Corporate Crime Case Database

On September 10, 2024, a court sentenced Rudy’s Performance Parts, Inc. (Rudy’s), for manufacturing, selling devices, commonly known as “defeat devices,” used to remove or disable required emissions controls in motor vehicles.

Rudy’ s pleaded guilty to conspiracy to violate the Clean Act (18 U.S.C § 371) and was ordered to pay a $2.4 million fine and complete a three-year term of probation. Rudolf, the company sole owner and chief executive officer, previously pleaded guilty for conspiring to violate the Clean Air Act by tampering with monitoring devices on approximately 300 diesel trucks, which involved the installation of defeat devices on those trucks. Rudolf was sentenced in April 2024 to three years of probation and ordered to pay a $600,000 criminal fine.

Separate from the criminal actions, the Justice Department, on behalf of the Environmental Protection Agency (EPA), filed a civil suit in 2022 against Rudy’  s and Rudolf for violating the Clean Air Act by manufacturing, selling and installing defeat devices and failing to adequately respond to the EPA’  s formal requests for information. Under a consent decree filed July 29, Rudy’  s and Rudolf will pay a $7 million civil penalty for those violations. The consent decree would also prohibit them from making, selling, offering to sell and installing defeat devices, transferring intellectual property that would allow others to make or sell defeat devices and investing in or profiting from defeat devices manufactured or sold by other businesses. The decree is subject to court approval.

Rudy’ s manufactured and sold aftermarket defeat devices, known as tuners, that tampered with motor vehicles’  on-board diagnostic systems (OBDs). Between 2015 and 2018, Rudy’ s sold approximately 43,900 such tuners, generating about $33 million in revenue.

The civil lawsuit alleges that from at least 2014 through mid-2019, Rudy’ s and Rudolf manufactured and sold more than 250,000 products designed to remove or disable EPA-mandated emissions controls. These products included hardware parts such as plates that block a vehicle’ s exhaust gas recirculation system and pipes that replace pollution treatment components in a vehicle’ s exhaust system.

The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

On September 4, 2024, the Court revoked the previous term of probation for Empire Bulkers Ltd., finding the company guilty of two probation violations. The court imposed enhanced supervision to include one additional year of probation (extending the four years of supervision to the maximum of five years), requiring additional ship audits during the fourth year, and annual office audits by the court appointed monitor/third-party auditor (CAM/TPA) that were not previously required.

In the first violation, the Court found that Empire had failed to promptly notify the Court Appointed Monitor of allegations of new MARPOL violations on another one of the company’ s ships. The Second Engineer of the M/V Panagiotis alleged that the Chief Engineer was involved in deliberate overboard discharges that violated MARPOL. The company’ s compliance manager and its attorney interviewed crew members and took statements but waited 14 days before Empire notified the CAM and DOJ. When it did so, it submitted information that sought to discredit the whistleblower. And, prior to notifying the CAM and DOJ, all those serving in the engine department, including the Chief Engineer and the whistleblower, were dismissed.

The CAM informed the Court that the defendant’ s delay and dismissal of the crew made it impossible to conduct an independent investigation. Under these circumstances, the Court held that the 14-day delay was not prompt as required by the Environmental Compliance Plan (ECP). The Marshall Islands registry, where the ship was flagged, subsequently determined that intentional overboard discharges of oil-contaminated bilge waste took place without the use of required pollution prevention equipment and that these improper discharges were not recorded in the ship’ s Oil Record Book, thus verifying the whistleblower’ s allegations.

In the second violation, Empire was convicted of changing its corporate organization and chain of command without notifying the Court’ s Monitor and without going through a required process of modifying the ECP. Specifically, the ECP required by the Court stipulated that the company must have a compliance manager that reported to the company’ s managing director. The position of managing director was eliminated without informing the Monitor, Office of Probation, or DOJ. The company’ s compliance manager now reports to a committee on which he sits with other mid-level managers rather than to the highest levels of Empire Bulkers which was intended to assure accountability.

