u.s. environmental protection agency office of criminal enforcement, forensics, & training...
TRANSCRIPT
U.S. Environmental Protection AgencyOffice of Criminal Enforcement,
Forensics, & Training
Jeffrey Denny, Resident Agent in Charge
Indianapolis Resident Office2030 Market Tower10 W. Market Street
Indianapolis, IN 46204(317) 226-1001
Report Suspected Environmental Crimeswww.epa.gov/compliance/complaints/index.html
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime:Choices, Decisions, Consequences & Accountability
• Began as a simple Business Plan to Increase Profitability• Developed the Project• Set the Budget• Assigned Project Responsibilities• Established Landmark Dates• Identified Environmental Compliance Issues
» Notifications» Permits» Applications
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime:
Choices, Decisions, Consequences & Accountability
• Implementation of the Business Plan• Contracted with private entities
• Completed Purchase Agreements
• Completed and Submitted Required Environmental Documents» Permit Applications
» Notifications
•Project Initiation•Budget Shortfall
•Cost Overruns
•Surpassed Landmark Project Dates
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime:
Choices, Decisions, Consequences & Accountability
• ChoicesA. Downsize the scope of the project?
B. Request an increase in the already approved budget?
C. Eliminate certain non-revenue generating aspects of the project?
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime:
Choices, Decisions, Consequences & Accountability
• DecisionC. Eliminate certain non-revenue generating aspects of the project.
• Eliminated the Air Pollution Control Device for Press #3
• Downsized the Air Pollution Control Devices for Press #4
• Evaluated Risk v. Reward
• Determined Reward was greater than the Risk
The Evolution of an Environmental Crime:
Choices, Decisions, Consequences & Accountability
• Consequence #1: Enticed others to go along (aka: Conspiracy)
• Consequence #2: Submitted False Permit Applications• Schematics, Certifications, Documents reflected construction of APC Devices
• Consequence #3: Submitted False VOC Reports• Omitted VOCs from the 2 Newly Installed Presses
• Consequence #4: Board of Directors fired Conspirators
• Consequence #5: Federal Criminal Investigation
• Consequence #6: Federal Charges Filed
U.S. Environmental Protection Agency
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime:
Choices, Decisions, Consequences & Accountability
• Accountability: Defendant 1 enters into a plea agreement• Admission of Criminal Acts
• Agrees to Testify in Grand Jury and Trial
• Consequences: • Convicted of Misprision of a Felony 18 USC 4
• Sentence:» 5 Years Probation
» 6 Months Home Confinement
» 500 Hours Community Service
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime:
Choices, Decisions, Consequences & Accountability
• Accountability: Defendant 2 enters into a plea agreement
• Consequences:•Convicted of False Statements CAA 42 USC 7413(c)(2)(A)
•Sentence:» 18 Months Federal Prison
» $4000 Fine
» 12 Months Supervised Release
» 50 Hours Community Service
•Missed Son’s High School Graduation (incarcerated)
•Filed Bankruptcy
The Evolution of an Environmental Crime:
The Investigation
How did the Government substantiate the allegations?• Enforcement History Records from 3 State Agencies and the U.S. EPA
• Environmental Records and Reports» Minor Source Screening Forms
» Field Inspection Reports
» Applications and Permits
» Requests for Modifications
» Quarterly and Annual Reports
U.S. Environmental Protection Agency
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime: The Investigation
How did the Government substantiate the allegations?• Business Records
» Purchase Agreements, Purchase Orders, Receipts» Contractors’ Records» Consultant’s Records» Employee Time Cards» Press Productivity & Sales Value Reports» Press Emissions Studies» Securities & Exchange Records (Form 10-K)
• Witness Interviews: Employees, Contractors and Consultants• Interviews of Defendant 1
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime: The Investigation
What did we find?• Comparison of Press Studies to Permit Applications: As reflected in
the applications, the operational capacities of the APC devices were insufficient to handle even reduced emissions from the existing and newly installed presses.
• Review of the Project Budget: Defendant 2 did not request from the Board of Directors the acquisition and installation of APC devices – just 2 new presses.
• Comparison of VOC Reports to VOC Usage Records: From July 1997 –December 1997, more than 150 tons of VOCs & HAPs were vented directly to the atmosphere from the 2 newly installed presses.
• Analyses of Press Productivity Reports: From June 1997 – September 1997, labels having a sales value of more than $4 million were generated from the 2 presses.
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime: The Investigation
What did we find?• Comparison of Permit Applications to Contractors’ Records: The
newly installed presses vented directly to the atmosphere – there were no APC devices.
• Analyses of SEC Records: Defendant 2 owned 120,000 shares in the company.
• Witnesses stated: Defendant 2 micro-managed the press construction activities.
• Enforcement Records: From 1985 – 1999, similar activities occurred in three states.
» Defendant 2 implicated in the civil enforcement actions• Defendant 1 stated: Defendant 2 commented “…make more money
than he could be fined…not worried about the EPA.”
U.S. Environmental Protection Agency
The Evolution of an Environmental Crime: The Judge
What did the Judge Say?• Defendant 2’s sentence reflected the seriousness of the offense and
should act as a deterrent to others• Defendant 2’s acts were deliberate fraud to evade the CAA
requirements• Defendant 2’s acts reflected a cool calculation of cost v. benefit• Defendant 2 breached public trust
“…hopes it is a case that winds up gettingpublic attention in the business world.”
- Judge David Hamilton