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July 28, 2009

$2 million fine in magic pipe case

A "magic pipe" case has cost a Spanish company a fine of more than $2 million--plus three years probation. This follows the earlier imposition of prison sentences on two individuals who had served as chief engineer of the vessel involved.

Consultores de Navegacion, a Spanish company that operates the M/T Nautilus, an ocean-going chemical tanker ship, was yesterday sentenced by U.S. District Judge Douglas P. Woodlock to pay a fine of more than $2 million and serve three years of probation for criminal violations related to the overboard discharge of oil-contaminated bilge waste on the high seas.

The company pleaded guilty on April 6, 2009, to conspiracy, falsification of records, obstruction, and two violations of the Act to Prevent Pollution from Ships for failing to maintain an accurate oil record book. The practice of improperly handling and disposing of oil-contaminated waste from the tanker took place from at least June 2007 until March 2008. Along with the $2.08 million fine, the court ordered the company to implement comprehensive environmental compliance plan to prevent future violations.

According to the government, between June 2007 and March 2008, senior engineers on the M/T Nautilus directed subordinate engine room crew members to use a metal pipe to bypass the ship's oil water separator and instead to discharge oil-contaminated waste directly overboard. On two occasions in August 2007, Vadym Tumakov, a Ukranian who at that time served as chief engineer of the M/T Nautilus, directed the discharge of pollution overboard. In addition, in February 2008, Carmelo Oria, a Spanish citizen who served as chief engineer at that time, directed a discharge directly overboard from the ship's bilge wells.

Oria, who was the chief engineer on the M/T Nautilus between January and March 2008 pleaded guilty to maintaining an oil record book that concealed the improper discharge of untreated waste directly from the ship's bilges and was sentenced on May 6, 2009 to serve one month in prison. Vadym Tumakov, who was the chief engineer on the M/T Nautilus in August 2007 pleaded guilty to using falsified records that concealed improper discharges of oil-contaminated bilge waste from the ship and was sentenced on April 13, 2009 to serve one week in prison and a fine of $2,000.

The government's investigation began in March 2008, when inspectors from the U.S. Coast Guard conducted an examination of the M/T Nautilus, following the ship's arrival in St. Croix, U.S. Virgin Islands, and subsequently in the Port of Boston. The inspections uncovered evidence that crewmembers aboard the ship had improperly handled and disposed of the ship's oil-contaminated bilge water and falsified entries in the ship's official oil record book to conceal these activities.

"Today's criminal fine is another warning to corporate entities and crewmembers that deliberately bypassing required environmental controls and pumping untreated bilge water directly into the ocean is illegal and violators will be punished," said John C. Cruden, Acting Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. "As long as individuals and maritime companies ignore this nation's environmental laws, the Justice Department will continue to bring cases and seek justice for those involved."

"Today's sentence should send a strong message to anyone in the maritime community who might consider circumventing our nation's anti-pollution laws. Violating our nation's environmental laws can actually cost more than legally disposing of the waste," said Acting U.S. Attorney Michael K. Loucks, for the District of Massachusetts.

"The Coast Guard remains committed to working with the maritime industry and federal, state and local law enforcement partners to protect the environmental resources of our nation," said Rear Admiral Joseph Nimmich, Commander of the First Coast Guard District in Boston. "Holding violators of the law responsible is critical to our enforcement effort. This case is a victory for the country and the environment."

The case was investigated by the U.S. Coast Guard, Coast Guard Investigative Service. It was prosecuted by Assistant U.S. Attorney Linda M. Ricci of the U.S. Attorney's Economic Crimes Unit, Trial Attorney Todd Mikolop of the Justice Department's Environmental Crimes Section, and Special Assistant U.S. Attorney Christopher Jones of the U.S. Coast Guard First District Legal Office.


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