In the underlying case, Empire Bulkers, the operator of the M/V Joanna, and Joanna Maritime Ltd., the owner, each pleaded guilty to violating the APPS and the Ports and Water Ways Safety Act (PWSA) (33 U.S.C. § 1908; 46 U.S.C. § 70036). The APPS violation involved overboard discharges of oil contaminated waste while bypassing the ship’ s Oily Water Separator (by inserting a piece of metal into the Oil Content Meter so that it only detected clean water instead of the actual discharge effluent). Crew members also falsified the Oil Record Book, a required log. The PWSA violation involved the failure to immediately report a hazardous condition that affected the safety of the ship and threatened U.S. ports and waters. The hazard was an active fuel oil leak in the ship’ s purifier room and disabling the fuel oil heater pressure relief valves, an essential safety feature designed to prevent catastrophic fires and explosions. Empire Bulkers, and the ship’ s operator were originally sentenced in January 2023 and ordered to pay a $2 million fine and complete a four-year term of probation subject to the terms of a government approved ECP that required independent inspections by a TPA and supervision by a CAM.

On August 27, 2024, Quality Poultry and Seafood (QPS), sales manager Todd Anthoney Rosetti, and business manager James William Gunkel, pleaded guilty to charges stemming from the sale of mislabeled seafood. Sentencing is scheduled for December 11, 2024.

QPS sells poultry and seafood to a few hundred Mississippi-area restaurants, casinos, and grocery stores, and operates its own retail market and cafe. It is the largest seafood distributor on the Mississippi Gulf coast. From 2002 through 2019, QPS sold to its retail customers mislabeled seafood and sold to its wholesale customers fish that QPS either fraudulently mislabeled or offered to restaurants as convincing substitutes for the preferred local species that the restaurants advertised, identified in their menus, and charged their customers for serving. For more than a year following the execution of a search warrant, QPS continued to sell frozen fish imported from Africa, South America and India for use as substitutes for local premium species.

QPS pleaded guilty to conspiring to misbrand food with the intent to defraud and for the use of interstate wire transmissions to facilitate the sale of misbranded fish (18 U.S.C. §§ 371, 1343; 21 U.S.C. §§ 331(k), 333(a)(2)). QPS Sales Manager Todd Anthony Rosetti, and Business Manager James William Gunkel pleaded guilty to seafood misbranding (21 U.S.C. §§ 331(k), 343(a), (b), 333(a)(1)).

Co-defendant’s Mary Mahoney's Old French House restaurant (Mahoney's) and co-owner Charles Cvitanovich previously pleaded guilty for their involvement in the scheme. Mahoney’s pleaded guilty to conspiracy to misbrand seafood and wire fraud. Cvitanovich pleaded guilty to misbranding seafood (18 U.S.C. §§ 371, 1343; 21 U.S.C. §§ 331(k), 333(a)(2)). Mahoney’s and Cvitanovich are scheduled for sentencing on November 18, 2024.

Between December 2013 and November 2019, Mahoney and co-conspirators fraudulently sold approximately 58,750 pounds (more than 29 tons) of fish that was frozen and imported from Africa, India, and South America as local premium species. Between 2018 and 2019, Cvitanovich mislabeled approximately 17,190 pounds of fish sold at the restaurant. QPS supplied seafood to Mahoney’s and many other restaurants and retailers.

The U.S. Food and Drug Administration Office of Criminal Investigations conducted the investigation.
 

On August 20, 2024, Domermuth Environmental Services, LLC, (DES) and Christopher Domermuth pleaded guilty to violating the Clean Water Act for knowingly discharging pollutants into a water of the United States without a permit (33 U.S.C. §§ 1311, 1319(c)(2)(A)). Sentencing is scheduled for December 12, 2024.

