COMPANY ARGEES TO SPEND $18 MILLION ON NEW POLLUTION CONTROLS

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY
CountryMark Refining and Logistics, LLC to Install $18 Million in Pollution Controls to Resolve Clean Air Act Violations at Indiana Refinery

WASHINGTON - The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced that Countrymark Refining and Logistics, LLC has agreed to pay a $167,000 civil penalty, perform environmental projects totaling more than $180,000, and spend $18 million on new pollution controls to resolve Clean Air Act (CAA) violations at its refinery, located in Mount Vernon, Ind.

Once fully implemented, the pollution controls required by the settlement will reduce emissions of harmful air pollution that can cause respiratory problems, such as asthma, and are significant contributors to acid rain, smog, and haze, by an estimated 1,000 tons or more per year.

"Under the settlement, CountryMark will implement new practices and install innovative, cutting-edge pollution controls at its Indiana refinery," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "These innovative controls include ensuring that pollution control devices, such as flares, are operated properly to minimize pollution emitted into the air and to improve their overall efficiency."

"This settlement requires CountryMark to install new controls and implement new practices at its refinery to reduce air pollution from all significant sources at the refinery," said Ignacia S. Moreno, assistant attorney general for the Justice Department's Environment and Natural Resources Division. "Notably, CountryMark will be the third refiner to put in place new measures to substantially reduce gas emissions from its flare, and the company’s commitment to retrofit diesel school buses will also reduce air emissions that affect the area’s residents."

The complaint alleges that the company made modifications to its refinery that increased emissions without first obtaining pre-construction permits and installing required pollution control equipment. The CAA requires major sources of air pollution to obtain such permits before making changes that would result in a significant net emissions increase of any pollutant. The complaint also alleges CAA violations related to flare operation, the New Source Performance Standards, and applicable requirements for leak detection and repair (LDAR).

The settlement requires new and upgraded pollution controls, more stringent emission limits, and aggressive LDAR practices to reduce emissions from refinery equipment and processing units. The settlement also requires new controls on the refinery’s flaring devices, which are used to burn-off waste gases. The amount of pollution that flares emit depends on the total amount of waste gases sent to a flare and the efficiency at which the flare is operated when burning those gases. The settlement will ensure proper combustion efficiency for any gases that are sent to a flare and will also cap the total amount of waste gases that can be sent to a flare at the refinery. The flares requirements are part of EPA’s national effort to reduce emissions from flares at refineries, petrochemical, and chemical plants.

The flaring efficiency requirements are settlement with CountryMark are part of EPA’s national enforcement initiative to improve compliance among petroleum refiners and to reduce significant amounts of air pollution from refineries nationwide through comprehensive, company-wide enforcement settlements. The settlement with CountryMark is the 32nd under the EPA initiative. With today’s settlement, 109 refineries operating in 32 states and territories – more than 90 percent of the total refining capacity in the United States – are under judicially enforceable agreements to significantly reduce emissions of pollutants. As a result of the settlement agreements, refiners have agreed to invest more than $6 billion in new pollution controls designed to reduce emissions of sulfur dioxide, nitrogen oxides, and other pollutants by over 360,000 tons per year.

The State of Indiana actively participated in the settlement with CountryMark and has received over $110,000 to fund a supplemental environmental project to remove asbestos-containing material from an old grain elevator in downtown Mount Vernon. The settlement also requires CountryMark to provide at least $70,000 in funding for a supplemental environmental project that will install diesel retrofit and/or idle reduction technologies on school buses and/or non-school bus, publicly-owned vehicles located within 50 miles of the refinery.

The consent decree, lodged in the Southern District of Indiana, is subject to a 30-day public comment period and court approval.

EPA SETTLEMENT INCLUDES CLOSING OF TIRE-BURNING FACILITY

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY
EPA Settles with Geneva Energy on Clean Air Act Violations; Tire-burning Facility to Close

Chicago (Feb. 25, 2013) - The U.S. Environmental Protection Agency has reached agreement with Geneva Energy, LLC on the terms of a consent decree to resolve allegations that the company violated the Clean Air Act at a tire-burning electric generating plant in Ford Heights, Illinois. Geneva has agreed to close the facility, which operated intermittently from 2006 until the fall of 2011.

