Author: MIL-OSI Publisher

Source: United States Department of Justice Criminal Division

V.Ships Norway A.S. (V.SHIPS) pleaded guilty today to violating the Act to Prevent Pollution from Ships and was sentenced to pay a $2 million fine. V.Ships admitted that oily bilge water and oily waste was discharged from the Motor Tanker Swift Winchester (M/T Swift Winchester) and the discharges were omitted from the Oil Record Book.  

“Dumping oil-contaminated waste into the waters around our ports and coasts violates the law and poses an unnecessary health and environmental hazard,” said Acting Assistant Attorney General Adam Gustafson of the Justice Department’s Environment and Natural Resources Division (ENRD). “The crew took pains to hide their illegal activity by knowingly keeping inaccurate records. We will not turn a blind eye to this kind of irresponsible and fraudulent activity.”

“The Gulf of America and the Texas ports are amazing places with great natural beauty. They are also vital to our economy,” said Acting U.S. Attorney Jay R. Combs for the Eastern District of Texas. “When a foreign ship operated by a foreign company discharges polluting wastes, it threatens waters that are vital to the United States and the state of Texas. We will hold those responsible for polluting the Gulf of America accountable.”

“The criminal prosecution of this case underlines our commitment to enforcing the Act to Prevent Pollution from Ships” said Acting U.S. Attorney Ellison C. Travis for the Middle District of Louisiana. “The illegal discharge of bilge water and oily waste from vessels poses a significant threat to our waters and marine life and by holding those accountable who violate these standards, we send a clear message that we will not tolerate actions that endanger our environment. We remain dedicated to ensuring that the maritime industry operates responsibly and in compliance with environmental laws.”

“Coast Guard Marine Inspectors, Pollution Responders and Investigating Officers undergo rigorous and specialized training to detect and gather evidence of environmental crimes. This expertise alongside our federal partnerships was crucial to the successful prosecution of this violation,” said Capt. Jennifer Andrew, the Commanding Officer of Marine Safety Unit Port Arthur. “The Coast Guard maintains one of the world’s most comprehensive and thorough vessel inspection programs, and we will continue to leverage this robust capability to ensure strict compliance with domestic and international maritime laws.”

Between February 2022 and August 2022, a hose was connected between the incinerator waste oil tank and the sewage holding tank on the M/T Swift Winchester. This allowed oily waste to transfer into the sewage holding tank and then to be discharged directly into the sea, bypassing required pollution prevention equipment. A low-ranking engine crewmember reported this to a Superintendent at V.Ships. The Superintendent investigated the matter and discovered what appeared to be oil in the sewage tank. V.Ships dismissed the Chief Engineer.  In August 2022, the new Chief Engineer ordered the engine crew to clean the Oil Water Separator (OWS) filter. The engine crew took the filter onto the deck and hosed it down with a degreaser and the oily waste washed directly overboard through a scupper.

Coast Guard members from U.S. Coast Guard Marine Safety Unit Port Arthur conducted an examination, during which an engine room crewmember disclosed the discharges and provided photographic and video evidence documenting the illegal discharges. The M/T Swift Winchester entered Baton Rouge, Louisiana, on Aug. 25, 2022, and Port Arthur, Texas, on Sept. 7, 2022, with a knowingly falsified Oil Record Book.

U.S. Coast Guard Marine Safety Unit Port Arthur and the U.S. Coast Guard Investigative Service investigated the case.

Senior Trial Attorney Kenneth E. Nelson and Trial Attorney Lauren Steele of ENRD’s Environmental Crimes Section, Assistant U.S. Attorney Joseph Batte for the Eastern District of Texas, and Assistant U.S. Attorney Edward Warner for the Middle District of Louisiana prosecuted the case.

Source: United States Department of Justice Criminal Division

A federal grand jury in the Northern District of California returned an indictment charging a Hawaii man with wire fraud, securities fraud, and obstruction in connection with a scheme to defraud investors of $170 million as the CEO and Founder of the social media company Get Together, a privately held social media startup known as “IRL”.

According to court documents, Abraham Shafi, 38, of Pepeekeo, Hawaii, allegedly committed fraud in connection with Get Together’s 2021 “Series C” funding round, which raised $170 million at a valuation of over $1 billion. In seeking investment, Shafi told potential investors that IRL was spending only $50,000 a month in paid advertising and that user signups “were not incentivized or paid.” However, Shafi had spent millions of dollars on paid advertising in the form of incentive advertising, a form of advertising in which users are provided a reward in a third-party app if they download IRL. In the lead up to Series C, Shafi asked his vendor for a “big burst” of ads for “a few days” to drive more installs of the IRL app. During the Series C process, investors specifically asked about paid advertising, and Shafi falsely responded that “[u]nlike other apps that spend aggressively to acquire new users, we spend very little.” Shafi concealed IRL’s spending on incentive ads by having them invoiced to a third-party firm, ensuring that the nature and amount of the expense did not appear on IRL’s ledger.

Shafi continued to conceal the amount that IRL was spending in incentive ads after the Series C closed, instructing an IRL employee to create false invoices that listed the ad spending as being related to infrastructure, or “infra costs,” and falsely telling his investors that the money spent on incentive ads had instead been used for other forms of advertising. When the SEC opened an investigation into IRL, Shafi restored his cell phone to a previously saved backup, resulting in the deletion of records, and instructed other IRL employees to lie about his involvement in the scheme.

Shafi is charged with wire fraud, securities fraud, and obstruction. If convicted, he faces a maximum penalty of 20 years in prison on each count. A federal judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division; U.S. Attorney Craig H. Missakian for the Northern District of California; and FBI Special Agent in Charge Sanjay Virmani of the FBI San Francisco Field Office made the announcement.

The FBI is investigating the case.

Acting Assistant Chief Attorney Laura Connelly of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Sailaja Paidipaty and Evan Mateer for the Northern District of California are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.