Environmental Law

Superfund Bid-rigging?

By Walter James

On July 24, 2008, JMJ Environmental Inc. (?JMJ?), its owner John Drimak Jr., and Norman Stoerr pleaded guilty to bid rigging, fraud and tax charges in connection with sub-contracts for wastewater treatment supplies and services at two Superfund sites in New Jersey (the Federal Creosote Superfund Site in Manville, New Jersey and the Diamond Alkali Superfund Site in Newark, New Jersey). 

JMJ and Drimak pleaded guilty to rigging bids at Federal Creosote from approximately October 2002 to approximately February 2006.  Drimak also pleaded guilty to one count of conspiracy to defraud the USEPA at the Federal Creosote site and to defraud Tierra Solutions Inc. (a general contractor) at the Diamond Alkali site.  As part of the conspiracy, Drimak participated in a false invoicing and kickback scheme from January 2002 until April 2007.  Drimak also pleaded guilty to filing false income tax returns for 2002 through 2005.  Stoerr pleaded guilty to rigging bids at Federal Creosote from approximately October 2002 to approximately October 2003.  Stoerr also pleaded guilty to one count of conspiracy to defraud the USEPA at the Federal Creosote site and to defraud Tierra Solutions at the Diamond Alkali site by participating in a false invoicing and kickback scheme from the fall of 2000 until approximately the spring of 2004.  Stoerr also pleaded guilty to one count of aiding Drimak in the filing of a false income tax return.

According to the pleadings, Drimak provided more than $26,000.00 in kickbacks to Stoerr and more than $385,000.00 to Stoerr?s former superior, at both the Federal Creosote and Diamond Alkali sites, in exchange for their assistance in allocating certain sub-contracts to JMJ.  The kickbacks were in the form of checks, cash, cruises, home renovations, boat trailers and airline flights.  In addition, as part of the fraud scheme, Stoerr and a former superior inflated invoices and accepted kickbacks from three other sub-contractors at Federal Creosote and Diamond Alkali.

Bid-rigging violations by an individual occurring before June 22, 2004, carry a maximum penalty of three years imprisonment and a $350,000.00 fine, while bid-rigging violations by an individual occurring after June 22, 2004, carry a maximum penalty of 10 years in prison and a $1,000,000.00 fine.  The maximum fine for a corporation charged with bid-rigging after June 22, 2004, is $100,000,000.00.  The maximum fine for each of these violations may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.  The fraud conspiracy for which Stoerr and Drimak are charged carries a maximum penalty of five years in prison, three years of supervised release, and a $250,000.00 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The tax violations for which Stoerr and Drimak are charged carry a maximum penalty of three years in prison, one year of supervised release, and a $100,000.00 fine.

More later.

As always, feel free to call me or e-mail me with any questions at walter.james@jamespllc.com.

WDJiii

Full post as published by Environmental Crimes Blog on July 30, 2008 (boomark / email).