Polembros Shipping LTD. Pleads Guilty to Crimes Related to Pollution from Cargo Ship Traveling to New Orleans

Company has agreed to pay $2.7 million criminal fine.

WASHINGTON—Polembros Shipping LTD., a ship management company headquartered in Greece, pleaded guilty today in federal court in New Orleans for violating anti-pollution laws, ship safety laws, and making false statements during a U.S. Coast Guard investigation of the M/V Theotokos, the Justice Department announced.

According to the plea agreement, Polembros will pay a $2.7 million criminal fine and a separate $100,000 community service payment to the Smithsonian Environmental Research Center, a subunit of Smithsonian Institute. The money will be used to research and mitigate the effects of marine invasive species suspected to be transported in ballast waters of ocean-going vessels. Invasive species can threaten native species and damage the ecosystems of the United States.

As part of the plea agreement, Polembros will also serve three years probation. As a condition of the probation, all ships owned or managed by Polembros (currently 20 vessels) will be barred from entering U.S. ports and territorial waters for three years.

“Today’s guilty plea carries with it a requirement, pending court review, that will prevent the company from participating in economic activity that takes place in territorial ports and waterways of the United States,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The industry should take heed that the Justice Department and our investigative counterparts will continue to prosecute and seek penalties for those who violate our nation’s environmental laws.”

“This case is historic in that it is the first prosecution under the Nonindigenous Aquatic Nuisance Prevention and Control Act. As a component of the Coast Guard’s maritime stewardship mission we are committed to the prevention and abatement of environmental crimes including those which may fall under the Nonindigenous Aquatic Nuisance Prevention and Control Act,” said Rear Admiral Mary E. Landry, Commander of the Eighth Coast Guard District.

Polembros pleaded guilty to violating two counts of the Act to Prevent Pollution from Ships, one count in connection with failing to maintain an accurate oil record book for the cargo ship M/V Theotokos and the other concerning the carrying of fuel oil in a tank forward of the collision barrier; violating the Nonindigenous Aquatic Nuisance Prevention and Control Act, by failing to maintain accurate ballast water records; violating the Ports of Waterways Safety Act, by failing to report hazardous condition of the crack on the rudder stem of the ship; and making false statements by concealing the fact that fuel oil was leaking into the forepeak ballast tank.

According to court documents, the ship’s master reported the rudder stem crack by phoning Polembros’ technical department (part of the land-based management) shortly after the crack was seen following a cargo unloading operation in China. Polembros and its employees knew about that crack prior to the vessel arriving in New Orleans, but the defendant and its employees did not notify or disclose the aft crack to the U.S. Coast Guard until the Theotokos crew was confronted by Coast Guard inspectors on Oct. 1, 2008. The company and its employees knew that before coming to the United States that it was under a legal obligation to notify the Coast Guard of any hazardous condition. A crack on the rudder stem, especially one that allows for the ingress and egress of water, is of particular concern. Prior to the detention of the vessel by the Coast Guard, no repairs were undertaken for the rudder stem crack at sea, or otherwise, prior to arriving in New Orleans.

With regard to the oil record book violation, bilge waste accumulates in deep spaces and is also held in bilge tanks. Under the International Convention for the Prevention of Pollution from Ships, bilge wastes may be discharged overboard into the ocean only if they contain less than 15 parts per million of oil. The principal technology utilized to lower the petroleum content of oil-contaminated water is a centrifugal separation machine, also known as an oil water separator. At some point, the ship’s oil water separator ceased functioning properly. During the voyage from Korea to Panama, the chief engineer contacted Polembros’ land-based management regarding the problems with the oil water separator.

During the ship’s operation, bilge waste accumulated and needed to be disposed of to keep the system from overflowing. Because the oil water separator was not functioning properly, the chief engineer directed the engineering crew to bypass the oil water separator and discharge bilge waste directly overboard. The primary overboard outlet for the oily mixtures was through the overboard sewage discharge valve. None of these discharges were recorded, as required, in the vessel’s oil record book, even though the chief engineer was responsible for maintaining its accuracy with regard to machinery space operations.

The investigation into the M/V Theotokos led to the first criminal prosecutions under the Nonindigenous Aquatic Nuisance Prevention and Control Act, both the first individual and organization charged under the statute. The false statement charge related to the crew’s attempt to conceal the fact that fuel oil was leaking into the forepeak ballast tank.

Polembros is set to be sentenced on Dec. 9, 2009.

Additionally, on July 15, 2009, Panagiotis Lekkas, the master and highest ranking officer aboard the ship, pleaded guilty to obstruction of justice and violations of environmental and ship safety laws. Charles P. Posas, the vessel’s chief officer, pleaded guilty to one count of false statement and one count of violating the Nonindigenous Aquatic Nuisance Prevention and Control Act. Lekkas and Posas are scheduled to be sentenced on Oct. 14, 2009, and Oct. 1, 2009, respectively. In another related case, the chief engineer of the Theotokos, Georgios Stamou, pleaded guilty to one count of false statements and one count of violating the Act to Prevent Pollution from Ships. Stamou is scheduled to be sentenced on Nov. 5, 2009.

The case was investigated by the U.S. Coast Guard Investigative Service with assistance from inspectors from Sector New Orleans as well as legal assistance from U.S. Coast Guard in New Orleans and at Headquarters in Washington, D.C. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section along with Dorothy Taylor of the U.S. Attorney’s Office in New Orleans.