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June 15, 2011

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Four Seamen Charged With Conspiring to Fraudulently Obtain Merchant Mariner Credentials

HOUSTON – In a first for the district, a vessel captain, an engineer, a first engineer and an able bodied seaman and dynamic position officer have been indicted for conspiring to manufacture and submit false documents to the National Maritime Center to upgrade their certifications, United States Attorney José Angel Moreno and Coast Guard Investigative Service (CGIS) Gulf Region Special Agent-in-Charge Damon Rodriguez announced today.

“A captain, engineer or other personnel manning a vessel who circumvent training and certification requirements presents a perilous situation for the crew of the vessel they man and to all other vessels navigating the waters in and around the United States,” said U.S. Attorney Moreno. “While the training and experience to obtain upgraded certifications is rigorous and time consuming, the process is necessary and required; as is the investigation and prosecution of those who seek to circumvent it .” 

The two-count federal indictment returned under seal on June 8, 2011, was unsealed today. Philip Jeffrey Stilwell, 46, an able bodied seaman and dynamic position officer unlimited formerly employed by Surf Subsea Inc., surrendered to federal authorities on Monday, June 13, and has been ordered released on bond. Dave Corven Welcome Sr., 52, an engineer, and Michael Wayne Dixon, 54, a first engineer, both also formerly employed by Surf Subsea Inc., surrendered to federal authorities in Houston yesterday and today, respectively. Each has made their initial appearances before U.S. Magistrate Judge Nancy Johnson and have been ordered released on bond pending trial. A warrant remains outstanding for Jay Allen Heater, 50, a vessel captain also formerly employed by Surf Subsea Inc.

The indictment charges all four defendants with conspiring to manufacture required training certificates to obtain upgrades to their existing Merchant Mariner Credentials. Stilwell and Heater are also charged with submitting false verification letters, fraudulently created and endorsed by Heater, to the Regional Exam Center in Houston. The charges are the result of a six-month federal investigation conducted by the CGIS of the Gulf Coast with the cooperation of Surf Subsea Inc., a company based in Magnolia, Texas. which employed all of the accused.

"To circumnavigate the very procedures designed to credential competent mariners, is indicative of the propensity to throw caution to the wind during vessel navigation on charted waterways,” said Rodriguez. “The potential for disaster is too great to allow unskilled mariners to fraudulently assume positions for which they are not qualified."

According to allegations in the indictment, between June 2010 and February 2011, Stilwell and Heater conspired to use a nation-wide office supply and printing center in Kansas City, Mo., to manufacture Large Offshore Supply Vessel, or OSV, Training Program Certificates bearing the logo of Otto Candies LLC. Otto Candies is a company located in Des Allemands, La., with a legitimate Coast Guard sanctioned Large OSV Training Program. The fraudulent certificates were then submitted to Coast Guard Regional Examination Centers (REC) in Houston, Miami, Fla., and New Orleans, La., with applications requesting upgrades to the existing Merchant Mariner Credentials for each of the accused, according to the indictment. RECs are the first stop toward obtaining Merchant Mariner Credential, Certificates of Registry and Standards of Training, Certification and Watch Keeping forms. RECs are responsible for the pre-screening of applications, administration of examinations and oversight of approved courses prior the mariner applications final submission to the National Maritime Center (NMC). The NMC is the licensing authority for the United States Coast Guard which must approve all applications and certifications for a seaman, engineer or captain of a vessel to be qualified and certified to man certain vessels. 

Heater allegedly produced and signed sea service verification letters for Stilwell indicating sea time experience on vessels belonging to companies for which Stilwell was not employed. Stilwell, in turn, allegedly submitted an application, containing the fraudulent sea time verification letters, to the Coast Guard Regional Examination Center in Houston requesting an upgrade to his existing Merchant Mariner Credential. According to the indictment, in August 2010, Stilwell sent an e-mail to Heater with a false Otto Candies Large OSV Training Program certificate (for chief engineer) for Welcome which was granted in September 2010. In December 2010, Dixon allegedly submitted an application through the REC in New Orleans for an upgrade which included a fraudulent Otto Candies Large OSV Training Program Certificate.

The upgrades in Merchant Mariner Credentials allegedly sought by the defendants would have allowed the accused to obtain more advanced positions they were not qualified to hold and higher pay within Surf Subsea Inc.

Each of the two counts alleged in the indictment carry a maximum punishment of five years in federal prison and a $250,000 fine upon conviction.

Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless and until convicted through due process of law.