DOJ ANNOUNCES SHIPPING COMPANY, ENGINEERING OFFICERS CONVICTED OF ENVIRONMENTAL CRIMES AND OBSTRUCTION

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, November 10, 2015

Norwegian Shipping Company and Engineering Officers Convicted of Environmental Crimes and Obstruction of Justice

A federal jury in Mobile, Alabama, has convicted Det Stavangerske Dampskibsselskab AS (DSD Shipping) and three employees with obstructing justice, violating the Act to Prevent Pollution from Ships (APPS), witness tampering and conspiracy, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Kenyen R. Brown of the Southern District of Alabama.  DSD Shipping is a Norwegian-based shipping company that operates crude oil tankers, including the M/T Stavanger Blossom.  Also convicted at trial were three senior engineering officers, Bo Gao, Xiaobing Chen and Xin Zhong, employed by DSD Shipping to work aboard the vessel.  A fourth employee, Daniel Paul Dancu, pleaded guilty in October.

The operation of marine vessels, like the M/T Stavanger Blossom, generates large quantities of waste oil and oil-contaminated waste water.  International and U.S. law requires that these vessels use pollution prevention equipment, known as an oily-water separator, to preclude the discharge of these materials.  Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.

“We will not tolerate the continued use of the world’s oceans as a dumping ground for contaminated waste,” said Assistant Attorney General Cruden.  “These defendants deliberately and egregiously violated the law and fouled the marine environment by dumping waste, then tried to cover it up with false records.  We hope this conviction sends a strong message to shippers worldwide that this activity must end, and we will vigorously prosecute those who continue this criminal behavior.”

“I am pleased with the record of this office in pursuing environmental crimes,” said U.S. Attorney Brown. “We will continue to prosecute corporations and individuals to protect our resources here along the Gulf Coast as well as around the World.  We need to ensure that all foreign vessels and corporations comply with U.S. Coast Guard Examinations to ensure these resources are protected.”

“The oceans cannot be used as dumping grounds,” said Acting Special Agent in Charge Andy Castro of the Environmental Protection Agency’s (EPA) criminal enforcement program in Alabama.  “The defendants in this case falsified entries in their vessel’s log books to hide the true nature of its open water discharges.  Today’s guilty verdict by a jury should serve as a warning to would-be violators that the American people will not allow the flagrant violation of U.S. laws.”

“This case shows the importance of interagency cooperation and how working together can keep our nation's waterways cleaner and safer for all,” said U.S. Coast Guard Admiral David R. Callahan.  “I commend the U.S. Attorney's Office, the Department of Justice, as well as Customs and Border Protection for their diligence in this case.  This case is a prime example of the Act to Prevent Pollution from Ships working as it was intended.  The Coast Guard is committed to working with our partners to enforce regulations and hold any violators accountable.”

“CGIS is dedicated to holding those individuals and Corporations accountable who violate United States and International law,” said Resident Agent in Charge John Allen with the U.S. Coast Guard Investigative Service (CGIS).  “CGIS will vigorously prosecute anyone who presents false documents to the U.S. Coast Guard or obstructs vessel examinations performed by the U.S. Coast Guard.”

The evidence presented during the two-week trial demonstrated that in January 2010, DSD Shipping knew that the oily-water separator aboard the M/T Stavanger Blossom was inoperable.  In an internal corporate memo, DSD Shipping noted that the device could not properly filter oil-contaminated waste water and stated that individuals “could get caught for polluting” if the problem was not addressed.  Rather than repair or replace the oily-water separator, however, DSD Shipping used various methods to bypass the device and force the discharge of oily-wastes into the ocean.  During the last months of the vessel’s operation prior to its arrival in the Port of Mobile, the M/T Stavanger Blossom discharged approximately 20,000 gallons of oil-contaminated waste water.

The evidence at trial also established that DSD Shipping employees intentionally discharged fuel oil sludge directly into the ocean.  Specifically, crewmembers cleaned the vessel’s fuel oil sludge tank, removed approximately 264 gallons of sludge and placed the waste oil into plastic garbage bags.  After hiding the sludge bags aboard the ship from port authorities in Mexico, defendants Chen and Zhong ordered crewmembers to move as many as 100 sludge bags to the deck of the vessel.  There, Zhong threw the sludge bags overboard directly into the ocean.

DSD Shipping, Dancu, Gao, Chen and Zhong, all attempted to hide these discharges from the U.S. Coast Guard by making false and fictitious entries in the vessel’s oil record book and garbage record book.  Further, after arriving in Mobile, Chen and Zhong lied to the U.S. Coast Guard about the discharge of sludge and ordered lower ranking crewmembers to do the same.

At the conclusion of trial, DSD Shipping was convicted of one count of conspiracy, three counts of violating APPS, three counts of obstruction of justice and one count of witness tampering.  Defendant Gao was convicted of one count of conspiracy and two counts of obstruction of justice.  Defendant Chen was convicted of one count of violating APPS, three counts of obstruction of justice and one count of witness tampering.  Finally, Zhong was convicted of two counts of violating APPS, two counts of obstruction of justice and one count of witness tampering.  DSD Shipping could be fined up to $500,000 per count, in addition to other possible penalties.  Gao, Chen and Zhong face a maximum penalty of 20 years in prison for the obstruction of justice charges

This case was investigated by the U.S. Coast Guard Sector Mobile, U.S. Coast Guard District Eight, CGIS and the EPA, Criminal Investigations Division.  Assistant U.S. Attorney Michael D. Anderson, with the U.S. Attorney’s Office for the Southern District of Alabama, and the Department of Justice’s Environmental Crimes Section Trial Attorney Shane N. Waller prosecuted the case.