoing investigation by U.S. criminal authori-
ties into unprecedented emissions cheating by VW. In March 2017, VW pleaded guilty to criminal charges
that it deceived U.S. regulatory agencies, including the EPA and the California Air Resources Board, by in-
stalling defeat devices in diesel vehicles emissions control systems that were designed to cheat emissions
tests. As part of its plea agreement with the Department, VW paid a criminal fine of $2.8 billion and agreed
to an independent corporate compliance monitor for three years. Eight individuals were previously indicted
in connection with this matter, two of whom have pleaded guilty and been sentenced. The other six charged
defendants are believed to reside in Germany.
According to the statement of facts that will be filed with the court in
lAV's case, in 2006, VW engineers began to design a new diesel engine to
meet stricter U.S. emissions standards that would take effect by model
year 2007. This new engine would be the cornerstone of a new project to
sell diesel vehicles in the United States that would be marketed to buyers
as "clean diesel." When the co-conspirators realized that they could not
design a diesel engine that would both meet the stricter standards for
nitrogen oxides (Nox) and attract sufficient customer demand in the U.S.
market, they decided they would use a software function to cheat the
U.S. emissions tests.
VW delegated certain tasks associated with designing its new "Gen 1"
diesel engine to IAV, including parts of software development, diesel development and exhaust after-
treatment. In November 2006, a VW employee requested that an IAV employee assist in the design of defeat
device software for use in the diesel engine. The IAV employee agreed to do so and prepared documentation
for a software design change to recognize whether a vehicle was undergoing standard U.S. emissions testing
on a dynamometer or it was being driven on the road under normal driving conditions. If the software de-
tected that the vehicle was not being tested, the vehicle's emissions control systems were reduced substan-
tially, causing the vehicle to emit substantially higher NOx, sometimes 35 times higher than U.S. standards.
By at least 2008, an IAV manager knew the purpose of the defeat device software, instructed IAV employees
to continue working on the project and directed IAV employees to route VW's requests regarding the defeat
device software through him; the manager was involved in coordinating lAV's continued work on it.
Starting with the first model year (2009) of VW's new "clean diesel" Gen 1 engine, through model year 2014,
IAV and its co-conspirators caused defeat device software to be installed on all of the approximately 335,000
Gen 1 vehicles that VW sold in the United States.
Starting in 2009, IAV
and its co-
conspirators
caused defeat device soft-
ware to be installed on all
of the approximately
335,000 Gen 1 vehicles
that VW sold in the United
States.
© ft ®
Page 16
EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
This case was investigated by the FBI and EPA-Criminal Investigation Division. The prosecution and corporate
investigation are being handled by Trial Attorneys Philip Trout, Mark Cipolletti and Gary Winters of the Crimi-
nal Division's Fraud Section; SeniorTrial Attorney Jennifer Blackwell of the Environment and Natural Re-
sources Division's Environmental Crimes Section; and White Collar Crime Unit Chief John K. Neal of the East-
ern District of Michigan. The Criminal Division's Office of International Affairs also assisted in the case. The
Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
© * ®
Page 17 EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
Michigan Man and His Company Plead Guilty to Illegally Storing Hazardous Waste in Madi-
son Heights, Michigan
Gary Alfred Sayers arid his company, Electro-Piating Services Inc., both pleaded guilty in federal court on Feb-
ruary 14, 2.018 in Detroit, Michigan, to illegally storing hazardous wastes at the company's premises in Madi-
son Heights, Michigan, in knowing violation of the Resource Conservation and Recovery Act, the Department
of Justice and U.S. Environmental Protection Agency (EPA) announced. Under the terms of the plea agree-
ment, Sayers and Electro-Plating Services each pleaded guilty to a felony charge of illegally storing hazardous
waste and will pay the EPA $1,444,510 for its direct costs to clean up the plating facility. The court will decide
any term of incarceration and fine at sentencing.
