https://www.justice.gov/usao-cdil/pr/former-emi-owners-sentenced-multi-million-dollar-fraud-scheme

Wednesday, March 30, 2016

Former EMI Owners Sentenced for Multi-Million Dollar Fraud Scheme

Springfield, Ill. – Brothers Joel and Eric Andrews, former principal owners of Environmental Management of Illinois, Inc. (EMI), Springfield, Ill., were sentenced to three years and two and one-half years, respectively, in federal prison for a scheme that defrauded the Illinois Environmental Protection Agency of millions of dollars. Co-defendant Michael Keebler, who bought the business in 2006, was sentenced in August 2015 to five years in prison for the scheme, which, over a period of 12 years, from 2001 to 2013, swindled money from a fund administered by Illinois EPA to clean up sites contaminated by leaking underground storage tanks.

U.S. District Judge Sue E. Myerscough allowed both men to remain on bond until they report to the federal Bureau of Prisons in July 2016. Following their release from prison, both were ordered to serve the first 12 months of a three-year term of supervised release under home confinement.

Joel Andrews, 47, of New Berlin, Ill., Eric Andrews, 52, of Shipman, and Michael Keebler, 42, of Sherman, each share, jointly and severally, in the court’s order to pay restitution of no more than $13.36 million to the Illinois EPA minus any offsets agreed to by the government. Thus far, the three defendants have posted $6.2 million with the court toward the total amount of restitution ordered, and any of their remaining assets, including EMI, are subject to forfeiture proceedings by the government.

Joel and Eric Andrews each pled guilty on Mar. 2, 2015, to one count of conspiracy to commit mail fraud. Keebler entered pleas of guilty on Feb. 27, 2015, to two counts of conspiracy to commit mail fraud.

The U.S. EPA has a cooperative agreement with the State of Illinois to administer the UST (underground storage tanks) program. IEPA and the Illinois Office of the State Fire Marshal share administration of the UST fund which assists tank owners and operators with the cleanup costs of petroleum leaks from USTs. The State Fire Marshal administers the preventative and permitting aspects of the program. If there is a spill or leak, IEPA is responsible for oversight of the cleanup investigation and the corrective action, in order to clear the property for use again. State taxes and fees paid on the purchase of gasoline fund the Leaking UST (LUST) program.

Joel Andrews founded EMI in 1997 and served as president, and Eric Andrews joined in 1999 as vice-president. In April of 2001, professional engineer Michael Keebler joined the firm. In 2006, the firm was sold to Michael Keebler, who remained as the firm’s principal owner and president.

The environmental consulting firm, located at 1154 N. Bradfordton Road, Springfield, worked with property owners to clean up sites contaminated by petroleum leaks, spills, or overfills from underground storage tanks. The firm then sought reimbursement of its costs to remediate the land from a fund administered by a designated section within Illinois EPA.

According to plea agreements filed by the parties and during court hearings, each of the men admitted that they conspired to defraud the LUST fund by artificially inflating expenses they incurred in remediating property. For example, agreements were made with vendors to submit two invoices for certain services; one that listed the actual costs of the service provided and the payment to be made by EMI, and a second invoice which inflated the amount of work performed and supplies used, the amount charged for the work, or both. The inflated invoice would then be provided to Illinois EPA for reimbursement. Certain vendors were also paid a reduced rate, but EMI misrepresented to the Illinois IEPA that they had been paid full price. At other times, invoices were created or existing invoices modified to reflect a higher charge than was actually paid before they were submitted to IEPA for reimbursement.

The case was prosecuted by First Assistant U.S. Attorney Patrick D. Hansen. The charges resulted from a two-year investigation by the Federal Bureau of Investigation and the U.S. Environmental Protection Agency, Criminal Investigation Division.

• Title 18 U.S. Criminal Code (TITLE 18)