Baker man and trucking company ordered to pay $1.29 million, face prison for fraud and violating laws regulating transporting hazardous materials

BILLINGS – The U.S. Attorney’s Office announced today that Donald E. Wood, Jr., of Baker, and his trucking company, Woody’s Trucking LLC, were sentenced in U.S. District Court for convictions on multiple charges stemming from a 2012 explosion at an oil and gas processing facility in Wibaux, Montana.

U.S. District Judge Susan Watters sentenced Wood, 57, to 12 months and one day in prison and three years of supervised release.  Watters sentenced Woody’s Trucking to four years of probation.

Watters also ordered forfeiture of a personal money judgment of $644,689.70 and ordered restitution of $644,689.70. The monetary penalties total $1,289,370.40 to be paid by Wood and Woody’s Trucking.

A federal jury convicted Wood and his company on 13 of 14 counts after an eight day trial in May. Both defendants were convicted of conspiracy, wire fraud, mail fraud, obstruction of justice and hazardous materials shipping paper and placarding violations. The one count of acquittal related to a placarding violation.

In a sentencing memo, Assistant U.S. Attorney Bryan Dake said the case was about Wood “engaging in deceitful, fraudulent and dangerous conduct, manipulating his otherwise legitimate business practices, in order to line his own pockets.”

The case arose after a December 29, 2012 explosion at Custom Carbon Processing, Inc.’s facility in Wibaux, in which three employees were seriously injured. A driver for Woody’s Trucking had loaded natural gas condensate, or “drip gas,” from a pipeline station in Watford City, N.D., and hauled it to Custom Carbon Processing, a facility that processes and recycles slop oil.

Previous bills of lading that accompanied Woody’s shipments falsely identified the product as “slop oil and water,” which is a non-hazardous substance. On the date of the explosion, the driver was pumping from the truck’s front tank into the CCP facility, when flammable vapors from the drip gas ignited and caused an explosion, injuring three employees. The tanks on the truck burned for eight days. It was determined later that the truck contained drip gas and not slop oil and water. Drip gas is a hazardous material and the truck was not placarded to indicate it held a flammable liquid.

Witnesses at trial testified that Wood, the CEO of the trucking company, directed the driver to place a falsified bill of lading in the burned out truck several days after the explosion. The reason was to cover up the fact that the company was hauling drip gas without placards. The false bill of lading also was submitted to the company’s insurance company and to the Occupational Safety and Health Administration. In addition, the company had no insurance coverage for hauling drip gas.

Later, employees of the burned facility sued Woody’s Trucking, the owners of the CCP facility and others for negligence in a civil action. Woody’s submitted the lawsuit to its insurance company for payment of costs, attorney fees and payment of the eventual settlements to the injured workers. The insurance company agreed to settle the claims, but always maintained that Woody’s Trucking failed to disclose that it was transporting hazardous materials.

The insurance company made coverage related payments after the explosion on behalf of Woody’s Trucking. The company paid $644,689.70 for costs and fees associated with the explosion.

U.S. Attorney Kurt Alme said, “The defendants in this case cut corners to get ahead, and in doing so, endangered lives. For the safety of our citizens, this conduct cannot be permitted. I want to thank the prosecution team and the representatives from the Department of Transportation, Environmental Protection Agency and Department of Labor that coordinated on this important investigation.”

“We believe today’s sentencing sends a strong message to those responsible for properly handling and transporting hazardous material,” said Jeffrey Dubsick, Regional Special Agent in Charge for the U.S. Department of Transportation Office of Inspector General. “Working with our law enforcement and prosecutorial partners, we will continue our vigorous efforts to protect against those who would risk the safety of the public and the environment for personal gain.”

Susan Bodine, assistant administrator of EPA’s Office of Enforcement and Compliance Assurance, said, “The defendants in this case not only violated federal transportation regulations, but also tried to cover up their actions by providing first responders with falsified documents. Companies managing hazardous chemicals should take notice that EPA and our law enforcement partners will enforce laws designed to protect our communities and the environment from chemical accidents.”

Rita Lucero, regional administrator for OSHA’s Region VIII, said, “OSHA is very appreciative of the prosecution brought by the U.S. Attorney’s office in this case. OSHA, the Department of Justice and the Environmental Protection Agency will continue working together to bring employers to justice when they jeopardize the health and safety of their employees.”

Assistant U.S. Attorney Bryan Dake represented the U.S. Attorney’s Office at sentencing. Assistant U. S. Attorney Adam Duerk and Special Assistant U.S. Attorney Eric Nelson of the EPA tried the case.

The case was investigated by the U.S. Attorney’s Office, EPA’s Criminal Investigation Division, Department of Transportation’s Office of Inspector General and the Department of Labor’s Occupational Safety and Health Administration.

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