Corporate Crime Case Database

On October 25, 2024, a court sentenced Gremex Shipping S.A. de C.V. (Gremex) to pay a $1.75 million fine, serve a four-year term of probation, and implement an environmental compliance plan. The shipping corporation pleaded guilty to violating the Act to Prevent Pollution from Ships (APPS) for failing to maintain an accurate oil record book (ORB) (33 U.S.C. § 1908(a)).

Gremex is a Mexican corporation that managed several ships including the M/V Suhar. The Suhar is a 7,602 gross ton Panamanian-flagged ocean-going bulk carrier that routinely hauled cement from Tampico, Mexico, to Pensacola, Florida. Gremex was responsible for the Suhar’s day-to-day operations, including hiring all crew, and ensuring compliance with all environmental and international regulations.

The Coast Guard inspected the ship when it arrived in Pensacola on August 25, 2023. Inspectors determined that the vessel’s crew regularly discharged untreated oily bilge water overboard, bypassing onboard pollution control equipment, and falsified the ship’s ORB to conceal these discharges.

The U.S. Coast Guard Investigative Service conducted the investigation.

On October 10, 2024, AM/NS Calvert LLC (AM/NS), a steel production facility pleaded guilty to violating the Clean Air Act (42 U.S.C. § 7413(c)(2)(B)). The court also sentenced the company to pay a $750,000 fine and complete a three-year term of probation.

AM/NS is a joint venture by ArcelorMittal and Nippon Steel operating in Calvert, Alabama. It held a Clean Air Act permit issued by the Alabama Department of Environmental Management. The permit required the treatment of certain air emissions for chlorine. AM/NS determined in 2015 that it could not achieve emissions within regulatory limits using water and switched to a caustic solution with ADEM's approval.

AM/NS stopped using a caustic solution and switched back to using water in early 2017, after it determined that the caustic solution was incompatible with piping material in use, and that pipes were failing which necessitated expensive repairs. In August 2017, ADEM and EPA conducted an inspection at AM/NS finding at that time that the company was no longer using caustic solution, which was necessary for emissions to be within regulatory limits.

The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

On October 10, 2024, the Department of Justice announced that TD Bank N.A. (TDBNA), the 10th largest bank in the United States, pleaded guilty to conspiring to: fail to maintain an anti-money laundering (AML) program that complies with the Bank Secrecy Act (BSA); fail to file accurate Currency Transaction Reports (CTRs); and launder monetary instruments. TDBNA’s parent company, TD Bank US Holding Company (together with TDBNA, “TD Bank”) simultaneously pleaded guilty to related charges. Between January 2014 and October 2023, TD Bank failed to update its anti-money laundering compliance program to address known risks. Instead, senior executives at TD Bank prioritized adhering to the bank’s “flat cost paradigm” and creating a convenient “customer experience” over maintaining an adequate AML program. From 2014 through 2022, TD Bank failed to add any new scenarios to its transaction monitoring program despite known deficiencies, emerging money laundering risks, and the introduction of new products and services. Throughout this time, TD Bank intentionally excluded all domestic automated clearinghouse (ACH) transactions, most check activity, and numerous other transaction types from its automated transaction monitoring system, resulting in 92% of total transaction volume going unmonitored from Jan. 1, 2018, to April 12, 2024. This monitoring gap amounted to approximately $18.3 trillion in transaction activity. TD Bank’s failures enabled three money laundering networks, one of which was assisted by five TD Bank employees, to collectively transfer more than $670 million through TD Bank accounts between 2019 and 2023. As part of its plea agreement, TD Bank will pay a combined $1.8 billion in penalties, enhance and remediate its AML compliance program, and retain an independent monitor. This is the Department’s largest penalty ever imposed under the BSA and the first time a national bank has pleaded guilty to conspiring to launder money. This prosecution was led by the Criminal Division’s Money Laundering and Asset Recovery Section and the U.S. Attorney’s Office for the District of New Jersey.

On September 26, 2024, a court sentenced Prive Shipping Denizcilik Ticaret and Prive Overseas Marine to pay a total of $2 million in criminal penalties to include a $500,000 community service payment for coastal environmental projects in the district. The companies will each complete four-year terms of probation, which includes implementing an environmental compliance plan with audit, inspection, and reporting requirements.

Abdurrahman Korkmaz, a Turkish citizen and master of the Motor Tanker PS Dream, a Panama-flagged chemical tanker, was recently sentenced to eight months of incarceration, followed by one year of supervised release. Korkmaz pleaded guilty to a two-count information charging him with violating the Act to Prevent Pollution from Ships (APPS) and Obstruction of Proceedings (33 U.S.C. § 1908(a); 18 U.S.C. § 1505). The two corporations pleaded guilty separately to APPS and obstruction violations. 

In January 2023, Korkmaz and the ship’ s operator ordered the crew to perform an overboard discharge of the contents of a residual oil tank on deck. Over the course of several days, the crew used a portable pump to empty the tank before arriving in New Orleans and failed to report the conduct in the ship’ s oil record books. Korkmaz also gave false statements to U.S. Coast Guard inspectors to conceal the discharge.

