June 30, 2004

The magic pipe and the golden whistle

Yesterday in Tacoma, Wash., U.S. District Court Judge Ronald B. Leighton sentenced Norway's Hoegh Fleet Services A/S to pay a fine of $3.5 million for seven felony charges relating to the falsification of records concealing the intentional dumping of waste oil into the ocean. And an unnamed crew member was granted a $300,000 "whistleblower" award.

Previously, on September 25, 2003, Vincent Genovana, an engineering officer on the marine vessel Hoegh Minerva, a vessel managed by Hoegh Fleet Services A/S, pleaded guilty to falsifying documents and covering up evidence in order to obstruct or influence a United States Coast Guard investigation.

In addition to the fine, Judge Leighton ordered the company to develop and implement a comprehensive environmental compliance plan for its fleet of thirty-eight vessels that call on United States ports, and serve four years on probation. A significant part of the criminal fine, $1.6 million, will be used to fund environmental projects that benefit, preserve and restore ecosystems adjoining the coastlines of Washington and California.

The United States Attorneys for Western Washington, Northern and Central Districts of California applauded the courageous actions of a crew member aboard the M/V Hegh Minerva who blew the whistle on the ship's illegal pollution activities, leading to the discovery of the bypass pipe by state and federal inspectors. Judge Leighton granted the United States' request that the crew member receive a $300,000 whistleblower award.

A press release from the U.S. Attorneys notes that ships such as the Hoegh Minerva generate waste oil from a variety of sources, including from the purifying of heavy fuel oil used to power the ship. Like other ships of its size, the Hoegh Minerva possessed equipment to properly handle its waste oil, including an "oil water separator" to process oily water that collects in the lowermost compartments of the ship. Federal and international laws require that oily water be processed through the oily water separator so that any water discharged into the sea contains less than fifteen (15) parts per million of oil. Under U.S. law, ships like the M/V Hoegh Minerva that enter U.S. waters must maintain an "Oil Record Book" to document all transfers of oil on the ship, including discharges to the sea.

According to the plea agreement and other court records: Second Engineer Vincent Genovana directed another crew member to fabricate a bypass pipe that was fitted into the existing vessel piping system for the oil water separator to allow crew members to pump inadequately treated oil contaminated waste water directly overboard into the ocean. Crew members referred to the pipe as the "magic pipe." The magic pipe was initially installed in June 2003 while the vessel sailed between Canada and Asia. It remained installed for several days at a time, allowing crew members to bypass the ship's pollution prevention equipment. None of the discharges were recorded in the Oil Record Book as required by international and U.S. law. Instead, crew members knowingly made false and fraudulent entries and omissions in the Oil Record Book in an effort to conceal the illegal discharges from United States Coast Guard inspectors.

The magic pipe was removed several days before the Hoegh Minerva arrived at the Port of Los Angeles, California on September 2, 2003. Following its removal, crew members painted the fittings where the magic pipe had been installed in an effort to conceal the prior use of the fittings. U.S. Coast Guard officials boarded the vessel at the Port of Los Angeles and, several days later, in Richmond, California. At both ports, ships officers failed to inform Coast Guard officials of the illegal dumping. Moreover, in Richmond, crew members presented Coast Guard inspectors with the falsified Oil Record Book. On September 11, 2003, the falsified Oil Record Book was again presented to U.S. Coast Guard inspectors at the Port of Vancouver, Washington. The illegal dumping onboard the ship came to light after a whistle-blower on board the ship secretly passed a note to Coast Guard inspectors describing the illegal activity. An investigation in Vancouver prompted by the whistle-blower note led to the discovery of the magic pipe.

Genovana agreed to cooperate with the government in its investigation of Hoegh Fleet Services A/S. As a result of his cooperation, on February 27, 2004, Genovana was sentenced in U.S. District Court in Tacoma to a 30 day term in custody, followed by two years of supervised release.

This prosecution is the latest in a series of recent federal criminal prosecutions along the West Coast in which shipping corporations and ships' engineers have been convicted and sentenced for similar criminal behavior. United States Attorneys John McKay, Kevin Ryan, and Debra Yang emphasized that the multi-district prosecution of Hoegh Fleet Services A/S is a clear indication of the Department of Justice's resolve to work cooperatively with state and federal agencies to stop these practices and require vessel operators to develop comprehensive compliance programs to prevent future discharges.

This matter was investigated by the Criminal Investigation Division of the United States Environmental Protection Agency and Coast Guard Marine Safety Office, with assistance from the Coast Guard Investigative Service and State of Washington Department of Ecology. The case was prosecuted in the Western District of Washington by Assistant United States Attorney Mark Chutkow and Special Assistant United States Attorneys Larry Kennedy and James Oesterle.

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