New London Manufacturing Company to Pay $1 Million for Violating the Clean Water Act

Deirdre M. Daly, United States Attorney for the District of Connecticut, Tyler Amon, Special Agent in Charge of EPA’s Criminal Investigation Division for New England, and Commissioner Robert Klee of the Connecticut Department of Energy and Environmental Protection announced that SHEFFIELD PHARMACEUTICALS, LLC, formerly known as Faria Limited, LLC, has entered into a deferred prosecution agreement with the government to resolve violations of the Clean Water Act.

In proceedings today before U.S. District Judge Alvin W. Thompson in Hartford, the government filed a criminal information charging SHEFFIELD PHARMACEUTICALS (“SHEFFIELD”) with violating the Clean Water Act.  As part of a deferred prosecution agreement, SHEFFIELD is required to commit no criminal conduct, comply with all applicable environmental laws and regulations, and pay $1 million, most of which will support environmental conservation projects in coastal Connecticut.  SHEFFIELD will make the payment in installments over a seven-year period.  If SHEFFIELD fully complies with this agreement, the information will be dismissed. 

The information and deferred prosecution agreement relate to the conduct of Thomas H. Faria, SHEFFIELD’s former president and chief executive officer, who pleaded guilty to a felony violation of the Clean Water Act on July 8, 2014.  From at least April 2004 to May 2011, under Faria’s leadership, SHEFFIELD discharged polluted industrial wastewater from its New London factory into the municipal sewage system without the required permit and industrial wastewater treatment system.  As a condition of his guilty plea, FARIA resigned from the company on March 7, 2014, and no longer has any role in its operations or management.  On February 13, 2015, Judge Thompson sentenced Faria to three years of probation, a $30,000 fine, and 300 hours of community service. 

According to court documents and statements made in court, the Clean Water Act requires that every company obtain a permit from the Connecticut Department of Energy and Environmental Protection (“CT DEEP”) before it can discharge industrial wastewater to the public sewage system, commonly known as the publicly owned treatment works (“POTW”).  Companies are also required, among other things, to test and monitor their industrial wastewater monthly to ensure that chemical levels in the wastewater do not exceed federal and state limitations.

SHEFFIELD has a factory at 170 Broad Street in New London that manufactures a wide range of over-the-counter pharmaceutical creams, ointments and toothpastes.  From approximately 1986 to July 2011, SHEFFIELD discharged industrial wastewater from its New London manufacturing operations to the New London POTW without a permit and in violation of Connecticut’s approved pretreatment program.  The New London POTW discharges to the Thames River in southeastern Connecticut.  During this entire time period, SHEFFIELD lacked a pretreatment system at its factory to treat its industrial wastewater prior to discharge, performed no regular monitoring of its discharges of industrial wastewater, and submitted no monthly monitoring reports to the CT DEEP.

After becoming the company’s president and chief executive officer in April 2003, Faria learned through his own employees that SHEFFIELD was discharging pollutants in its industrial wastewater without the required permit.  Faria also learned that in order to obtain a permit from CT DEEP, the company would have to install, at significant expense, a wastewater pretreatment system that would pretreat its industrial wastewater prior to discharging it to the New London POTW.  Although Faria’s own employees urged him to make the financial investment to bring the company into compliance, he chose not to do so.  Faria continued this illegal course even when four environmental consulting firms, which the company had hired, advised him that the discharge of industrial wastewater to the public sewage treatment system, without a pretreatment system and CT DEEP permit, is illegal.

On April 20, 2011, the CT DEEP conducted an unannounced inspection of SHEFFIELD.  After finding that the company had no wastewater discharge permits, the CT DEEP inspector issued a Notice of Violation and cited the company for discharging manufacturing and laboratory wastewater without a permit.  On or about May 27, 2011, SHEFFIELD submitted a permit application to CT DEEP.  In July 2011, the company installed a wastewater pretreatment system at its factory to pretreat the pollutants contained in its industrial wastewater prior to its discharge to the New London POTW. 

Currently led by a new management team, SHEFFIELD has remained compliant with the Clean Water Act.  The company’s current chief executive officer, Jeffrey Davis, is a former SHEFFIELD manager who personally urged Faria to bring the company into compliance with the Clean Water Act as early as 2005.  The company has also established a formal procedure to protect whistleblowers who come forward.

“Prior leadership at Sheffield took short cuts to save money by discharging polluted industrial wastewater into the public sewage system for years without the requisite treatment and regulatory permit,” said U.S. Attorney Daly.  With today’s disposition and the former chief executive’s felony conviction in 2014, we are confident that such short-sighted decisions are a thing of the past at Sheffield.  Simply put, sound environmental stewardship is good business for all companies and their employees.  Sheffield has agreed to pay $1,000,000, which includes a $150,000 fine and $850,000 to fund beneficial environmental projects in coastal Connecticut.  We thank our partners at the EPA and Connecticut’s Department of Energy and Environmental Protection for their outstanding partnership in this important prosecution.”

“This agreement demonstrates EPA’s commitment to protecting Connecticut’s environment and ensuring that all companies commit to the resources needed to keep pollutants from our systems,” said EPA Special Agent in Charge Amon.  “EPA’s Criminal Investigation Division will continue to work closely with the U.S. Attorney’s Office and CT DEEP to achieve this.”

“We take compliance seriously and it is important that Mr. Faria was held accountable for disregarding and defying environmental laws,” said Commissioner Klee.  “This action sends a strong message that ignoring environmental laws – and causing pollution of and damage to this state’s natural resources – carries significant consequences.”

This matter was investigated by the U.S. Environmental Protection Agency and the Connecticut Department of Energy and Environmental Protection.  The case was prosecuted by Assistant U.S. Attorney Hal Chen and Special Assistant U.S. Attorney Peter Kenyon.