On July 26, 2018, a pole camera installed on property adjacent to the DES facility filmed workers rolling over a previously exhumed underground storage tank, which spilled a mixture of petroleum and water onto a concrete pad at the facility. The workers, including Christopher Domermuth, threw absorbent pads into the spilled mixture and then used a portable pump to pump the oily mixture over a retaining wall at DES. The oily mixture flowed over a neighboring property and into a culvert leading to the Holston River, a tributary of the Tennessee River. 

The U.S. Environmental Protection Agency Criminal Investigation Division, the EPA Office of Inspector General, the Federal Bureau of Investigation, the Tennessee Valley Authority Office of Inspector General, and the Tennessee Department of Environment and Conservation conducted the investigation.

Sioux Erosion Control, Inc., BG Dale Biscoe (part owner and Vice President), and Randall David Shelton (estimator) are charged with participating in a conspiracy to suppress and eliminate competition by fixing prices and rigging bids for erosion control products and services, including solid slab sodding, in and around Oklahoma. The charged period begins at least as early as September 2017 and continues until as late as April 2023.

Juan Carlos Aponte Tolentino, formerly Interim President of a steel distributor in San Juan, Puerto Rico, knowingly entered into a conspiracy with competitors to suppress and eliminate competition by fixing wholesale prices for rebar distributed to hardware stores, contractors, and other businesses and individuals in Puerto Rico. The charged conspiracy began in January 2015 and continued until November 2022. Aponte pleaded guilty to the conspiracy charge on August 7, 2024. His sentencing hearing is scheduled for November 8, 2024.

On August 6, 2024, a court sentenced Northridge Construction Corporation to pay a $100,000 fine and complete a five-year term of probation. The company pleaded guilty to violating the Occupational Safety and Health Act (OSHA) causing the death of a company employee (29 U.S.C. § 666(e)). Supervisor Richard Zagger pleaded guilty to conspiracy and obstruction of official proceedings (18 U.S.C. §§ 371, 1505). Zagger is scheduled for sentencing on October 16, 2024.

In 2018, a Northridge employee died after falling from an improperly secured roof during the construction of a shed. Zagger oversaw the project as Northridge employees built a metal shed on the Northridge property. During the construction, one of the employees fell from the improperly secured roof and died from his injuries.

OSHA regulations require companies and employers to maintain the stability of a metal structure during construction. Northridge pleaded guilty to violating this worker safety standard and to making two false statements that obstructed OSHA’s investigation into the employee’s death.

The Occupational Safety and Health Administration conducted the investigation.

On July 30, 2024, a court sentenced Barry Pierce and his two companies, GDP Tuning and Custom Auto of Rexburg, d/b/a Gorilla Performance for tampering with e missions control systems and selling tampering software. Pierce will serve four months’  incarceration. GDP Tuning and Gorilla Performance will complete five-year terms of probation. All defendants were ordered to jointly pay a $1 million fine.

Between 2016 and 2020, the defendants tampered with a required monitoring device by removing emissions control devices (often referred to as “ deleting” ) from more than 200 diesel trucks and reprogrammed (“ tuned” ) the onboard diagnostic systems to enable them to function without the emissions equipment. Pierce told Environmental Protection Agency (EPA) inspectors in 2018 that his companies sold kits to delete trucks and products to tune them, including tunes and tuners. In response to EPA’ s later follow-up, GDP Tuning produced sales data indicating that it sold more than 20,000 tuning products for approximately $14 million in revenue acquired between January 2018 and August 2019.

The defendants pleaded guilty to violating the Clean Air Act (18 U.S.C. § 371; 42 U.S.C. § 7413).

The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

On June 27, 2024, a court sentenced Boyd Farm LLC and its owner Frazier T. Boyd, III, for filling wetlands in violation of the Clean Water Act (CWA) in Goochland and Louisa Counties, Virginia (33 U.S.C. §§ 1319(c)(2)(A), (c)(1)(A)). The company will pay a $300,000 fine and complete a one-year term of probation. Boyd was sentenced to 30 days home confinement and a year of probation.