According to the plea agreement, Sayers — who owns and has been the
President of Electro-Plating Services from the late 1990s — used various
dangerous chemicals in his electroplating business that became hazard-
ous wastes when they no longer fulfilled their industrial purpose. Sayers
almost never sent those wastes away for proper disposal, preferring to
keep them on site indefinitely.
"Sayers's knowing, illegal storage of waste cyanide, highly corrosive
wastes, toxic chromium waste, and reactive wastes posed a significant
danger and threat to nearby communities and the environment. He and
his company continued their illegal and poor handling despite many
years of warnings by environmental regulators, and they are now being
held accountable for their willful refusal to comply with the law," said
Jeffrey Bossert Clark, Assistant Attorney General for the Environment
and Natural Resources Division.
"Illegal storing of hazardous waste is a danger not only to the environment but to communities as well," stat-
ed United States Attorney Matthew Schneider. "The actions by this defendant showed a blatant disregard for
the law. It is our hope that prosecutions such as this one will serve as a deterrent to others who seek to
serve their own interests rather than the safety of the environment."
"Hazardous wastes pose serious risks to the health of entire communities, so it's imperative they be handled
and disposed of safely and legally," said EPA Assistant Administrator for the Office of Enforcement and Com-
pliance Assurance Susan Bodine. "EPA and its law enforcement partners are committed to the protection of
public health and will continue to pursue those who blatantly undermine those efforts."
According to the plea agreement, Sayers knew that such storage was illegal because he also managed the
company's former Detroit facility — where he kept hazardous wastes illegally until 2005 — and because the
Michigan Department of Environmental Quality (MDEQ) repeatedly sent him warnings. In 2005, Sayers was
charged with and pleaded guilty to illegally transporting hazardous wastes. During the ensuing years, MDEQ
attempted to get Sayers and Electro-Plating Services to properly manage the amounts of hazardous wastes
piling up at the Madison Heights location. MDEQ issued numerous Letters of Warning and Violation Notices
to the company regarding its hazardous wastes.
© # ®
Page 18
EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
In 2016, MDEQ identified over 5,000 containers of liquid and solid wastes at the Madison Heights location.
That same year, the City of Madison Heights revoked the company's occupancy permit. In January 2017, EPA
initiated a Superfund removal action, after determining that the nature and threats posed by the stored haz-
ardous waste required a time-critical response. The cleanup was completed in January 2018.
Sentencing is scheduled for May 16, 2019.
The case was investigated by EPA's Criminal Investigation Division and the Michigan Department of Environ-
mental Quality. The case is being prosecuted by a DOJ litigation team.
© * ®
Page 19 EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
Power Plant Owner Pleads Guilty to Failing to Remove 224,000 Square Feet of Asbestos Be-
fore Demolishing Power Plant for Scrap Metal
Mark Harris of Versailles, KY pleaded guilty in U.S. District Court to knowingly failing to remove asbestos in a
South Point, Ohio electric power plant.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Jennifer Lynn, Special Agent
in Charge, Criminal Enforcement Program, United States Environmental Protection Agency (EPA), Laurie A.
Stevenson, Director, Ohio EPA and Ohio Attorney General Dave Yost announced the plea entered into on Jan-
uary 28, 2019 before U.S. District Judge Susan J, Dlott.
Harris was the majority owner and
operator of South Point Biomass Gen-
eration LLC. He acquired the coal
burning electric power plant on Collins
Avenue in South Point to convert it to
a power generating plant that would
use renewable energy. The plant con-
tained seven dormant coal-burning
boilers along with their associated pip-
ing. According to court documents,
Harris commissioned an asbestos sur-
vey on the boiler room in 2008, which
revealed nearly 224,000 square feet of
materials containing asbestos.
