Summary of Criminal Prosecutions
FISCAL YEAR: 2014
1. PRINCIPAL DEFENDANT: Benjamin Franklin Pass
E.D. North Carolina 7:12-CR-85-1-D
E.D. North Carolina 7:12-CR-85-1-D
2. DEFENDANT: P&W Oil Company Inc.
E.D. North Carolina 7:12-CR-85-1-D
E.D. North Carolina 7:12-CR-85-1-D
http://www.justice.gov/opa/pr/north-carolina-recycling-business-and-owner-sentenced-unlawful-handling-pcb-contaminated-oil
North Carolina Recycling Business and Owner Sentenced to Unlawful Handling of PCB-Contaminated Oil, Tax Violations, and False Statements Benjamin Franklin Pass, 61, and P&W Waste Oil Services Inc. (P&W), of Leland, North Carolina were sentenced today in federal court in Raleigh, North Carolina. Pass was sentenced to 42 months in prison and ordered to pay restitution in the amount of $21,373,143.38 for clean-up costs associated with the environmental contamination at his business and an additional $538,857 to the Internal Revenue Service (IRS) for federal income taxes he failed to pay between 2002 and 2011. Pass and the company previously pleaded guilty to crimes related to the unlawful handling and dilution of used oil contaminated with polychlorinated biphenyls (PCB). Pass also pleaded guilty to failure to pay taxes and P&W pleaded guilty to material false statements. The court also ordered P&W to pay restitution in the amount of $21,373,143.38 for losses incurred by Colonial Oil and International Paper as a result of the defendants’ mishandling of used oil contaminated with PCBs that led to widespread contamination and millions of dollars in clean-up costs. P&W was also ordered to serve a five-year term of probation and to take remedial action to address the environmental contamination at its facility and other leased property in eastern North Carolina, including but not limited to, the proper treatment and disposal of PCB-contaminated waste oil. “Today’s sentence is just punishment for the defendant’s actions, which placed the health of North Carolina’s residents and their natural resources at risk,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “ Environmental violations such as these are serious crimes, and the Justice Department and the U.S. Attorney’s Offices will continue to vigorously prosecute those individuals and companies who ignore the laws Congress enacted to protect people and our environment from toxic substances like PCBs.” “This disregard of environmental protections resulted in significant contamination,” said U.S. Attorney Thomas G. Walker. “The defendant’s conduct placed an economic burden on the United States and an unreasonable risk to the health and safety of the citizens of North Carolina.” According to information in the public record, Pass owned and operated P&W’s facility in Leland, North Carolina. The facility is located approximately 500 feet to the east of the Cape Fear River and a federally recognized wetland. As part of its business operations, P&W collected, transported, processed, and marketed used oil that it received from small and large companies, such as automotive service stations, transformer repair companies and marinas. P&W also conducted tank cleaning and waste removal. P&W, however, was not authorized to transport, store, or handle used oil containing more than two parts per million (ppm) of PCBs. PCBs are man-made organic chemicals that were manufactured domestically from 1929 to 1979 and were used in hundreds of industrial and commercial applications, such as thermal insulation in electrical transformers and capacitors. PCBs were determined to cause cancer and have been demonstrated to cause a variety of adverse health effects on the immune system, reproductive system, nervous system, and endocrine system. Accordingly, Congress banned the production of PCBs and mandated that no person may distribute in commerce, or use any PCBs other than in a totally enclosed manner, and directed the U.S. Environmental Protection Agency (EPA) to promulgate rules phasing out the manufacture of PCBs and regulating their disposal. PCBs still exist in products produced before the 1979 ban and if mishandled and released into the environment, can remain for long periods of time in the air, water, and soil. In July 2009, an employee of P&W transported used-oil contaminated with more than 500 ppm of PCBs from a business in Wallace, South Carolina to its Leland facility where the contaminated used oil was blended and diluted with other used oil. Testing results obtained by Pass in October 2009 revealed PCB contamination in excess of 4,925 ppm. The contaminated product was eventually resold to Colonial Oil and International Paper. Colonial Oil discovered the contamination as part of its standard sampling and testing protocol. As a result, over three million gallons of contaminated used oil had to be transported and incinerated at a certified disposal site for PCBs. The costs to Colonial Oil for the proper disposal of the contaminated used oil exceeded $17 million in addition to significant disruption of its