International Heating and Cooling Product Distributor Pleads Guilty and Sentenced for Illegal Purchase and Sale of Smuggled Ozone-Depleting Refrigerant Gas
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Maureen O’Mara, Special Agent in Charge, United States Environmental Protection Agency (EPA), Criminal Investigation Division, Atlanta Area Office, and Alysa D. Erichs, Special Agent in Charge, United States Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), announced today that defendant, FSD Group, LLC a Florida corporation with its headquarters in Miami, was convicted and sentenced in connection with the illegal receipt, purchase, and sale of ozone-depleting refrigerant gas that had been smuggled into the United States contrary to the Clean Air Act, in violation of Title 18, United States Code, Section 545.
FSD Group pled guilty to a one count Information filed against it before United States District Court Judge Joan Lenard, for knowingly receiving, buying, selling and facilitating the transportation, concealment, and sale of approximately 65,592 kilograms of the ozone-depleting substance hydrochlorofluorocarbon-22 (“HCFC-22") which had been illegally smuggled into the United States contrary to the Clean Air Act. HCFC-22 is a widely used refrigerant for residential heat pump and air-conditioning systems.
Immediately following the guilty plea, FSD Group was sentenced to three years of probation and ordered to pay a $100,000.00 criminal fine. In addition, as a special condition of probation, FSD Group was ordered to implement and enforce a comprehensive Environmental Compliance Plan. FSD Group was also ordered to forfeit to the United States $180,051.00, which represents proceeds received as a result of the crime and pay owed duties to the United States Customs and Border Protection for incorrectly classified merchandise.
Federal law prohibits dealing in merchandise that is imported contrary to law. The Federal Clean Air Act regulates air pollutants including ozone depleting substances such as HCFC-22. The Clean Air Act and its implementing regulations established a schedule to phase out the production and importation of ozone-depleting substances beginning in 2002, with a complete ban starting in 2030. To meet its obligations under an international treaty to reduce its consumption of ozone-depleting substances, the United States issued baseline allowances for the production and importation of HCFC-22 to individuals and companies. In order to legally import HCFC-22, you must hold an unexpended consumption allowance.
According to court records, FSD Group which also operates under the name Saez Distributors, is an international supplier and distributor of merchandise for heating, ventilation, air conditioning, and refrigerator systems, equipment and products including ozone-depleting substances. In business for thirty five years, and itself, an original allowance holder under the Clean Air Act, FSD had extensive knowledge regarding the Act’s rules and prohibition against purchasing illegally imported HCFC-22. During the course of the illegal conduct, in addition to its legal imports, FSD Group made additional purchases of HCFC-22 from various importers, knowing they did not hold the required unexpended consumption allowances, totaling approximately 65,592 kilograms, of restricted HCFC-22, with a fair market value of approximately $733,096.00.
United States Attorney Wifredo A. Ferrer stated, “The regulatory program here is intended to protect us all from the harmful effects associated with depletion of the earth’s ozone layer. By aggressively supporting the investigative agencies in their efforts to enforce federal laws that seek to protect our environment, we are both meeting our country’s commitment and responsibility to our future generations and the international community.”
EPA SAC Maureen O’Mara said, “HCFC’s deplete the stratospheric ozone layer, which is critical to life on earth and protecting people from the harmful effects of ultraviolet radiation, including cancer. EPA will continue working with ICE and other agencies to combat such criminal conduct, preventing these dangerous smuggling and distribution operations, and curbing the world-wide threat of stratospheric ozone depletion. This plea and sentence, the first of its kind against an allowance holder, sends a strong message that those who jeopardize public safety in order to make illegal profits will be vigorously prosecuted and punished.”
“EPA realizes that as HCFCs are phased out domestically, smuggling is likely to rise, jeopardizing human health and our atmosphere. This is why EPA is working harder than ever, in cooperation with our federal partners, to seek justice against those that not only illegally import R-22, but also knowingly purchase contraband material,” said Drusilla Hufford, Director of EPA’s Stratospheric Protection Division.
“The unlawful importation of goods poses a significant threat to the national security, public safety, and in this particular case, the illegal importation posed a global hazard to our environment,” said Alysa D. Erichs, Special Agent in Charge of HSI Miami. “We will continue to vigorously investigate those who are determined to line their pockets with the proceeds of crimes against the environment.”
This matter and others involving the smuggling and distribution of ozone-depleting substances are being investigated through a multi-agency initiative known as Operation Catch-22. Operation Catch-22 has, to date, including the successful conviction of nearly a dozen individuals and corporations at every level of the refrigerant gas smuggling and distribution chain.
Mr. Ferrer commended the investigative efforts of the EPA, ICE-HSI, the Florida Department of Environmental Protection, Criminal Investigation Bureau, and the Miami-Dade Police Department. The case was prosecuted by Special Assistant U.S. Attorney Jodi A. Mazer.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.