1
,1 1 Ik
L \ m,
to
Efti"
Beginning in 2011 through October
2013, Harris and others removed approximately two and a half million pounds of metal from the facility and
sold it as scrap. Harris knew significant portions of the metal removed were covered in asbestos. He directed
others to help him cut through the asbestos labeling on several pipes in order to obtain the scrap metal un-
derneath. The asbestos was stripped from the metal while dry and left on each of the six floors of the power
plant.
Harris pleaded guilty to one count of violating the Clean Air Act. The parties involved have recommended
two days in prison, 58 days of house arrest and 200 hours of community service as a sentence in this case.
Judge Dlott will consider that recommendation at a future sentencing hearing.
"The defendant knew the rules regarding the legal removal of asbestos containing materials, but ignored
them," said Jennifer Lynn, Special Agent in Charge of EPA's criminal enforcement program in Ohio. "In this
way, he threatened not only the environment but the safety of those working at the site and the general
public. This case demonstrates that EPA and its partner agencies will not abide those who try to make money
by breaking the law."
"This man will answer for his misdeeds thanks to a successful collaboration between my office, the Ohio Envi-
ronmental Protection Agency, the U.S. EPA and the U.S. Attorney's Office," Ohio Attorney General Yost said.
© * ®
Page 20
EPA Bulletin: Dec2018-Feb2019
-------
Plea Agreements
"Laws outlining the proper removal of asbestos are in place to protect human health and environment. Peo-
ple who choose to ignore these laws will face criminal consequences."
The case was investigated by EPA's Criminal Investigation Division, and the Ohio Bureau of Criminal Investiga-
tion (BCI). The case is being prosecuted by DOJ.
Contains Asbestos Fibers
Avoid Creating Dust
Cancer and
Umg Disease Hazard
¦
© * ®
Page 21 EPA Bulletin: Dec2018-Feb2019
-------
Trials and Settlements
Whiting Man Convicted After 4-Day Jury Trial
Kenneth R. Morrison of Whiting, Indiana was convicted of interstate transportation of stolen goods on De-
cember 13, 2018 after a 4-day jury trial.
Morrison's sentencing date is scheduled for March 21,
2019,
According to records in the case, between December 2014 and January 2.015, without authority the defend-
ant dismantled the Monon Bridge in Hammond, Indiana,
and transported pieces of the bridge to Burnham, Illinois
where he sold the scrap for $18,000. He also sold parts of
the bridge to a scrap dealer in East Chicago, Indiana. CFX
Railroad gifted the Monon Bridge to the City of Hammond
in 1987. The bridge, built in 1910, spanned the Grand Calu-
met River near Marble Street in Hammond.
This case was investigated by EPA's Criminal Investigation
Division, EPA's Office of Inspector General, and the U.S.
Coast Guard Investigative Services with assistance from the Indiana Department of Natural Resources, Indi-
ana Department of Environmental Management and other members of the Environmental Crimes Task Force
and was prosecuted by a DOJ litigation team.
© * ®
Page 22 EPA Bulletin: Dec2018-Feb2019
-------
Indictments/Information
Westlake man indicted on charges he illegally accepted food stamps at Cleveland-area gas
stations, laundered the profits, illegally had firearms, operated an unregulated slaughter-
house and polluted a stream by dumping animal blood in it
A Westlake man with a history of food stamp fraud was indicted on charges that he continued to illegally ac-
cept food stamps at seven Cleveland-area gas stations, laundered the profits, illegally had firearms, operated
an unregulated slaughterhouse and polluted a stream by dumping animal blood and other fluids into it.
Amin M. Salem, 59, and Mohamed Salem, 32, were both indicted on one count each of conspiracy to launder
money and one count of engaging in real estate transactions using laundered funds.
Amin Salem is additionally charged with one count of making unpermitted discharges into a waterway, one
count of distribution of adulterated, misbranded or uninspected meat and one count of being a felon in pos-
session of firearms. That charge stems from Amin Salem having an AR-15 rifle and a Savage 12-gauge shot-
gun, despite previous convictions for conspiracy to defraud the United States, food stamp fraud, mail fraud,
and money laundering.
