Two foreign shipping companies were fined $10.4 million in a federal criminal case after pleading guilty Thursday in Newark, N.J., to dumping oil illegally into the ocean and then doctoring records to cover it up.
Of the $10.4 million, $2.6 million will be used to conserve, preserve, and restore coastal areas of New Jersey and Delaware affected by Hurricane Sandy.
Because the ships had visited ports in Delaware and Carteret, N.J., the Coast Guard became involved. Paul Fishman, the U.S. attorney for New Jersey, and Todd Wiemers, the Coast Guard deputy commander of the Delaware Bay sector, announced the penalties.
"We in New Jersey are as sensitive as anyone to the need to preserve the shoreline," Fishman said in a statement. "Shipping companies who foul the water by deliberately discharging oil and lying about it to the Coast Guard can expect to be prosecuted."
The companies, Columbia Shipmanagement (Deutschland) GmbH of Germany and Columbia Shipmanagement Ltd. of Cyprus, were represented by Washington lawyer Thomas L. Mills. No company officials appeared before U.S. District Judge Susan D. Wigenton.
The $10.4 million collective penalty is the largest vessel pollution settlement in either New Jersey or Delaware, federal officials said.
The case against the shipping companies is laid out in a 50-plus-page "joint factual statement" entered into the record as part of the plea agreement.
Typically, large amounts of waste oil are generated by huge commercial vessels such as the four involved in this case. Some of the oil can be discharged, but if the concentration of waste oil, as detected by a monitoring device, is too high, it has to be stored in a tank for onboard incineration or to be off-loaded safely later.
On these vessels, the monitor was sometimes tricked by pumping fresh water through it. Other times, it was bypassed with the waste oil being pumped directly into the ocean.
The cases involving three of the four ships began when crew members tipped off the Coast Guard.
On May 7, 2012, crew members of the M/T King Emerald, a 25,507-gross-ton oil-tank vessel, showed cellphone photos of illegal dumping to Coast Guard officers on board for a routine check in Carteret.
The record book, presented to officials, had been doctored. The waste had been dumped off the coast of Costa Rica at night to conceal the dumping, according to federal documents.
The ship's second engineer has pleaded guilty in connection with the case and will be sentenced April 3 in Newark, according to a statement from the U.S. Attorney's Office.
In October 2012, crew members of the M/T Nordic Passat, an 84,586-gross-ton oil carrier, gave the Coast Guard a thumb drive with photos and videos of illegal dumping taken during the voyage to the Delaware Bay Big Stone Anchorage.
A crew member from the M/V Cape Maas provided video to Coast Guard officials in San Francisco.
Two weeks before Thursday's proceedings, the companies and their attorneys disclosed violations on the Cape Taft, then anchored in New York and bound for New Jersey. In all cases, multiple crew members were involved.
Mills told the Newark Star-Ledger that rogue employees were to blame for the dumping and records falsification, which violated company policy.
The National Fish and Wildlife Foundation will select Hurricane Sandy projects to be funded by the $2.6 million.