A federal lawsuit was filed at the same time as the settlement and alleges violations included in an August 2010 EPA Notice and Finding of Violation issued to the facility. The NOV/FOV alleged violations of the facility’s construction permit, including monitoring and reporting requirements and emission limits established for carbon monoxide, nitrogen oxide, sulfur dioxide, ammonia, particulate matter, and opacity.

"This settlement will eliminate the source of almost 200 tons of air pollutants each year, in a community that has historically been disproportionately impacted by environmental contamination," said EPA Regional Administrator Susan Hedman.

As part of the consent decree, Geneva will also withdraw all permits and permit applications submitted to Illinois EPA and surrender all sulfur dioxide allowances. Based on an analysis of financial information, the government concluded that Geneva is insolvent and unable to pay a civil penalty.

The consent decree also resolves Clean Air Act violations by NAES Corporation, an operations consultant at the facility during a 14-month period in 2008-2009. NAES will pay a $185,000 civil penalty.

MAN AND COMPANY TO PAY $600,000 FOR COMMITTING $3 MILLION FRAUD

FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
Federal Court in Massachusetts Imposes $600,000 Penalty on Jeffrey Liskov and His Company, EagleEye Asset Management, for Committing a $3 Million Forex Fraud

Defendants are permanently banned from futures industry

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Joseph L. Tauro of the U.S. District Court for the District of Massachusetts issued an Order requiring Defendants Jeffrey Liskov and his company, EagleEye Asset Management, LLC (EagleEye), both of Plymouth, Mass., each to pay a $300,000 civil monetary penalty for fraud in connection with foreign currency (forex) trading. The Order of Permanent Injunction also imposes permanent trading and registration bans against Liskov and EagleEye and prohibits them from violating the provisions of the Commodity Exchange Act, as charged.

The Order stems from a CFTC Complaint filed September 8, 2011which charged Liskov with cheating and defrauding at least one customer in the United States of over $3 million of retirement funds while trading off-exchange forex contracts on the customer’s behalf.

The CFTC Complaint further alleged that Liskov engaged in unauthorized trading of the customer’s accounts, misappropriated funds, and forged the customer’s signatures on wire transfer and account opening documents that he provided to the brokerage house carrying her accounts. As a result of this unauthorized trading scheme, Liskov and EagleEye received approximately $235,000 in performance incentive fees to which they were not entitled, according to the Complaint. By the time the customer discovered the unauthorized trading, Liskov and EagleEye lost over $3.24 million by trading forex, according to the Complaint.

The CFTC appreciates the assistance of the Securities and Exchange Commission’s (SEC) Boston office, which filed an action against Liskov and EagleEye on the same day as the CFTC, and the U.K. Financial Services Authority. The SEC’s action against Liskov and EagleEye resulted in sanctions and a jury finding against them (see SEC Litigation Release 22546, Nov. 27, 2012).

CFTC Division of Enforcement staff members responsible for this action are Camille M. Arnold, Joseph Patrick, Susan Gradman, Joseph Konizeski, Scott Williamson, Rosemary Hollinger, and Richard Wagner.

SHIPPING COMPANY TO PAY $2.2 MILLION FOR OIL POLLUTION COVER-UP

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, February 22, 2013
Singapore-Based Shipping Company to Pay $2.2 Million for Covering up Oil Pollution 

Pacific International Lines, a Singapore-based container ship company, was sentenced today in D.C. federal court under the terms of a plea agreement that requires the company to pay $2.2 million in criminal penalties, the Department of Justice announced today. Pacific International Lines previously pleaded guilty to three felony charges that it made false statements to the U.S. Coast Guard and violated the Act to Prevent Pollution from Ships by concealing illegal waste water operations and discharges in a falsified oil record book – a required log in which all overboard discharges must be recorded – and operating a vessel in waters of the United States without a functioning oil water separator (a required pollution control device). The charges are a result of Pacific International Lines illegal operation of the vessel M/V Southern Lily 2 in June 2012.