Between 2017 and 2019, Boyd and his company directed workers to excavate, remove vegetation, and grade land at three sites in Virginia’s Piedmont region. The work left behind piles of dirt, stumps, and woody debris (known as slash). Operators hired by Boyd Farm then placed debris from those piles into wetlands and streams at the properties. The defendants did not obtain the proper permits for this activity despite knowing they were required to do so. In 2015, the Environmental Protection Agency issued Boyd Farm an Administrative Order requiring compliance with the CWA, including restoring impacted wetlands and streams at another property in Goochland County where unpermitted discharges had occurred.

The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation, with assistance from the Virginia Department of Environmental Quality.

On June 13, 2024, a court sentenced Tip the Scale LLC, dba LD Kitchen and Bath (LDKB) following the acceptance of its guilty plea. The company will pay a $110,000 criminal fine into the Lacey Act Reward Fund and an additional $250,000 administrative Customs penalty. LDKB also will complete a three-year term of probation and implement an environmental compliance plan. LDKB pleaded guilty to a one-count information charging importation by means of false statements for falsely declaring timber imports (18 U.S.C. § 542).

LDKB is an importer and retailer of wood cabinets and vanities based in Tacoma, Washington. Starting in early 2020, LDKB declared imports of wooden cabinets as various false species of timber that had been harvested and exported in Malaysia. By doing so, the company evaded more than $800,000 in duties on Chinese-produced cabinets. Investigation and forensic testing at the U.S. Fish and Wildlife Laboratory showed that, the cabinets and vanities were made from temperate species that did not grow in Malaysia, and that the products had been exported from China. As part of the agreement, LDKB has paid more than $800,000 in outstanding duties, and forfeited three shipping containers of wooden cabinets, that were donated to a local chapter of Habitat for Humanity.

The U.S. Fish and Wildlife Service Office of Law Enforcement and Homeland Security Investigations conducted the investigation.

On June 3, 2024, Envigo RMS, LLC pleaded guilty to conspiring to knowingly violate the Animal Welfare Act (AWA), and Envigo Global Services, Inc., pleaded guilty to conspiring to knowingly violate the Clean Water Act (CWA) (18 U.S.C. § 371; 33 U.S.C. §§1311, 1319(c)(2)(A), 7 U.S.C. § 2149(d)). This case is related to the breeding, export, and sale of dogs for medical and scientific research purposes from a dog breeding facility located in Cumberland County, Virginia. In May 2022, officials rescued more than 4,000 beagles from the premises.

As part of the resolution, Inotiv, the parent corporation of Envigo RMS and Envigo Global Services, will guarantee more than $35 million in payments, be subject to increased animal care standards and engage a compliance monitor. This resolution marks the largest agreed-to fine in an AWA case. Sentencing is scheduled for October 7, 2024.

Envigo RMS violated the AWA by failing to provide, among other things, adequate veterinary care, adequate staffing, and safe living conditions for dogs housed at the Cumberland County facility. In addition, Envigo Global Services violated the CWA by failing to properly operate and maintain the wastewater treatment plant at the Cumberland County facility, which led to massive unlawful discharges of insufficiently treated wastewater into a local waterway and also impacted the health and well-being of the dogs at the facility.

Under the terms of the plea agreement, the entities will complete between three and five years of probation and pay a total criminal fine of $22 million. In addition, the entities will pay approximately $1.1 million to the Virginia Animal Fighting Task Force and approximately $1.9 million to the Humane Society of the United States for direct assistance provided to the investigation.

An additional $3.5 million will be paid to the National Fish and Wildlife Foundation to benefit and restore the environment and ecosystems in Cumberland County, at least $500,000 of which will be spent on purchasing riparian wetland or riparian land located in or near Cumberland. They also will spend at least $7 million to improve their facilities and personnel over and above the standards required by the AWA.

The U.S. Department of Agriculture Office of Inspector General and the U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation, with assistance from the Virginia State Police.