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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Ohio

Friday, July 7, 2017

Cleveland man sentenced to nearly five years in prison for violating Clean Air Act, illegally dumping garbage

A Cleveland man was sentenced to nearly five years in prison and ordered to pay $7.8 million in restitution for violating the Clean Air Act by failing to remove asbestos prior to demolishing a former factory in Cleveland, Acting U.S. Attorney David A. Sierleja said.

Christopher Gattarello, 53, and Robert A. Shaw, Sr., 77, of Ypsilanti, Michigan also defrauded a Louisiana company out of $1.1 million. Shaw was sentenced to a year in prison.

U.S. District Judge Donald C. Nugent sentenced Gattarello to 57 months in prison. He ordered restitution of $5.9 million to the city of Cleveland to clean the site, nearly $800,000 to the U.S. EPA for work already done on the site, and $1.1 million to the defrauded Louisiana company.

“Mr. Gattarello created a garbage dump in a residential neighborhood near a school, which remains an environmental hazard,” Sierleja said. “He has caused irreparable harm and deserves this punishment.”

“The defendants in this case put unsuspecting workers at great risk and threatened the health and safety of the community when they failed to follow proper procedures for removing asbestos,” said Scot Adair, Acting Special Agent in Charge of EPA’s criminal enforcement program in Ohio. “This case demonstrates that EPA and its law enforcement partners will prosecute those who willingly break environmental laws in an attempt to cut costs.”

“Our goal is to protect Ohio’s families, and we work hard to ensure that people who commit crimes are held accountable for their actions,” Ohio Attorney General Mike DeWine said. “Collaboration among agencies, which occurred in this case, is so important.”

“Let these sentencings stand as a warning to those who victimize the public that whether you are the main perpetrator of a fraud, or merely assist in its facilitation, the law will hold all guilty parties accountable,” said Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “The successful prosecution of these individuals is a direct result of the excellent partnership that federal, state and kocal law enforcement has in combating violations of federal law."

According to court documents and testimony:

Gattarello owned and controlled several garbage-hauling businesses in Cleveland, including Reach Out Disposal, All Points Rubbish Disposal and Axelrod Rubbish Recycling. Shaw worked for Gattarello at those companies, while William Jackson operated a Cleveland building demolition company.

Gattarello leased the former National Acme facility on East 131st Street in Cleveland in 2011. The 570,000 square-foot facility was built in 1917 and was used for manufacturing for nearly a century. It is located near many homes and a school. Gattarello represented that paper and cardboard waste would be recycled at the facility. Removing asbestos from the facility would cost an estimated $1.5 million.

Gattarello directed paper and cardboard waste, as well as municipal garbage, be delivered to the facility for recycling. Over the next several months, more garbage, paper and cardboard were delivered than could be handled, and Gattarello had the waste moved inside. By 2012, most of the facility was filled with garbage.

Gattarello entered into a contract to purchase the facility in May 2012. He intended to demolish the facility and sell any metal removed as scrap.

In July 2012, Jackson submitted a notice of demolition with Cleveland stating there was no asbestos in the National Acme facility. About 10 days later, the city rejected Jackson’s notice and stated demolition could not begin until proper notice was submitted and approved. About 10 days after that, on July 21, 2012, Jackson began demolition at Gattarello’s direction.

Asbestos fibers were released into the environment during demolition. Debris accumulated outside the facility and asbestos in the piles were exposed to the wind and elements.

Jackson had pleaded guilty to related charges and is awaiting sentencing

Gattarello and Shaw also admitted to defrauding AIM Business Capital LLC. The Lousiana company specializes in “factoring” – a practice in which AIM purchases accounts receivable, such as invoices billed to customers for goods and services. Businesses that factored their receivables with AIM received immediate cash. AIM purchased the receivables at a percentage discount of the invoice. AIM made a profit by collecting the full amount of the invoice from the business’s customers.

Shaw entered into contracts with AIM for the purchase of receivables from Reach Out and Axelrod in 2011 and 2012. Gattarello directed the creation of false and fraudulent invoices for the companies and directed that they be submitted to AIM. In some cases, Gattarello and Shaw directed other employees to create false letters attesting to the validity of the invoices, which Shaw forwarded to AIM. The loss to AIM was $1.1 million.

The case is being prosecuted by Assistant U.S. Attorneys Brad Beeson and Chelsea Rice following an investigation by the U.S. and Ohio Environmental Protection Agencies, the Ohio Bureau of Criminal Investigation and the Internal Revenue Service.

Financial Fraud
Mike Tobin 216.622.3651
Updated July 7, 2017