Mohamed Salem, also of Westlake and Amin's son, is also charged with trafficking in counterfeit goods for
his sale of counterfeit clothing and apparel.
Zahran al-Qadan, 55, of Cleveland, was indicted on one count of conspiracy to launder money.
Prosecutors are seeking to forfeit properties at 43588 Stang Road and 7250 West Ridge Road in Elyria owned
by the Salems.
According to the six-count indictment:
Amin Salem secretly owned several area gas stations: Henry's Marathon at 3106 Fulton Road; Gas Way at
10606 Bellaire Road; Turney Sunoco at 6009 Turney Road in Garfield Heights; Harvard Gas USA at 7020 Har-
vard Ave.; Bellaire Gas USA at 3934 West 117th Street; Rapid Stop at 1712 East 55th Street and Memphis
Shell at 7210 Memphis Ave.
Mohamed Salem managed the gas station's finances of behalf of his father. The gas stations had terminals to
accept and process Electronic Benefits Transaction (EBT) cards as part of the Supplemental Nutrition Assis-
tance Program (SNAP), formerly known as food stamps.
The gas stations and the EBT terminals inside were in the names of Mohamed Salem or another person,
since Amin Salem was prohibited from owning stores that processed EBT transactions because of previous
convictions for food stamp fraud and related crimes.
The gas station terminals were used by the Salems to process more than $2.7 million in fraudulent SNAP
transactions between 2010 and 2016.
Amin Salem slaughtered lambs and goats at his property on Stang Road in 2015 and 2016. He sold the meat,
which was not inspected by the U.S. Department of Agriculture. He also caused, without a permit, the dis-
charge of blood and other bodily fluids from the slaughtered animals into Engle Ditch, which flows into the
© ft ®
Page 23
EPA Bulletin: Dec2018-Feb2019
-------
Indictments/Information
Black River and eventually Lake Erie.
Mohamed Salem sold meat illegally slaughtered at Amin Salem's farm. The Salems allowed customers to pay
for the illegally slaughtered meat using SNAP cards, in contravention of SNAP's rules and regulations.
Money from the meat sales and SNAP transactions were deposited into gas station accounts and ultimately
sent to accounts controlled and used by the Salems.
The Salems and al-Qadan owned the Rapid Stop gas station at 1712 East 55th Street in Cleveland. Al-Qadan
also owned and operated Yahala Bakery, a grocery store and bakery in North Olmsted.
Al-Qadan used checks from Yahala Bakery to purchase illegally slaughtered meat, and caused the checks to
be processed through gas station bank accounts so it appeared those transactions were for the purchase of
gasoline. Al-Qadan also paid for the meat using the EBT cards of customers who allowed him to have posses-
sion of their cards and accounts.
The Salems used the funds from these fraudulent transactions to pay for lots at 26800-26900 Brookpark
Road Extension in North Olmsted.
"Amin Salem is accused of engaging in a diverse array of crimes, from food stamp fraud to illegally slaughter-
ing lambs and goats to illegally having an assault rifle and shotgun, just to name a few," U.S. Attorney Justin
Herdman said. "He will now be held accountable for years of disregarding our nation's laws and flouting the
rules to enrich himself."
"This father and son duo engaged in various illegalities to include stealing from every taxpaying citizen by
engaging in food stamp fraud, a program designed to help those in need," said FBI Acting Special Agent in
Charge Robert E. Hughes. "Salem put others at risk by selling unsanitary, unregulated food. The FBI will con-
tinue to work with our federal and local law enforcement partners to ensure fraudsters like these are held
accountable."
"IRS Criminal Investigation is committed to unraveling complex financial transactions and money laundering
schemes where individuals attempt to conceal the true source of their money," stated Ryan Korner, Special
Agent in Charge of IRS-CI Cincinnati Field Office.
