Water Management Companies Enter Resolutions To Pay $4.3 Million In Monetary Penalties For Clean Air Act Violations

SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that two companies have entered resolutions with the government requiring the payment of a combined $4.3 million in monetary penalties, and an enhanced environmental compliance program, for their involvement in Clean Air Act violations.

According to United States Attorney David J. Freed, Rockwater Northeast LLC, a Pennsylvania-based company that provides water management services to companies in the oil and gas industry, was charged in a criminal information on September 24, 2020, with 31 counts of violating the Clean Air Act, for tampering with the emissions systems on 31 heavy-duty diesel trucks owned by the company, and installing “defeat devices” that disabled emissions diagnostic systems on the trucks.  Rockwater Northeast LLC also is alleged to have caused the trucks to pass annual vehicle safety inspections by the Department of Transportation (DOT), despite the modified emissions systems.

Separately, Select Energy Services, Inc., a Texas-based company and the successor in interest to Rockwater Energy Solutions, Inc., parent company of Rockwater Northeast LLC, entered a three-year non-prosecution agreement with the United States.  The agreement resolves Clean Air Act violations for modified emissions systems on 29 additional heavy-duty diesel trucks that were owned by Rockwater Energy Solutions, Inc.  Select Energy Services, Inc. has cooperated with the investigation since its acquisition of Rockwater Energy Solutions, Inc. in 2017.

Rockwater Northeast LLC agreed to pay a monetary resolution of $2 million, and Select Energy Services, Inc. agreed to pay a monetary resolution of $2.3 million.  Under the terms of the non-prosecution agreement, Select Energy Services, Inc. agreed to continue cooperating with the government, and to implement an environmental compliance program designed to prevent future Clean Air Act violations.  Select Energy Services, Inc. also is required to conduct annual audits during the three-year term of the agreement, to ensure Clean Air Act compliance.

Six individuals have been prosecuted in connection with this investigation; four of whom are current or former employees of Rockwater Northeast LLC, and two of whom are former third-party vendors of Rockwater Northeast LLC.  All six individuals pleaded guilty to conspiring to impede the lawful functions of the Environmental Protection Agency (EPA) and DOT, and to violate the Clean Air Act:

1. Brian Mellot, of Cumberland, Maryland, was sentenced to six months of imprisonment and one year of supervised release;
2. Gavin Rexer of Jersey Shore, Pennsylvania, pleaded guilty and is awaiting sentencing;
3. Dennis Paulhamus of Jersey Shore, Pennsylvania, pleaded guilty and is awaiting sentencing;
4. Joseph Powell of Hickory, Pennsylvania, pleaded guilty and is awaiting sentencing;
5. John Joseph of Canonsburg, Pennsylvania, pleaded guilty and is awaiting sentencing; and
6. Timothy Sweitzer of Jersey Shore, Pennsylvania, pleaded guilty and is awaiting sentencing.

“We take seriously our job of protecting the environment in Pennsylvania, and we won’t hesitate to prosecute individuals committing environmental crimes,” said United States Attorney Freed.

“The defendants in this case knowingly and repeatedly installed ‘defeat devices’ to remove emissions controls in dozens of diesel trucks in violation of the Clean Air Act,” said Environmental Protection Agency (EPA) Special Agent in Charge Jennifer Lynn of EPA’s Criminal Investigation Division in Pennsylvania. “Today’s announcement demonstrates that EPA and our law enforcement partners are committed to enforcing our environmental laws.  

“Businessmen and companies that intentionally falsify records in order to circumvent federal laws and regulations will be held accountable for their actions,” said Douglas Shoemaker, Regional Special Agent-In-Charge, U.S. Department of Transportation Office of Inspector General. “This multi-million dollar settlement demonstrates our continuing effort to combat transportation-related fraud and abuse in the State of Pennsylvania and throughout the country.”

The matter was investigated by the EPA’s Criminal Investigations Division and the DOT’s Office of the Inspector General, with the assistance of the Pennsylvania State Police and other law enforcement agencies.  The case was prosecuted by Assistant United States Attorneys Phillip J. Caraballo and Sean Camoni, and by Special Assistant United States Attorney Patricia C. Miller.

Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

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