Diana Shipping Services S.A. And Two Engineers Convicted In "Magic Pipe" Case

NORFOLK, Va. – Diana Shipping Services S.A., a Panamanian corporation,  Ioannis Prokakis, 61, and Antonios Boumpoutelos, 56, both citizens of Greece, were convicted today after a twelve-day bench trial on charges related to the illegal discharge of waste oil and oil-contaminated waste water from the M/V Thetis, a cargo vessel operated by Diana Shipping Services.

All the defendants were convicted of conspiracy, knowing failure to fully maintain an oil record book, falsification of records and concealing tangible object in a federal investigation.  In addition, Diana Shipping Services and Prokakis were also convicted of obstruction of justice.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia and Robert G. Dreher, of the Justice Department’s Environment and Natural Resources Division,  made the announcement after the verdicts were given by United States District Judge Mark S. Davis.

Diana Shipping Services, S.A. faces a maximum fine of $5.5 million and five years of probation.  Prokakis and Boumpoutelos face a maximum sentence of 5 years for the conspiracy conviction, 6 years per failure to maintain an oil record book conviction, and 20 years per falsification of record conviction.  Prokakis faces an additional 5 year sentence for obstruction of justice.  All three defendants will be sentenced on November 8, 2013.

Diana Shipping Services S.A., Prokakis, and Boumpoutelos, were indicted on May 22, 2013, in an eleven-count superseding indictment alleging the illegal discharging of waste oil and oil-contaminated waste water in violation of the Act to Prevent Pollution from Ships.  According to court records, in September 2012, crewmembers of the M/V Thetis, a cargo vessel operated by Diana Shipping Services, reported that the vessel was discharging its bilge waste and sludge illegally by various means, including a “magic pipe” that bypassed the oily water separator.  Coast Guard inspectors boarded the vessel when it entered port in Norfolk and discovered the “magic pipe” and that the oily water separator was non-functioning.  The inspectors were also presented with an oil record book that contained false entries made by the ship’s Chief Engineer, Ioannis Prokakis and the Second Engineer Antonios Boumpoutelos.  During the inspection, Prokakis lied to inspectors about the “magic pipe” and told other members of the engineering crew to not disclose its existence to the Coast Guard inspectors.

This case was investigated by the Coast Guard Investigative Service.  Assistant United States Attorney Joseph L. Kosky and Trial Attorney Kenneth E. Nelson with the Department of Justice’s Environment and Natural Resources Division, Environmental Crimes Section, are prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.