Two international shipping firms from Germany and Cyprus pleaded guilty Thursday to obstruction and other charges in connection with what the U.S. Attorney's Office characterized as a pattern of falsifying records to hide the illegal dumping of engine sludge and oil-contaminated waste into the ocean.
The four ships in question docked in New Jersey, Delaware and California, but the criminal cases were consolidated in New Jersey.
The German firm Columbia Shipmanagement and Cyprus-based Columbia Shipmanagement Ltd. agreed to pay a combined $10.4 million penalty, U.S. Attorney Paul Fishman said. Of that, $2.6 million will go to addressing environmental damage caused by Superstorm Sandy in New Jersey and Delaware.
The two companies also will be placed on probation for four years. They are affiliates owned by the same holding company, Fishman said.
According to the U.S. Attorney's Office, whistleblowers played key roles in the various investigations.
The New Jersey probe into one of the Hamburg-based company's ships, the King Emerald, began after crew members approached Coast Guard officers with cell phone photos during a routine inspection in Carteret last May. The company eventually admitted it had illegally discharged oil waste off the coast of Central America, including within 45 miles (72 kilometers) of a national park area in Costa Rica.
Crew members of another ship, the Nordic Passat, prompted the Delaware investigation last October when they provided the Coast Guard with a thumb drive that contained photos and video showing how the ship's sewage system was rigged to send illegal discharges overboard. Similarly, whistleblowers alerted authorities to two others ships, one destined for New Jersey and another that docked in San Francisco.
"In this particular instance the whistleblowers were enormously helpful," Fishman said Thursday.
Under federal law, oil-contaminated waste can be discharged overboard only if it contains less than 15 parts of oil per million parts of water. To achieve this, large vessels are required to have a pollution control device called an oily water separator. Engine sludge, produced by the process of purifying fuel oil and lubricating oil, must be burned in a ship's incinerator or off-loaded on shore for disposal. At least one of the ships dumped sludge into the ocean and another falsified records to claim it incinerated sludge when it hadn't, authorities said.
In their guilty pleas, the shipping companies admitted bypassing the oily water separator or manipulating it to make the illegal discharges, then falsifying logs to hide their actions.
In one incident last spring, the King Emerald allegedly dumped five tons of oily waste in the waters off Costa Rica. According to the U.S. Attorney's Office, the Nordic Passat has made illegal discharges since 2006 by tricking a sensor designed to detect oil levels, a practice that may have dumped as much as 2,000 tons of oil-contaminated waste illegally.
The companies pleaded guilty to counts that include violating federal pollution laws, obstruction and making false statements. The King Emerald's second engineer pleaded guilty previously and is scheduled to be sentenced next month.
An attorney representing the companies didn't respond to an email seeking comment Thursday.