Judge Hands Down $850,000 Penalty, 5 Years' Probation in APPS Case

Cooperative Success Maritime S.A., the operator of the M/T Chem Faros, a 21,145 gross-ton ocean-going cargo ship that regularly transported cargo between foreign ports and the United States, pleaded guilty and was sentenced on June 7 in federal court for violating the Act to Prevent Pollution from Ships (APPS), and to making material false statements, the Justice Department announced.

U.S. District Court Judge James C. Dever III for the Eastern District of North Carolina sentenced the company to pay a $850,000 penalty of which $150,000 will be paid to the the National Fish and Wildlife Fund. The judge also sentenced the company to serve five years of probation, during which time they will implement an environmental compliance plan.

Federal and international law requires that all ships comply with pollution regulations requiring the proper disposal of oily waste water and sludge by passing the oily waste through an oil-water separator (OWS) aboard the vessel or burning the sludge in the ship’s incinerator. Federal law also requires the ship’s crew to record accurately in an oil record book (ORB) each transfer or disposal of oily waste water and sludge. These laws are designed to prevent pollution of ocean waters.

During a regular inspection of the ship on March 29, 2010, in Morehead City, N.C., an oiler with the engine crew passed a note to a U.S. Coast Guard inspector describing the use of a magic pipe to illegally discharge bilge.

The subsequent investigation revealed that from September 2009 through March 2010, engine department crew members pumped oil-contaminated waste directly overboard by using the pipe that bypassed the OWS on several occasions, up to 10 times according to some crew members.

On March 18, 2010, the chief engineer, Vaja Sikharulidze, ordered the engine department crew members, through the second engineer, to bypass the OWS and discharge oil-contaminated bilge waste directly overboard. This resulted in approximately 13,200 gallons of oil-contaminated waste to be discharged into the ocean.

Sikharulidze has acknowledged making false entries in the oil record book to hide the true amount of oil-contaminated bilge waste that was stored in a certain tank aboard the ship. He further admitted that transfer entries in the ORB from on or about March 6, 2010 through March 17, 2010, were false. He indicated he was continuing the practice of false entries made by the prior chief engineer for that particular tank. He explained that the prior chief engineer indicated in the ORB that a particular bilge tank contained 24 cubic meters of waste when, in fact, it contained 60 to 65 cubic meter of waste. In order to avoid bringing attention to the false entries, the chief engineer continued the practice of making false entries. Last month, Sikharulidze, 59, pleaded guilty to violating the APPS.

"The oceans must be protected from being used as dump sites for waste oil or other hazardous substances," said Maureen O’Mara, special agent-in-charge of EPA’s criminal enforcement program in Atlanta. "This prosecution sends a clear message that companies that refuse to operate their vessels safely and lawfully and pollute our waters will be vigorously prosecuted."

Investigation of this case was conducted by the U.S. Coast Guard and the Environmental Protection Agency with assistance from the FBI’s Computer Forensic Team. The case was jointly prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Eastern District of North Carolina.

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