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Ship’s Owner and Operator Ordered to Pay $1.3 Million Fine and $200,000 Community Service Payment for Violating Pollution Laws, Falsifying Records and Scheming to Defraud the U.S.

For Immediate Release
Office of Public Affairs

Ship Discharged Oily Waste on Voyage from China to Seattle; False Log Books given to Coast Guard Inspectors

The companies that own and operate a Greek shipping vessel were sentenced today in U.S. District Court in Seattle, Washington, to a $1.3 million fine for the dumping of oily waste at sea, announced U.S. Attorney Annette L. Hayes for the Western District of Washington.  The ship operator, Angelakos (Hellas) S.A., and the ship owner, Gallia Graeca Shipping Ltd., were found guilty in June 2016 of violating the Act to Prevent Pollution from Ships, Falsification of Records in a Federal Investigation and engaging in a Scheme to Defraud the United States.   In imposing the monetary penalty, U.S. District Judge John C. Coughenour for the Western District of Washington said he hoped the sanctions “would resonate and cause other companies to pause when they think about creating a corporate culture that encourages deception.”

“These companies promoted a culture of lies and lawlessness that left a trail of pollution in the Pacific Ocean,” said U.S. Attorney Hayes.  “Knowing that the Coast Guard was going to do an inspection of their shipping vessel, corporate managers allowed the Chief Engineer to present falsified documents.  The significant fines imposed in this case send a clear message that those who spoil our environment by putting their business interests ahead of our laws will be held responsible.”

According to records filed in the case and testimony at trial, a cargo ship named the M/V Gallia Graeca travelled from China to Seattle in October 2015.  During the voyage, a pollution-control device known as an oil water separator was inoperable.  On Oct. 16, 26 and 27, 2015, the defendants discharged overboard approximately 5,000 gallons of oily bilge water.  The defendants concealed these incidents from the Coast Guard by making false statements to inspectors and making false statements and omissions in the ship’s oil record book.  When Coast Guard inspectors asked the engineers to operate the oil water separator during the inspection, the engineers did so in such a way that the equipment appeared to be working properly even though it was not.

When Coast Guard inspectors examined the oil water separator they found its filters were clogged with oil and found oil residue in the overboard discharge piping.  Records indicated the oil water separator had not been serviced for months prior to the voyage from China.  The defendants presented the Coast Guard with an official oil record book stating that bilge water had not been discharged during the voyage to Seattle.  However, the Coast Guard investigation discovered evidence that oily water had been discharged into the sea three times on its voyage from China.

Calling it “a voyage of deception and pollution,” prosecutors argued that the engineers tried to hide the pollution from the Coast Guard to avoid having the ship detained in Seattle.  Keeping the ship on schedule was a benefit to the owners and operators who had a contract to move $25 million in goods out of Seattle.  Shipping company executives had been in contact with the engineers about how they should present the log book for the Coast Guard inspection.

“Through strong partnerships with the Department of Justice, the U.S. Attorney’s Office and our Coast Guard Investigative Service, this case demonstrates our commitment to hold accountable shipping companies engaged in illegal activities,” said Captain Joe Raymond, Coast Guard Captain of the Port Puget Sound.  “The Coast Guard will protect our marine environment through coordination with international, national, regional and local partners and will promote sustainable development of our nation’s ocean resources by enforcing pollution prevention laws and regulations and maintaining a robust vessel inspection program.”

The companies were placed on five years of probation and required to have environmental compliance plans in place which will ensure they are abiding by anti-pollution policies and regulations.

In addition to the $1.3 million fine, U.S. District Judge Coughenour ordered a $200,000 community service payment to be shared between the National Fish and Wildlife Foundation and the National Parks Foundation.  The National Fish and Wildlife Foundation is a congressionally-chartered non-profit organization that works to “further the conservation and management of fish, wildlife, plants and other natural resources.”  The payment will go to fund marine restoration and preservation projects in the Pacific Ocean, the site of defendants’ pollution.  The National Parks Foundation does significant ocean beach clean-up – particularly on the ocean beaches of Washington’s Olympic Peninsula.

The two engineers who operated the ship’s equipment and falsified the log books were sentenced to short prison terms before returning to Greece.

The case is being prosecuted by Assistant U.S. Attorneys Seth Wilkinson and Matthew Diggs and by Special Assistant U.S. Attorney Stephen Bor.  Special Assistant U.S. Attorney Bor is an attorney with the U.S. Coast Guard specially appointed to prosecute criminal cases in federal court.

The case is being investigated by the U.S. Coast Guard and the Environmental Protection Agency Criminal Investigation Division.

Updated March 23, 2017