business operations. The investigation further revealed that at the direction of Pass, employees of P&W continued to transport and dilute the PCB-contaminated used oil at the facility after the contamination was discovered. The EPA intervened and had the Leland facility designated a Superfund site. Superfund is the name given to the federal environmental program established to clean up the nation’s uncontrolled hazardous waste sites. Costs for the clean-up of the contaminated tanks at the facility exceeded $3.4 million. Law enforcement also learned that in 2009 and again in 2010, Pass and P&W falsely certified that its employees had taken requisite training on the handling of hazardous wastes and that, between 2002 through 2011, Pass failed to pay his federal income taxes despite having the ability to pay. “Today’s sentencing is a direct result of the strong collaboration between EPA-CID and its federal law enforcement partners,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in North Carolina. “In order to safeguard the environment and public health, it is essential that we hold companies and their corporate officers responsible for failing to accurately report violations to avoid penalty. We will continue to pursue those who fraudulently report information critical to human health and the environment to preserve the integrity of programs designed to protect the public.” “Mr. Pass’s disregard to uphold his legal obligations in business and paying income taxes have come with a price,” said Chief Richard Weber of the IRS Criminal Investigation. “Today’s sentencing reinforces law enforcements collaborative efforts to enforce the law and ensure public trust.” Thomas J. Holloman, Special Agent in Charge IRS Criminal Investigation added, “A fraud of this magnitude requires a coordinated effort among law enforcement agencies to stop those involved from profiting from their wrongdoing. We are the stewards of our environment and anyone who knowingly pollutes it should be held accountable.” Acting Assistant Attorney General Hirsch and U.S. Attorney Walker praised the continued joint efforts of the EPA’s Criminal Investigation Division and the IRS’s Office of Criminal Investigations and the U.S. Coast Guard’s Criminal Investigative Services for their diligent work in the investigation of this matter. Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina and Trial Attorney Shennie Patel of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division are the prosecutors in charge of the case. Assistant U.S. Attorney Norman Acker and the Financial Litigation Unit provided significant support to the prosecution team.
North Carolina Recycling Business and Owner Sentenced to Unlawful Handling of PCB-Contaminated Oil, Tax Violations, and False Statements Benjamin Franklin Pass, 61, and P&W Waste Oil Services Inc. (P&W), of Leland, North Carolina were sentenced today in federal court in Raleigh, North Carolina. Pass was sentenced to 42 months in prison and ordered to pay restitution in the amount of $21,373,143.38 for clean-up costs associated with the environmental contamination at his business and an additional $538,857 to the Internal Revenue Service (IRS) for federal income taxes he failed to pay between 2002 and 2011. Pass and the company previously pleaded guilty to crimes related to the unlawful handling and dilution of used oil contaminated with polychlorinated biphenyls (PCB). Pass also pleaded guilty to failure to pay taxes and P&W pleaded guilty to material false statements. The court also ordered P&W to pay restitution in the amount of $21,373,143.38 for losses incurred by Colonial Oil and International Paper as a result of the defendants’ mishandling of used oil contaminated with PCBs that led to widespread contamination and millions of dollars in clean-up costs. P&W was also ordered to serve a five-year term of probation and to take remedial action to address the environmental contamination at its facility and other leased property in eastern North Carolina, including but not limited to, the proper treatment and disposal of PCB-contaminated waste oil. “Today’s sentence is just punishment for the defendant’s actions, which placed the health of North Carolina’s residents and their natural resources at risk,” said Sam Hirsch, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “ Environmental violations such as these are serious crimes, and the Justice Department and the U.S. Attorney’s Offices will continue to vigorously prosecute those individuals and companies who ignore the laws Congress enacted to protect people and our environment from toxic substances like PCBs.” “This disregard of environmental protections resulted in significant contamination,” said U.S. Attorney Thomas G. Walker. “The defendant’s conduct placed an economic burden on the United States and an unreasonable risk to the health and safety of the citizens of North Carolina.” According to information in the public record, Pass owned and operated P&W’s facility