"Today's sentencing is a noteworthy success for the few federal law enforcement agencies charged with enforcing U.S. and international maritime laws protecting the oceans and natural marine resources both around the remote U.S. Pacific Islands and throughout the vast area of the South Pacific," said Joshua J. Masterson, Special Agent-in-Charge of Coast Guard Investigative Service-Pacific Region. "This case, being the third of its kind since 2011, should send a clear message to those shipping companies and mariners who willfully cut corners and violate the laws enacted to protect the oceans as well as place a much needed spotlight on this region of the South Pacific."

According to the plea agreement, including a joint factual statement, the company operated the vessel Southern Lily 2 in American Samoa. On June 22, 2012, the vessel was boarded by the U.S. Coast Guard for a routine inspection. During the inspection the Coast Guard discovered that the ship’s oil water separator was not functioning. The Coast Guard learned that the device had not been functioning for several months and, at the direction of the chief and second engineer, the oily waste water had been being discharged overboard in violation of international law. The illegal discharges and the fact that the oil water separator did not function was not entered in the ship’s oil record book as required by federal law.

Additionally, under the terms of the plea agreement, Pacific International Lines was placed on probation for three 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 Pacific International Lines ships—including the Southern Lily 2—that trade in the United States.

In addition to the $2 million criminal fine, the judge also ordered Pacific International Lines to pay $200,000 to support community service projects. The projects will be administered by the National Fish & Wildlife Foundation asnd the National Marine Sanctuary Foundation.

Engine room operations on-board large ocean-going vessels such as the Southern Lily 2 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 related prosecutions, the second engineer of the Southern Lily 2, Qing Cao, pleaded guilty to a felony information charging him with operating the Southern Lily 2 in Waters of the United States without a functioning oil water separator in violation of the Act to prevent Pollution from Ships. The court sentenced Cao to 36 months of probation and ordered Cao to depart the United States immediately. As a condition of probation, the court ordered Cao not to work on any vessels that call at U.S. ports during the term of his probation.

This investigation was conducted by the Pacific Regional Office of the U.S. Coast Guard Investigative Service Honolulu, Hawaii, and Senior Litigation Counsel Howard P. Stewart of the Justice Department’s Environmental Crimes Section.

ASSISTANT ATTORNEY GENRAL DELERY SPEAKS AT PCA PEN AND PAD

FROM: U.S. DEPARTMENT OF JUSTICE
Principal Deputy Assistant Attorney General Stuart F. Delery Speaks at the PCA Pen and Pad
Washington, D.C. ~ Thursday, February 21, 2013

Good morning. I am joined today by Michael J. Moore, the United States Attorney for the Middle District of Georgia, Adam Lee, FBI Section Chief, Public Corruption and Civil Rights, and John Roth, Director of the FDA’s Office of Criminal Investigations, to announce a major step in this Administration’s efforts to fight fraud and protect the safety of America’s food supply.

As the head of the Justice Department’s Civil Division, I oversee the Consumer Protection Branch, which is responsible for enforcing the Food, Drug, and Cosmetic Act. Under the FDCA, it is illegal to introduce into our markets a food or drug that is adulterated – which, for foods, generally can mean either that the product is tainted or that it was produced or handled in insanitary conditions. As a result, the FDCA is a powerful tool for protecting the health and safety of all Americans. Using the FDCA, the Department has worked to prevent adulterated products from reaching consumers by securing injunctions that ban companies from distributing food or drugs until they have cleaned up their facilities. And, when adulterated products do reach the market and pose a significant danger to the public, we will not hesitate to bring criminal cases that seek to hold wrongdoers accountable and deter other would-be violators.

We are here to announce that the federal district court for the Middle District of Georgia has unsealed a 76-count indictment charging a number of former executives and employees of the Peanut Corporation of America with mail fraud, wire fraud, violations of the Food, Drug, and Cosmetic Act, obstruction of justice, and conspiracy to commit mail and wire fraud. As charged in the indictment, three of the defendants—Stewart Parnell, Michael Parnell, and Samuel Lightsey, engaged in multiple schemes to defraud the company’s customers and mislead those customers as to the presence of salmonella in PCA peanut products. In addition, Stewart Parnell, Samuel Lightsey, and former PCA employee Mary Wilkerson have been charged with obstruction of justice.

