DOJ: Owner, Operator, and Chief Engineer Sentenced

Crimes involved the intentional dumping of waste oil into the ocean.

OAKLAND – United States Attorney Joseph P. Russoniello announced that Casilda Shipping, Ltd., the Maltese company that owned the Rio Gold (a 23,000 ton ocean-going cargo ship registered in Malta); Genesis Seatrading Corporation, the Greek operating company; and Mr. Pantelis Thomas, the vessel’s Chief Engineer and a citizen of Greece, all pleaded guilty and were sentenced last week for conspiring to falsify waste oil disposal records related to the intentional disposal of waste oil into the ocean while in international waters.

Casilda Shipping, Ltd., was sentenced to pay a fine of $750,000 and to serve three years of probation. Genesis Seatrading Corporation was sentenced to serve three years of probation and to comply with an extensive three-year Environmental Compliance Plan. Mr. Thomas was sentenced to serve three years of probation and pay a $5,000 fine.

In pleading guilty, defendants admitted to their use of equipment—known in the trade as a “magic pipe”—to bypass the anti-pollution equipment on the ship. Defendants ordered the crew to illegally use the “magic pipe” to discharge waste oil directly into the ocean. Defendants concealed their illegal overboard discharges by making false entries and omissions into the ship’s on-board records. Vessels, like the Rio Gold, are legally obligated to maintain these records to verify their compliance with applicable maritime environmental laws and regulations.

The violations came to the attention of the U.S. Coast Guard after the Rio Gold docked in Oakland on May 26, 2008, when four crew members reported the illegal activities. A subsequent inspection of the Rio Gold uncovered the “magic pipe” disassembled and stored away, along with evidence of its consistent use.

Defendants were indicted by a federal grand jury on July 9, 2008. The indictment alleged that the illegal dumping of waste oil into the ocean occurred beginning with the period the Rio Gold was first purchased in July 2007 and continued until shortly before the vessel docked in Oakland in May 2008.
U.S. Attorney Joseph Russoniello said, “This prosecution exemplifies the federal government’s commitment to closely scrutinize and oversee not just the proper commercial use of San Francisco Bay, but the requirement that shippers and crew strictly adhere to safety and environmental rules, including, but not limited to, the accurate reporting of their navigational and waste and fuel discharge activities while in U. S. waters.”

Rear Admiral Paul Zukunft, Commander of the Eleventh Coast Guard District, added, “Marine environmental protection is one of the key pillars of the Coast Guard’s roles and missions that we enforce with tenacity. Accordingly, the U.S. Coast Guard will use all available resources and expertise to identify, investigate, and pursue the prosecution of those who deliberately cause harm to our marine environment.”

Coast Guard Captain Paul Gugg, Captain of the Port of San Francisco, also added, “We work very hard every day to promote corporate responsibility and compliance with environmental protection regulations in the maritime industry. While the vast majority of commercial mariners are honest and law-abiding, the industry should also know that we will work diligently to prosecute these crimes when they occur.”

Pursuant to the plea agreement, $250,000 of the fine amount will be paid to the National Fish and Wildlife Foundation for use in projects to restore the Northern California coast, and an additional portion of the fine amount will be paid to the four crew members who initially reported their employer’s misconduct to authorities.

The sentence was handed down by U.S. District Court Judge Claudia Wilken following guilty pleas by all three defendants to one count of conspiracy, in violation of 18 U.S.C. § 371, and one count of intentionally failing to maintain an accurate oil record book in violation of 33 U.S.C. § 1908(a).

Stephen G. Corrigan and Wade M. Rhyne are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Lieutenant Jeffery A. King and the U.S. Coast Guard Pacific JAG Office. The prosecution is the result of a five-month investigation by the U.S. Coast Guard Investigative Service and U.S. Coast Guard Sector San Francisco’s Port State Control Office.

Further Information: Case #: CR 08-488-CW. A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.