"The defendant is alleged to have illegally discharged waste from an animal slaughtering operation into a lo-
cal stream," said Special Agent in Charge Jennifer Lynn of EPA's criminal enforcement program in Ohio. "This
case demonstrates that EPA and its law enforcement partners will pursue those who violate laws designed to
protect the health of our communities and the environment."
If convicted, the defendants' sentences will be determined by the Court after reviewing factors unique to this
case, including the defendant's prior criminal record, the defendant's role in the offense and the characteris-
tics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will
be less than the maximum.
This case was investigated by the FBI, IRS-Criminal Investigations, USDA-OIG, USDA-FSIS, EPA-CID, Ohio Inves-
© ft ®
Page 24
EPA Bulletin: Dec2018-Feb2019
-------
Indictments/Information
tigative Unit, Ohio Department of Taxation, Ohio Department of Agriculture, BCI, Ohio EPA, Lorain County
Sheriff's Office, Guernsey County Sheriff's Department, Cleveland Division of Police, Westlake Police Depart-
ment and Strongsville Police Department.
It is being prosecuted by Assistant U.S. Attorneys Duncan Brown and Brad Beeson.
An indictment is only a charge and is not evidence of guilt. The burden of proof is always on the government
to prove a defendant guilty beyond a reasonable doubt.
© * ®
Page 25 EPA Bulletin: Dec2018-Feb2019
-------
Indictments/Information
Hampshire County Man Indicted for Clean Water Act Violations
Timothy Peer, of Springfield, West Virginia, was indicted on December 7, 2018 by a federal grand jury for vio-
lating permits and discharging untreated sewage from his sewage treatment plant, United States Attorney
Bill Powell announced.
Peer was the owner of Mountainaire Village Utility, LLC, a sewage water treatment plant serving the resi-
dents of Mountainaire Village near Ridgeley, West Virginia. Peer owned and operated this business from ear-
ly 2008 to July 2016. From 2014 to 2016, Peer is accused of failing to maintain the treatment plant, resulting
in untreated and undertreated sewage being discharged into the North Branch of the Potomac River, vio-
lating the Clean Water Act and his permit. Peer is accused of falsely reporting quarterly testing on the
wastewater from the plant, and of continuing to charge customers for the treatment of their sewage despite
the services not being provided.
Peer is charged with one count of Knowing Violation of Permit Conditions, five counts of Knowing Discharges
of Pollutants in Violation of Permit, one count of Knowing Discharge of a Pollutant Without a Permit, six
counts of False Statements on Discharge Monitoring Reports, and one count of Mail Fraud.
"Violating environmental laws often does long term damage to our environment and risks the health of the
people in our communities. Such violations must be prosecuted and those responsible held accountable,"
said Powell.
"EPA's sewage treatment regulations are designed to protect both humans and wildlife," said Special Agent
in Charge Jennifer Lynn of EPA's criminal enforcement program in West Virginia. "EPA will work with its law
enforcement partners to pursue those who falsify data and disregard laws that are critical to protecting clean
water and public health."
Peer faces not more than 3 years; not less than $5,000 (if a fine is imposed) and not more than $50,000 per
day of violation; or $250,000; or twice the amount of gain or loss; for the first count. He faces up to two years
incarceration and a fine of up to $10,000 for each of the discharge counts, and faces up to 20 years incarcera-
tion and a fine of up to $250,000 for the mail fraud count. Under the Federal Sentencing Guidelines, the actu-
al sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any,
of the defendant.
The case was investigated by EPA's Criminal Investigation Division and and the West Virginia Department of
Environment. The case is being prosecuted by DOJ.
An indictment is merely an accusation. Defendants are presumed innocent unless and until proven guilty.
