Largest Environmental Criminal Fine in Massachusetts History
BOSTON, Dec. 19 /PRNewswire/ -- MSC SHIP MANAGEMENT (HONG KONG) LIMITED, a
Hong Kong-based container ship company, has agreed to plead guilty to charges
that it engaged in conspiracy, obstruction of justice, destruction of
evidence, false statements and violated the Act to Prevent Pollution from
Ships, the Department of Justice announced today. Per the terms of a plea
agreement that must be approved by the court, MSC SHIP MANAGEMENT will pay
$10.5 million. This amount would be the largest ever paid in a case involving
deliberate pollution from a single vessel and the largest criminal fine paid
by a defendant in an environmental case in Massachusetts history.
According to the plea agreement, including a Joint Factual Statement, MSC
SHIP MANAGEMENT will plead guilty to a criminal Information that charges that
a specially fitted steel pipe, referred to as the "magic pipe," was used on
the MSC Elena, a 30,971 ton container ship, to circumvent required ship
pollution prevention equipment and discharge oil sludge and oil contaminated
waste directly overboard. Upon discovery of this bypass equipment during a
U.S. Coast Guard inspection in Boston Harbor on May 16, 2005, senior company
officials in Hong Kong directed crewmembers to lie to the Coast Guard.
Additionally, senior ship engineers ordered that documents be destroyed and
concealed.
"This is the largest fine involving deliberate pollution from a single
ship in a long series of similar prosecutions that have been brought as part
of a vessel pollution initiative," said Sue Ellen Wooldridge, the Assistant
Attorney General for Environment and Natural Resources. "Deliberate vessel
pollution is a serious and persistent problem which we will prosecute to the
full extent of the law."
"Residents of Massachusetts and particularly those along the Buzzards Bay
coastline have experienced first hand the devastation to the environment that
can result from accidental oil spills. However, there was nothing accidental
about this case," stated U.S. Attorney for the District of Massachusetts
Michael Sullivan. "The defendant knowingly violated anti-pollution laws,
intentionally dumping oil contaminated waste directly into the ocean -- and
even went so far as to manufacture a so-called 'magic pipe' to accomplish the
crime. Our hope is that this substantial $10 million fine will send a strong
message to those in the maritime community who would try to circumvent our
nation's anti-pollution laws."
MSC SHIP MANAGEMENT discharged approximately 40 tons or approximately
10,640 gallons of sludge during a five-month period in 2004 through a three-
piece bypass pipe manufactured on the ship. An even larger volume of oil-
contaminated bilge waste was also discharged with a rubber hose and portable
pump. The MSC Elena made regular voyages from ports in Europe, across the
Atlantic, to ports in the United States, including Boston.
Under the terms of the plea agreement, MSC SHIP MANAGEMENT has agreed to
plead guilty to charges that it made false statements to the Coast Guard
denying knowledge about the existence and use of the bypass equipment;
obstructed justice by directing subordinates to lie to the Coast Guard;
concealed evidence; and concealed oil pollution in a falsified Oil Record
Book, a required log in which all overboard discharges must be recorded.
MSC SHIP MANAGEMENT has also agreed to plead guilty to charges that in
response to a Coast Guard inspection, senior ship engineers directed that an
"alarm" printout from the ship's computer and a log containing actual tank
volumes be concealed in an effort to cover up the falsification of records.
Coast Guard inspectors were presented with fictitious logs containing false
entries claiming the use of the Oil Water Separator and omitting any reference
to dumping overboard using the bypass equipment.
"The Coast Guard is committed to the protection of the marine environment
in Massachusetts, in New England, and throughout the United States. To
accomplish this goal, the Coast Guard ensures that vessel owners and operators
comply with the law and are truthful with our inspectors," said Rear Admiral
David P. Pekoske, Commander, First Coast Guard District. "This defendant's
crimes, and especially management's direct involvement, undermines our entire
regulatory system for the protection of the environment. This successful
prosecution and the severe penalties associated with it should send a message
that intentional pollution and lying to the Coast Guard will not be
tolerated."
Additionally, under the terms of the plea agreement, MSC SHIP MANAGEMENT
will be on probation for five years during which time it must operate under
the terms of a government-approved Environmental Compliance Plan. The plan
includes review by an independent auditor of any of MSC SHIP MANAGEMENT's 81
ships, including the MSC Elena, that trade in the United States, and a review
of those audits by a court-appointed monitor.
If the plea agreement is approved by the court, $10 million will be paid
as a criminal fine. An additional $500,000 will be paid to support community
service projects and will be administered by the National Fish & Wildlife
Foundation to fund non-profit organizations that provide environmental
education to seafarers visiting or sailing from Massachusetts ports, including
how to report environmental crimes to the U.S. Coast Guard.
Engine room operations on board large ocean-going vessels such as the MSC
Elena generate large amounts of waste oil and oil contaminated bilge waste.
International and U.S. law prohibit the discharge of waste containing more
than 15 parts per million oil and without treatment by an Oil Water Separator
and oil sensing equipment -- a required pollution prevention device. The Act
to Prevent Pollution from Ships also requires that all overboard discharges be
recorded in an Oil Record Book, which is subject to inspection by the Coast
Guard. The waste oil may be incinerated on board the ship or offloaded in port
for proper disposal.
In two related prosecutions, the Chief Engineer of the MSC Elena, Mani
Singh, was indicted in November and has agreed to plead guilty at a hearing
scheduled for December 20, 2005. Aman Mahana, the ship's Second Engineer,
pleaded guilty on December 1, 2005. Sentencings for Singh and Mahana will take
place early next year.
This investigation was conducted by the Northeast Regional Office of the
U.S. Coast Guard Investigative Service with assistance from the U.S. Coast
Guard Sector Boston, U.S. Coast Guard First District Legal Office, U.S. Coast
Guard Office of International and Maritime Law, U.S. Coast Guard Headquarters
Office of Investigations and Analysis, and U.S. Coast Guard Office of
Compliance. The case is being prosecuted by Assistant U.S. Attorney Jonathan
F. Mitchell in U.S. Attorney Michael J. Sullivan's Economic Crimes Unit,
Special Assistant U.S. Attorney Luke M. Reid of the U.S. Coast Guard, and
Senior Trial Attorney Richard A. Udell and Trial Attorney Malinda R. Lawrence
of the U.S. Department of Justice Environmental Crimes Section.
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SOURCE U.S. Attorney
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CONTACT:
Samantha Martin, Press Contact of U.S.
Attorney's Office, +1-617-748-3139
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