In addition to this indictment, the court also unsealed an Information containing criminal charges against former PCA executive Daniel Kilgore. Mr. Kilgore has pleaded guilty to that Information, which charged him with the same conspiracy to commit fraud, violations of the Food, Drug, and Cosmetic Act, and other crimes.

Many of you may recall the national outbreak of salmonella that took place in 2008 and 2009. The indictment we are announcing today arises out of a criminal investigation launched after PCA’s Blakely, Georgia peanut processing plant was identified as a likely source for that outbreak. As charged in the indictment, PCA produced peanuts at its Blakely plant under insanitary conditions, which included PCA’s failure to follow appropriate practices to ensure its plants were sanitary, its failure to prevent cross-contamination between raw and cooked product, and its failure to take adequate steps to keep rodents and insects out of the plant.

These products were sold to food producers around the country. PCA peanut products ended up in many foods eaten by Americans every day.

As alleged in the indictment, three of the defendants — Stewart Parnell, Michael Parnell, and Samuel Lightsey — engaged in a multi-year conspiracy to hide the fact that many of PCA’s products were tainted with salmonella. The indictment charges that these PCA officials affirmatively lied to their customers about the presence of salmonella in PCA’s products, failing to reveal to their customers when PCA’s testing by independent labs revealed salmonella in products being shipped from PCA’s Blakely plant on a regular basis. As alleged in the indictment, some PCA officials went so far as to fabricate the Certificates of Analysis that its customers relied on. As charged in the indictment, although the Certificates of Analysis which accompany shipments of peanut products were supposed to summarize laboratory results, some PCA officials prepared Certificates stating that PCA products were free of salmonella even when tests showed the presence of salmonella or when no tests had been done at all.

According to the indictment, some of these officials continued to violate the law through the beginning of the investigation of the 2009 outbreak. FDA inspectors visited PCA’s plant several times in January 2009 to try to get to the bottom of the outbreak. As noted in the indictment, FDA inspectors asked specific questions about the plant, its operations, and its history. However, as alleged in the indictment, some of the defendants gave untrue or misleading answers to these questions, again hiding the known presence of salmonella in PCA’s peanut products.

When food or drug manufacturers lie and cut corners, they put all of us at risk. The Department of Justice will not hesitate to pursue any person whose criminal conduct risks the safety of Americans who have done nothing more than eat a peanut butter and jelly sandwich. Like the FDA, we pay close attention to food safety matters, and we are committed to using every tool at our disposal to protect Americans from unsafe foods.

I want to thank our partners at the United States Attorney’s Office, the FBI, and the FDA for their superb work in this investigation. Our partnership is a shining example of good government, and led directly to the culmination of the investigation which is being announced today.

And now it is my pleasure to introduce the United States Attorney for the Middle District of Georgia, Michael Moore.

JUSTICE SEEKS TO CLOSE DETROIT-AREA TAX PREPARATION BUSINESSES

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, February 21, 2013
Justice Department Seeks to Shut Down Detroit-Area Tax Return Preparers
Group’s "Tax King" Business Allegedly Claimed Fraudulent Credits and Deductions on Tax Returns

The Justice Department announced today that it has asked a federal court in Detroit to permanently bar Calvin Carter and brothers Raheen Stroud and Laron Stroud, who do business as E-File Tax Pros LLC and Tax King, from preparing federal tax returns. The civil injunction suit alleges that Carter and the Stroud brothers falsify customers’ income on their tax returns, frequently by fabricating business income and expenses, in order to claim the maximum earned income tax credit (EITC) for them.

The EITC is a refundable credit available to certain low-income people. The maximum credit in 2010 was $5,666. Due to the method used to calculate the EITC, people with higher annual incomes may be entitled to a larger credit. Some tax preparers refer to the range of earned income generating a maximum EITC as the "sweet spot." According to the complaint, Carter and the Stroud brothers fabricated businesses and reported fake business income and expenses on their customers’ tax returns to achieve reported income in the EITC sweet spot. The complaint alleges that the defendants filed tax returns in 2009, 2010, and 2011 that had an extremely high refund-request rate of 97 percent.

The complaint also alleges that the defendants prepare returns for customers that falsely claim the first-time-homebuyer credit even though the customers had not bought new homes and were ineligible for the credit.