in Leland, North Carolina. The facility is located approximately 500 feet to the east of the Cape Fear River and a federally recognized wetland. As part of its business operations, P&W collected, transported, processed, and marketed used oil that it received from small and large companies, such as automotive service stations, transformer repair companies and marinas. P&W also conducted tank cleaning and waste removal. P&W, however, was not authorized to transport, store, or handle used oil containing more than two parts per million (ppm) of PCBs. PCBs are man-made organic chemicals that were manufactured domestically from 1929 to 1979 and were used in hundreds of industrial and commercial applications, such as thermal insulation in electrical transformers and capacitors. PCBs were determined to cause cancer and have been demonstrated to cause a variety of adverse health effects on the immune system, reproductive system, nervous system, and endocrine system. Accordingly, Congress banned the production of PCBs and mandated that no person may distribute in commerce, or use any PCBs other than in a totally enclosed manner, and directed the U.S. Environmental Protection Agency (EPA) to promulgate rules phasing out the manufacture of PCBs and regulating their disposal. PCBs still exist in products produced before the 1979 ban and if mishandled and released into the environment, can remain for long periods of time in the air, water, and soil. In July 2009, an employee of P&W transported used-oil contaminated with more than 500 ppm of PCBs from a business in Wallace, South Carolina to its Leland facility where the contaminated used oil was blended and diluted with other used oil. Testing results obtained by Pass in October 2009 revealed PCB contamination in excess of 4,925 ppm. The contaminated product was eventually resold to Colonial Oil and International Paper. Colonial Oil discovered the contamination as part of its standard sampling and testing protocol. As a result, over three million gallons of contaminated used oil had to be transported and incinerated at a certified disposal site for PCBs. The costs to Colonial Oil for the proper disposal of the contaminated used oil exceeded $17 million in addition to significant disruption of its business operations. The investigation further revealed that at the direction of Pass, employees of P&W continued to transport and dilute the PCB-contaminated used oil at the facility after the contamination was discovered. The EPA intervened and had the Leland facility designated a Superfund site. Superfund is the name given to the federal environmental program established to clean up the nation’s uncontrolled hazardous waste sites. Costs for the clean-up of the contaminated tanks at the facility exceeded $3.4 million. Law enforcement also learned that in 2009 and again in 2010, Pass and P&W falsely certified that its employees had taken requisite training on the handling of hazardous wastes and that, between 2002 through 2011, Pass failed to pay his federal income taxes despite having the ability to pay. “Today’s sentencing is a direct result of the strong collaboration between EPA-CID and its federal law enforcement partners,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in North Carolina. “In order to safeguard the environment and public health, it is essential that we hold companies and their corporate officers responsible for failing to accurately report violations to avoid penalty. We will continue to pursue those who fraudulently report information critical to human health and the environment to preserve the integrity of programs designed to protect the public.” “Mr. Pass’s disregard to uphold his legal obligations in business and paying income taxes have come with a price,” said Chief Richard Weber of the IRS Criminal Investigation. “Today’s sentencing reinforces law enforcements collaborative efforts to enforce the law and ensure public trust.” Thomas J. Holloman, Special Agent in Charge IRS Criminal Investigation added, “A fraud of this magnitude requires a coordinated effort among law enforcement agencies to stop those involved from profiting from their wrongdoing. We are the stewards of our environment and anyone who knowingly pollutes it should be held accountable.” Acting Assistant Attorney General Hirsch and U.S. Attorney Walker praised the continued joint efforts of the EPA’s Criminal Investigation Division and the IRS’s Office of Criminal Investigations and the U.S. Coast Guard’s Criminal Investigative Services for their diligent work in the investigation of this matter. Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina and Trial Attorney Shennie Patel of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division are the prosecutors in charge of the case. Assistant U.S. Attorney Norman Acker and the Financial Litigation Unit provided significant support to the prosecution team.
STATUTE:
- Title 18 U.S. Criminal Code (TITLE 18)
- Toxic Substances Control Act (TSCA)