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Corpus Christi Day Cruise LTD. Pleads Guilty to Obstructing
U.S. Coast Guard Investigation of M/V Texas Treasure

Chief Engineer Pleads Guilty to Lying to Coast Guard Inspectors

WASHINGTON, D.C. – Corpus Christi Day Cruise, Ltd., operator of the M/V Texas Treasure, has pleaded guilty to obstructing a U.S. Coast Guard investigation into whether the ship had illegally discharged waste oil and deliberately bypassed its pollution prevention equipment, the Justice Department announced today. The ship’s chief engineer, Gojko Petovic, has also pleaded guilty to making false statements to U.S. Coast Guard inspectors regarding the existence of tank sounding records and then attempting to destroy the records in order to prevent their discovery by inspectors. Sentencing is scheduled for April 25, 2006.

According to the plea agreement, on October 25, 2004, U.S. Coast Guard inspectors from the U.S. Coast Guard Sector in Corpus Christi, conducted a Port State Control Examination of the M/V Texas Treasure to determine the ship’s compliance with international and U.S. environmental laws and related regulations. Based on their observations, including the discovery of a significant amount of oil in the discharge piping of the ship’s Oily Water Separator, inspectors suspected that the ship was bypassing its Oily Water Separator and directly discharging oil waste overboard. Inspectors also reviewed oil-waste tank sounding records for the month of October and discovered several inconsistencies in the records.

As a result, inspectors asked the ship’s Chief Engineer, Gojko Petovic, to produce oil-waste tank sounding records for the months prior to October to compare them with the ship’s Oil Record Book. If the Oil Record Book is accurately maintained, the data in the Oil Record Book concerning the quantity of oil-waste onboard the vessel should correlate to the data in the sounding records. Chief Petovic stated that the ship only maintained tank sounding records for thirty days after which time they were destroyed. However, a subsequent review of Chief Petovic’s computer revealed that tank sounding records existed dating back to December 2003, and that Chief Petovic intentionally deleted these records on October 29, 2004, while U.S. Coast Guard investigators were on the ship to examine his computer. A review of the tank sounding records indicates that they are inconsistent with the ship’s Oil Record Book.

“Vessel pollution is a serious and persistent problem and deliberate attempts to obstruct the Coast Guard's efforts to ensure compliance with the law will not be tolerated,” said Sue Ellen Wooldridge, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Through our vessel pollution initiative, we are working with the United States Coast Guard aggressively to prosecute cases of deliberate pollution and related cover-ups and to deter future violations of the law.”

Engine room operations on ships such as the M/V Texas Treasure—a Bahamian flagged ship that operated gambling cruises out of Port Aransas, Texas—generate large amounts of waste oil and oil-contaminated bilge waste. International and U.S. law prohibit the discharge of waste containing more than 15 parts per million oil without treatment by an Oily Water Separator and oil sensing equipment—a required pollution prevention device. International and U.S. law also requires that all overboard discharges be recorded in an Oil Record Book.

“This case was resolved through excellent partnership between the regulatory and enforcement divisions of the U.S. Coast Guard and also the dedicated pursuit of justice by the U.S. Attorney's Office and the Department of Justice,” said Donald G. Lane, Special Agent-in-Charge, Coast Guard Investigative Service Gulf Region. “The Coast Guard Investigative Service is fully committed to investigating and resolving all criminal allegations of violations of environmental and regulatory statutes.”

Under the terms of the proposed plea agreement, which must be approved by the Court, Corpus Christi Day Cruise, Ltd. will pay a criminal fine in the amount of $300,000 and institute an Environmental Compliance Plan to ensure that the ship properly manages its oil waste in the future.

This investigation was conducted by the Coast Guard Investigative Service, with assistance from the U.S. Coast Guard District Legal Office and from Coast Guard Headquarters Office of Investigations and Analysis. The case is being prosecuted by the U.S. Department of Justice Environmental Crimes Section and the U.S. Attorneys Office for the Southern District of Texas.