Two Vessel Engineers Convicted of Environmental Crimes and of Obstruction
The government’s pursuit of fraud and abuse often involves the collaboration of seemly disparate agencies such as the Coast Guard and the Justice Department. This was proven to be the case when the Department of Justice announced late last month that a federal jury in Charleston, South Carolina Court had convicted two chief engineers of the vessel T/V Green Sky of falsifying documents in order to conceal the illegal discharge of oily bilge waste. The two were also convicted of obstruction. Herbert Julian – who served as chief engineer of the ship – was convicted of two felony counts for obstruction of justice. Panagiotis Koutoukakis – chief engineer from February 1 to August 3, 2015 – was also convicted of two felony counts, one for Act to Prevent Pollution from Ships (APPS) violations plus another for falsifying records. It was also revealed at the time that Aegean Shipping Management, S.A., had previously pleaded guilty to a violation of the APPS and obstruction of justice.
“With Charleston serving as one of the largest ports on the Eastern seaboard, working vessel pollution cases with the Environmental Crimes Section is an important focus for our office,” said U.S. Attorney Beth Drake, District of South Carolina. “Through criminal charges, we can deter those who would dump oily wastes into the world’s oceans and use false documents to cover it up.” The Green Sky is a chemical tanker flagged in Liberia. It generates large amounts of oil-contaminated waste water. This contaminated bilge waste is required to be removed from the vessel before it fills up the bottom of the Engine Room and causes damage to equipment and jeopardizes ship safety. Nevertheless, the law forbids oceangoing vessels from discharging this oily waste water directly into the sea.
The evidenced showed that the Green Sky regularly pumped contaminated, oily water directly overboard into the sea. Moreover, not only did the discharges go undisclosed, the records of the Green Sky were alleged to have been falsified in order to cover up these activities. The Green Sky falsified these activities using several methods: the first was that it omitted illegal bypass operations. The second was that it claimed that an oil water separator was used that had not been. Finally, the record books of the Green Sky were falsified with erroneous entries in order to further the cover-up. While nearly all of the discharges occurred in international waters, at least two occurred within the Exclusive Economic Zone of the United States.
Further evidence presented at the trial showed that the chief engineers covered up illegal overboard discharged through a “magic” hose and “magic” valve system that was apparently designed to bypass the ship’s oil water separator. Both Koutoukakis and Julian are said to have falsified the oil record books in order to hide the illegal discharges. These falsified records were ultimately presented to the U.S. Coast Guard during an inspection of the vessel. The Coast Guard was alerted to the deception by three whistleblowers that came forward to report the crimes. Testimony given at Julian’s trial revealed that he had hidden the log prior to the Green Sky’s arrival in Charleston and then lied to the Coast Guard about the vessel having a sounding log.
Prior to the trial, the Green Sky’s operator, Aegean Shipping Management, S.A., pleaded guilty to one APPS violation for illegally discharging waste into the sea and one count of obstruction. Moreover, unsealed documents revealed that the operating company agreed to pay a $2 million penalty. Aegean Shipping was also sentenced to probation and made to follow an environmental compliance plan. A second engineer, Nikolaos Bounovas, was acquitted of all charges against him. The case was investigated by the U.S. Coast Guard Sector Charleston and the Coast Guard Investigative Service. The case was prosecuted with the help of the U.S. Department of Justice’s Environmental Crimes Section and several other agencies. If you know of abuse that has been committed against the government or one of its agencies you are encouraged to report it and to contact a qui tam lawyer. An expert in qui tam law will be able to advise you in such matters and will work to protect your rights.