© * ®
Page 26 EPA Bulletin: Dec2018-Feb2019
-------
Indictments/Information
Authority Charged with Failures to Notify Pittsburgh Residents as it Replaced Lead Water
Lines and to Sample Lines After Replacements
Attorney General Josh Shapiro filed 161 criminal charges against the Pittsburgh Water & Sewer Authority on
February 1, 2019 for failing to notify residents when the agency replaced lead water lines - creating health
risks for affected households. The attorney general also charged the Authority with failing to sample water
lines following the replacements within the time frame required under state law.
Attorney General Shapiro charged the Water & Sewer Authority with multiple violations of the Pennsylvania
Safe Drinking Water Act. The charges are third-degree misdemeanors, and the 161 counts correspond to 161
households in Pittsburgh neighborhoods where the Authority failed to notify residents of its water line re-
placements and failed to conduct sampling.
"Pennsylvanians have a constitutional right to clean air and pure water - I'm here to defend that," Attorney
General Shapiro said, at a news conference at a recreation center in Pittsburgh's Lawrenceville neighborhood
- an area impacted by the Authority's violations. "The Water & Sewer Authority knew it was required to noti-
fy residents of its plans to replace service lines, and it knew it was required to sample the lines for lead con-
tent - yet it failed to do so. That makes PWSA criminally liable under the Safe Drinking Water Act."
The problems involving elevated lead levels in Pittsburgh's drinking water - and the Authority's handling of
the problems-are well-known in Pittsburgh.
The water lines installed years ago to deliver water to Pittsburghers were constructed of lead pipe. While
lead pipes last for a long time, they can also leach dangerous amounts of lead into drinking water.
• Children are especially sensitive to lead, which can have adverse health impacts on developing brains and
lead to nervous system damage, learning disabilities and impaired hearing.
• It's also not safe for adults - potentially leading to kidney damage, high blood pressure, and reproductive
issues.
Under Pennsylvania law, if the lead level in a water system exceeds 0.015 mg/L, the water system's operator
is required to take three action steps to address the high concentration.
1. Replace 7 percent of its water lines, until there are 2 consecutive monitoring periods which are at or be-
low the action level.
2. Notify residents using the system at least 45 days prior to doing the line replacements.
Replacing the service lines can cause temporary, and potentially significant, increases in lead levels in res-
idents' drinking water. The notice requirement is to provide residents with information on how to mini-
mize their exposure to lead, including how to flush your faucet, bathtub and shower to get rid of any po-
tential lead, and a recommendation not to consume any tap water during the procedure, and more.
3. Collect samples from the replaced lines to analyze lead content within 72 hours of the new pipes being
installed.
© ft ®
Page 27
EPA Bulletin: Dec2018-Feb2019
-------
Indictments/Information
In 2016, PWSA conducted lead level tests of its system on two separate occasions, and the results each time
showed lead levels in excess of the level allowed under state law.
The Pennsylvania Department of Environmental Protection (DEP) advised PWSA it must begin replacing 7
percent of their service lines to lower the lead levels in drinking water.
PWSA estimated that it needed to replace 1,341 lead lines by June 30, 2017 to meet the 7 percent require-
ment. However on June 30, PWSA reported that it had only replaced 415 service lines.
PWSA also admitted its failure to provide many residents with advance notice of the lines' replacement. And,
PWSA acknowledged it had not collected water samples from those same residences with new pipes within
72 hours of installation.
DEP fined PWSA $2.4 million and entered into a civil consent order and agreement in November 2017. DEP
also referred the matter for criminal investigation to the Office of Attorney General, and the referral was nar-
rowly tailored to review PWSA's failure to notify residents and its failure to sample water after replacement
lines were installed.
The Attorney General's office began a criminal investigation, leading to charges against the Authority for 161
counts of violating the state Safe Drinking Water Act.
The maximum penalty for each count is 1 year in prison and a fine of not less than $1,250 nor more than
$12,500.
Attorney General Shapiro said the charges were being filed against the Authority alone because his agents
found no evidence of any one single person intending harm to any users of the system.