The U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.
 

On September 16, 2024, prosecutors filed an information and plea agreement charging Fidelity Development Group LLC (Fidelity) with violating the Clean Air Act for failing to inspect for the presence of asbestos (42 U.S.C. §7413(c)(1)). The arraignment and plea hearing are scheduled for January 16, 2025.

In 2015 or 2016, Fidelity purchased a building and planned to renovate it into a mixed-use property. Fidelity failed to perform or acquire an asbestos survey of the building prior to renovations. Around April 2020, a certified asbestos company conducted an asbestos survey in the Fidelity Building and identified more than12,000 linear feet of 80% chrysolite asbestos pipe wrap insulation in friable condition. 

The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.
 

On September 10, 2024, a court sentenced Rudy’s Performance Parts, Inc. (Rudy’s), for manufacturing, selling devices, commonly known as “defeat devices,” used to remove or disable required emissions controls in motor vehicles.

Rudy’ s pleaded guilty to conspiracy to violate the Clean Act (18 U.S.C § 371) and was ordered to pay a $2.4 million fine and complete a three-year term of probation. Rudolf, the company sole owner and chief executive officer, previously pleaded guilty for conspiring to violate the Clean Air Act by tampering with monitoring devices on approximately 300 diesel trucks, which involved the installation of defeat devices on those trucks. Rudolf was sentenced in April 2024 to three years of probation and ordered to pay a $600,000 criminal fine.

Separate from the criminal actions, the Justice Department, on behalf of the Environmental Protection Agency (EPA), filed a civil suit in 2022 against Rudy’  s and Rudolf for violating the Clean Air Act by manufacturing, selling and installing defeat devices and failing to adequately respond to the EPA’  s formal requests for information. Under a consent decree filed July 29, Rudy’  s and Rudolf will pay a $7 million civil penalty for those violations. The consent decree would also prohibit them from making, selling, offering to sell and installing defeat devices, transferring intellectual property that would allow others to make or sell defeat devices and investing in or profiting from defeat devices manufactured or sold by other businesses. The decree is subject to court approval.

Rudy’ s manufactured and sold aftermarket defeat devices, known as tuners, that tampered with motor vehicles’  on-board diagnostic systems (OBDs). Between 2015 and 2018, Rudy’ s sold approximately 43,900 such tuners, generating about $33 million in revenue.

The civil lawsuit alleges that from at least 2014 through mid-2019, Rudy’ s and Rudolf manufactured and sold more than 250,000 products designed to remove or disable EPA-mandated emissions controls. These products included hardware parts such as plates that block a vehicle’ s exhaust gas recirculation system and pipes that replace pollution treatment components in a vehicle’ s exhaust system.

The U.S. Environmental Protection Agency Criminal Investigation Division conducted the investigation.

On September 4, 2024, the Court revoked the previous term of probation for Empire Bulkers Ltd., finding the company guilty of two probation violations. The court imposed enhanced supervision to include one additional year of probation (extending the four years of supervision to the maximum of five years), requiring additional ship audits during the fourth year, and annual office audits by the court appointed monitor/third-party auditor (CAM/TPA) that were not previously required.

In the first violation, the Court found that Empire had failed to promptly notify the Court Appointed Monitor of allegations of new MARPOL violations on another one of the company’ s ships. The Second Engineer of the M/V Panagiotis alleged that the Chief Engineer was involved in deliberate overboard discharges that violated MARPOL. The company’ s compliance manager and its attorney interviewed crew members and took statements but waited 14 days before Empire notified the CAM and DOJ. When it did so, it submitted information that sought to discredit the whistleblower. And, prior to notifying the CAM and DOJ, all those serving in the engine department, including the Chief Engineer and the whistleblower, were dismissed.

The CAM informed the Court that the defendant’ s delay and dismissal of the crew made it impossible to conduct an independent investigation. Under these circumstances, the Court held that the 14-day delay was not prompt as required by the Environmental Compliance Plan (ECP). The Marshall Islands registry, where the ship was flagged, subsequently determined that intentional overboard discharges of oil-contaminated bilge waste took place without the use of required pollution prevention equipment and that these improper discharges were not recorded in the ship’ s Oil Record Book, thus verifying the whistleblower’ s allegations.

In the second violation, Empire was convicted of changing its corporate organization and chain of command without notifying the Court’ s Monitor and without going through a required process of modifying the ECP. Specifically, the ECP required by the Court stipulated that the company must have a compliance manager that reported to the company’ s managing director. The position of managing director was eliminated without informing the Monitor, Office of Probation, or DOJ. The company’ s compliance manager now reports to a committee on which he sits with other mid-level managers rather than to the highest levels of Empire Bulkers which was intended to assure accountability.

