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Air Duct Company And Its Owner Sentenced For Selling Diluted Pesticide With Forged Labels

LAS VEGAS, Nev. – A Las Vegas air duct company and its owner/president were sentenced today to fines and probation for making false statements to federal investigators and for manufacturing and selling thousands of gallons of misbranded and diluted pesticide between 2005 and 2010, announced Daniel G. Bogden, United States Attorney for the District of Nevada.  A company engineer was also sentenced for his role in the offense.

“The defendants knowingly produced and sold a misbranded pesticide, misleading their customers and potentially endangering the public,” said U.S. Attorney Bogden. “We are committed to the prosecution of this type of federal crime and the significant risk it poses to human health.”

DPL Enterprises Inc. (dba Air Care Indoor Quality Specialists), located at 3868 East Post Road, was sentenced to two years of probation and ordered to pay an $80,000 fine.  The company must also establish within 30 days a plan to assure that it is operating in full compliance of all environmental and occupational safety regulations.  It pleaded guilty in December 2012 to one felony count of making a materially false statement and two misdemeanor counts of misbranding of a pesticide. 

Richard Papaleo, 75, of Las Vegas, Nev., the company’s president and owner, was sentenced to two years of probation and ordered to pay a $15,000 fine.  Papaleo pleaded guilty in December to one felony count of making a materially false statement and two misdemeanor counts of misbranding of a pesticide. 

Michael Stanovich, 67, of Henderson, Nev., an engineer who worked at the company since 1991, was sentenced to one year of probation.   Stanovich pleaded guilty in December 2012 to two misdemeanor counts of misbranding of a pesticide.

According to the court records, Air Care was in the business of manufacturing and selling air duct cleaning equipment, filters and various chemical compounds, and it also ran its own air duct cleaning and repair operation. Air Care purchased and sold to its customers a disinfectant pesticide known as Sporicidin. Air Care diluted it with 10 times the amount of water, and sold the fake Sporicidin with a forged label that claimed that it could kill various organisms, including HIV, Avian Flu, Salmonella, Staph and MRSA.  Neither the diluted pesticide nor the label was approved by the EPA as required.  Air Care and Papaleo had been warned by the maker of Sporicidin as far back as 1998 that the company must obtain EPA approval for its label and that misbranding was “illegal.”  Air Care admitted to selling approximately 6,312 gallons of the misbranded and diluted pesticide between 2005 and 2010.

"When people purchase a product, they expect it to be genuine and that it will do what it's supposed to do," said Jay M. Green, Special Agent in Charge of EPA's criminal program in Nevada.  "Not only did the defendants dilute and repackage a legitimate product, the product in this case was a disinfectant often used in hospitals and posed a significant risk to human health. Anyone who knowingly misuses a pesticide is committing a crime and like any other violator, he or she will be prosecuted."

The government’s investigation was initiated after EPA received complaints from the maker of Sporicidin.  EPA made an undercover purchase of the fake Sporicidin sold by Air Care, and EPA’s National Enforcement Investigations Center (NEIC) laboratory in Colorado found that it was diluted with water even though the fake label made by Air Care claimed it contained the original strength of the active ingredient.  When federal agents from the FBI and from EPA’s Criminal Investigations Division questioned Papaleo about whether his company was selling the diluted chemical, he denied it.  

EPA regulates pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which makes it a crime manufacture a pesticide in the United States without first being registered with the EPA and obtaining from the EPA a manufacturer establishment number.  Approved labels must be affixed to any container of the pesticide that is distributed or sold.  A pesticide is deemed “misbranded” if among other things the labeling is false or misleading.  Misbranding pesticides is a misdemeanor offense.

The case was investigated by EPA’s Criminal Investigation Division with assistance from the FBI.  The case was prosecuted by Assistant U.S. Attorney Kathryn C. Newman and Richard A. Udell, a Senior Trial Attorney with the Environmental Crimes Section of the U.S. Department of Justice.

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