Attorney General Shapiro said he has arranged that whatever fines which PWSA is ultimately required to pay,
the monies will be targeted by DEP to programs in Pittsburgh to protect and enhance the public health.
"This money isn't going to a fund in Harrisburg - it's coming back here to neighborhoods like Lawrenceville
that were affected by these violations," Shapiro said. "I hope that, with these charges, we can shine a light on
these violations and force the necessary reforms to take shape to keep Pittsburgh's drinking water safe."
© ft ®
Page 28
EPA Bulletin: Dec2018-Feb2019
-------
Indictments/Information
Four Audi Managers Charged in Connection with Conspiracy to Cheat U.S. Emissions Tests
Four Audi managers, including a former member of Audi AG's management board, were charged in an indict-
ment filed on Jan. 17, 2019 for their roles in the nearly decade-long conspiracy to defraud U.S. regulators and
U.S. customers by implementing software specifically designed to cheat U.S. emissions tests in tens of thou-
sands of Audi "clean diesel" vehicles, the Justice Department announced.
Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department's Criminal Division,
Deputy Assistant Attorney General Jean Williams of the Justice Department's Environment and Natural Re-
sources Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Assistant Administra-
tor of the Environmental Protection Agency (EPA) Office of Enforcement and Compliance Assurance Susan
Bodine, and Special Agent in Charge Timothy R. Slater of the FBI Detroit Field Office made the announce-
ment.
Richard Bauder, 69, former head of Audi's Diesel Engine Development Department; Axel Eiser, 57, former
head of Audi's Engine Development Division; Stefan Knirsch, 52, former head of Audi's Engine Development
Division and a former member of Audi's Management Board, and Carsten Nagel, 50, former head of Diesel
Certification, were charged in the Eastern District of Michigan with one count of conspiracy to defraud the
United States, to commit wire fraud and to violate the Clean Air Act, along with multiple counts of wire fraud
and multiple counts of making false statements under the Clean Air Act. All four are believed to be citizens of
Germany. These individuals join Giovanni Pamio, 61, an Italian citizen, who was charged via criminal com-
plaint in July 2017 and whose extradition from Germany is being sought by U.S. authorities. Pamio was for-
merly head of Thermodynamics within Audi's Diesel Engine Development Department in Neckarsulm, Germa-
ny.
According to the indictment, from in or about 2006 until in or about November 2015, Pamio led a team of
engineers responsible for designing emissions control systems to meet emissions standards, including for ni-
trogen oxides (NOx), for Audi 3.0 liter diesel vehicles in the United States.
The indictment further alleges, when Bauder, Eiser, Knirsch, Nagel and Pamio realized that it was impossible
to calibrate a diesel engine that would meet NOx emissions standards within the design constraints imposed
by other departments at the company, they directed Audi employees to design and implement a software
function to cheat the standard U.S. emissions tests. The co-conspirators deliberately failed to disclose the
software function, and knowingly misrepresented to U.S. regulators and U.S. customers that the vehicles
complied with U.S. NOx emissions standards, the indictment alleges. Bauder, Eiser, Knirsch, Nagel, and Pamio
also are alleged to have marketed the Audi 3.0 liter vehicles to the U.S. public as "clean diesel," when they
knew that these representations were false.
Audi's parent company, Volkswagen AG (VW), previously pleaded guilty to three felony counts connected to
cheating U.S. emissions standards. VW was sentenced in April 2017, and the company paid a $2.8 billion
criminal penalty.
The case was investigated by the FBI and EPA's Criminal Investigation Division. The case is being prosecuted
by a DOJ litigation team with assistance from the Munich II Prosecutor's Office in Munich, Germany.
© ft ®
Page 29
EPA Bulletin: Dec2018-Feb2019
-------
Indictments/Information
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a
reasonable doubt in a court of law.
© * ®
Page 30 EPA Bulletin: Dec2018-Feb2019
------- |