Three crew member whistleblowers get $67,000 each

NOVEMBER 2, 2012 — Three crew member whistleblowers will collect $67,000 each in a "magic pipe" case that saw two German shipping companies plead guilty today in federal court in Houston to criminal charges that they concealed the illegal dumping of oil at sea from U.S. Coast Guard inspectors.

Nimmrich & Prahm Bereederung and Nimmrich & Prahm Reederei, the operator and owner of the commercial cargo vessel M/V Susan K, will pay a $1.2 million dollar criminal penalty, $200,000 of which will go to the National Marine Sanctuaries Fund as a community service payment for projects aimed at preserving and restoring the Flower Garden Banks National Marine Sanctuary located off the Texas coast. As a condition of probation, all vessels owned or operated by the defendants will be prohibited from entering U.S. ports or waters for five years.

Federal and international law requires that cargo vessels like the M/V Susan K dispose of oily bilge waste water by using an oil water separator (OWS) or disposing of the waste water at shore facilities. The law also requires that the crew record the disposal of oily waste water in an oil record book that is presented to the Coast Guard during a port inspection.

According to the plea agreement, the chief engineer and other crew members on board the vessel repeatedly discharged oily bilge waste water from the vessel into the ocean from before Aug. 1, 2011, to March 4, 2012, by using a hose that bypassed the vessel's OWS. The chief engineer then falsified the vessel's oil record book to conceal the dumping from Coast Guard inspectors when the vessel entered the U.S. ports in Alaska on Jan. 24, 2012, and then in Houston on March 4, 2012.

"Illegal discharges of oil at sea by commercial shippers is an all too common practice, and today's sentence shows that there are serious consequences for it," said Ignacia S. Moreno, Assistant Attorney General of the Justice Department's Environment and Natural Resources Division. "The defendants will pay a significant penalty and be barred from U.S. waters for deliberately concealing from U.S. authorities their illegal dumping of oil from Alaska to the coast of Texas while at sea. Vessel companies that deliberately violate the laws enacted to protect the oceans will be pursued and prosecuted."

"The outcomes of these cases demonstrate the commitment of the U.S. Coast Guard and the Department of Justice to protecting our marine environment," said Rear Admiral Roy A. Nash, Eighth Coast Guard District Commander. "We continue to ensure that companies and individuals who break the law and endanger our natural resources are held accountable."

The community service payment to the National Marine Sanctuary Foundation will be used to conduct critical monitoring, research and restoration projects in and around Flower Garden Banks National Marine Sanctuary in the Gulf of Mexico. These projects will include coral reef surveys, especially to collect data on coral spawning events and coral resilience. They will also include species monitoring projects, such as acoustic tagging of sensitive, threatened and endangered marine species including manta rays and tiger sharks, as well as commercially important species such as red snapper.

According to court documents, the Coast Guard boarded the vessel in Houston on April 6, 2012, after receiving a tip from a lower level crew member about the illegal dumping of oil and found the hose used to dump the oily waste overboard. During the inspection, the chief engineer lied to the Coast Guard about the hose and the oil dumping and instructed a crew member to lie to the Coast Guard about the use of the hose.

The three whistle blowers on the vessel who assisted in the criminal investigation were each awarded $67,000 by the court.

Overall, the companies pleaded to two obstruction of justice charges and one violation of the Act to Prevent Pollution from Ships for the violations in the District of Alaska and Southern District of Texas; the single obstruction of justice charge in Alaska was transferred procedurally to Houston. On Sept. 10, 2012, the chief engineer of the vessel pleaded guilty to one criminal charge in Texas and was fined $1,000 and sentenced to one year probation.

This case is being investigated by the U.S. Coast Guard Investigative Service. It is being prosecuted by David P. Kehoe, Senior Trial Attorney, Environmental Crimes Section of the Justice Department's Environment and Natural Resources Division, Gary Cobe, Assistant U.S. Attorney for the Southern District of Texas, and Kevin Feldis, Assistant U.S. Attorney, District of Alaska.