Hong Kong Ship Management Company and Two Employees Indicted for Environmental Crimes and Obstruction

Charges also include False Statements and Conspiracy

WASHINGTON, April 29 /PRNewswire-USNewswire/ -- A federal grand jury in Corpus Christi, Texas, returned an indictment today charging Fleet Management Limited with obstruction of agency proceedings, making false statements and failing to keep accurate pollution control records, the Justice Department announced today.

Fleet Management Limited of Hong Kong is charged with one count of failing to maintain an accurate oil record book as required by the Act to Prevent Pollution from Ships (APPS), a U.S. law which implements the International Convention for the Prevention of Pollution from Ships, commonly known as "MARPOL;" one count of making false statements to the U.S. Coast Guard; and one count of obstruction. If convicted of all counts, the company may be punished with a fine of up to $3 million.

The two individuals, Prem Kumar, a ship superintendent for Fleet Management Limited and Prasada Reddy Mareddy, the second engineer of the M/V Lowlands Sumida, have both been charged with conspiracy. Kumar was also charged with obstruction of a Coast Guard investigation. If convicted of the conspiracy charge, both face up to five years in prison and a fine of $250,000. If convicted of obstruction of justice, Kumar faces up to 20 years in prison and a $250,000 fine.

On Oct. 6, 2009, the Coast Guard was conducting a routine port state control inspection when an engine room crew member alleged that the vessel was illegally discharging oily wastewater and alerted them to the fact that a center fuel oil tank on the Lowlands Sumida was fitted with a "dummy" or false sounding tube and that oily waste water was being stored in the tank until it could be discharged overboard.. The "dummy" sounding tube would show the tank to be empty. The vessel also kept a tank sounding log that showed the tank as empty. When the Coast Guard removed the "dummy" sounding tube and sounded or measured the contents of the tank they determined the tank was almost half full with oily wastewater.

Large commercial ships, such as the Lowlands Sumida, are required by MARPOL and APPS to maintain a record known as the oil record book to document the movement, tank to tank, and the disposal of, all oil that has originated in the engineering spaces on the ship. Sludges on the ship which are generated by the purification of fuel oil and lubrication oil which are used by the main engine and generators on the ship, must be disposed of properly at a shore-side reception facility or burned in the ship's incinerator. Oily bilge wastewater, which accumulate in the lower-most part of the ship, can only be discharged overboard if the wastes are processed through a machine known as an "oil water separator" which ensures that the water discharged overboard contains no more than 15 parts per million of oil.

According to the indictment, both Kumar, a shore side manager, and Mareddy, conspired to use the "dummy" sounding tube to conceal the contents of the center fuel oil tank and to obstruct the Coast Guard's investigation and administration of a matter within the agency's jurisdiction. In addition to concealing the contents of the tank, Kumar and ship engineers obstructed the Coast Guard investigation by using a false sounding log to conceal the contents of the center fuel oil tank.

An indictment is merely an accusation, and defendants are presumed innocent unless and until proven guilty in a court of law.

On April 21, 2010, John Porunnolil Zacharias, the chief engineer of the Lowlands Sumida, pleaded guilty to an APPS violation for failing to maintain an oil record book and to an obstruction violation for providing inspectors with a false engine room sounding log, and for altering a center fuel oil tank by installing a "dummy" sounding tube to conceal the contents of the tank. Zacharias is scheduled to be sentenced on July 7, 2010.

The case was investigated by the Coast Guard Investigative Service, the Environmental Protection Agency Criminal Investigations Division in Region VI and the Texas Commission on Environmental Quality Environmental Crimes Unit. The case is being prosecuted by the Justice Department's Environmental Crimes Section and the U.S. Attorney's Office for the Southern District of Texas.

SOURCE U.S. Department of Justice

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