In the underlying case, Empire Bulkers, the operator of the M/V Joanna, and Joanna Maritime Ltd., the owner, each pleaded guilty to violating the APPS and the Ports and Water Ways Safety Act (PWSA) (33 U.S.C. § 1908; 46 U.S.C. § 70036). The APPS violation involved overboard discharges of oil contaminated waste while bypassing the ship’ s Oily Water Separator (by inserting a piece of metal into the Oil Content Meter so that it only detected clean water instead of the actual discharge effluent). Crew members also falsified the Oil Record Book, a required log. The PWSA violation involved the failure to immediately report a hazardous condition that affected the safety of the ship and threatened U.S. ports and waters. The hazard was an active fuel oil leak in the ship’ s purifier room and disabling the fuel oil heater pressure relief valves, an essential safety feature designed to prevent catastrophic fires and explosions. Empire Bulkers, and the ship’ s operator were originally sentenced in January 2023 and ordered to pay a $2 million fine and complete a four-year term of probation subject to the terms of a government approved ECP that required independent inspections by a TPA and supervision by a CAM.

On August 27, 2024, Quality Poultry and Seafood (QPS), sales manager Todd Anthoney Rosetti, and business manager James William Gunkel, pleaded guilty to charges stemming from the sale of mislabeled seafood. Sentencing is scheduled for December 11, 2024.

QPS sells poultry and seafood to a few hundred Mississippi-area restaurants, casinos, and grocery stores, and operates its own retail market and cafe. It is the largest seafood distributor on the Mississippi Gulf coast. From 2002 through 2019, QPS sold to its retail customers mislabeled seafood and sold to its wholesale customers fish that QPS either fraudulently mislabeled or offered to restaurants as convincing substitutes for the preferred local species that the restaurants advertised, identified in their menus, and charged their customers for serving. For more than a year following the execution of a search warrant, QPS continued to sell frozen fish imported from Africa, South America and India for use as substitutes for local premium species.

QPS pleaded guilty to conspiring to misbrand food with the intent to defraud and for the use of interstate wire transmissions to facilitate the sale of misbranded fish (18 U.S.C. §§ 371, 1343; 21 U.S.C. §§ 331(k), 333(a)(2)). QPS Sales Manager Todd Anthony Rosetti, and Business Manager James William Gunkel pleaded guilty to seafood misbranding (21 U.S.C. §§ 331(k), 343(a), (b), 333(a)(1)).

Co-defendant’s Mary Mahoney's Old French House restaurant (Mahoney's) and co-owner Charles Cvitanovich previously pleaded guilty for their involvement in the scheme. Mahoney’s pleaded guilty to conspiracy to misbrand seafood and wire fraud. Cvitanovich pleaded guilty to misbranding seafood (18 U.S.C. §§ 371, 1343; 21 U.S.C. §§ 331(k), 333(a)(2)). Mahoney’s and Cvitanovich are scheduled for sentencing on November 18, 2024.

Between December 2013 and November 2019, Mahoney and co-conspirators fraudulently sold approximately 58,750 pounds (more than 29 tons) of fish that was frozen and imported from Africa, India, and South America as local premium species. Between 2018 and 2019, Cvitanovich mislabeled approximately 17,190 pounds of fish sold at the restaurant. QPS supplied seafood to Mahoney’s and many other restaurants and retailers.

The U.S. Food and Drug Administration Office of Criminal Investigations conducted the investigation.
 

On August 20, 2024, Domermuth Environmental Services, LLC, (DES) and Christopher Domermuth pleaded guilty to violating the Clean Water Act for knowingly discharging pollutants into a water of the United States without a permit (33 U.S.C. §§ 1311, 1319(c)(2)(A)). Sentencing is scheduled for December 12, 2024.

On July 26, 2018, a pole camera installed on property adjacent to the DES facility filmed workers rolling over a previously exhumed underground storage tank, which spilled a mixture of petroleum and water onto a concrete pad at the facility. The workers, including Christopher Domermuth, threw absorbent pads into the spilled mixture and then used a portable pump to pump the oily mixture over a retaining wall at DES. The oily mixture flowed over a neighboring property and into a culvert leading to the Holston River, a tributary of the Tennessee River. 

The U.S. Environmental Protection Agency Criminal Investigation Division, the EPA Office of Inspector General, the Federal Bureau of Investigation, the Tennessee Valley Authority Office of Inspector General, and the Tennessee Department of Environment and Conservation conducted the investigation.

Juan Carlos Aponte Tolentino, formerly Interim President of a steel distributor in San Juan, Puerto Rico, knowingly entered into a conspiracy with competitors to suppress and eliminate competition by fixing wholesale prices for rebar distributed to hardware stores, contractors, and other businesses and individuals in Puerto Rico. The charged conspiracy began in January 2015 and continued until November 2022. Aponte pleaded guilty to the conspiracy charge on August 7, 2024. His sentencing hearing is scheduled for November 8, 2024.

Sioux Erosion Control, Inc., BG Dale Biscoe (part owner and Vice President), and Randall David Shelton (estimator) are charged with participating in a conspiracy to suppress and eliminate competition by fixing prices and rigging bids for erosion control products and services, including solid slab sodding, in and around Oklahoma. The charged period begins at least as early as September 2017 and continues until as late as April 2023.