Chief Engineers Convicted in ‘Magic Pipe’ Pollution Case

TV Green Sky. Photo provided by U.S. Dept. of Justice.

A federal jury in Charleston, South Carolina convicted two chief engineers of the vessel, TV Green Sky, on pollution charges related to use of a ‘magic pipe’.

Herbert Julian, who served as chief engineer of the Green Sky from Aug. 3 to Sept. 4, 2015, was convicted of two felony counts under the Act to Prevent Pollution from Ships (APPS) and for obstruction of justice. Panagiotis Koutoukakis, chief engineer from Feb. 1 to Aug. 3, 2015, was convicted of two felony counts, one for APPS and another for falsifying records.

Aegean Shipping Management, S.A., a foreign company with operations in Greece that acted as the Green Sky’s operator, previously pleaded guilty to a violation of the APPS and obstruction of justice.

“This case involved egregious violations of U.S. and international laws that are key to protecting the oceans from pollution, and deliberate efforts to mislead Coast Guard officials about these criminal acts,” said Acting Assistant Attorney General Jeff Wood of the Justice Department’s Environment and Natural Resources Division. “Now these defendants have been held accountable under the law by a jury of their peers. The Department of Justice will continue to aggressively prosecute criminal acts that pollute the oceans.”

The Green Sky is a large, oceangoing chemical tanker flagged in Liberia. The normal operation of marine vessels, like the Green Sky, generates large quantities of oil-contaminated waste water, which must pass through a filtration machine, known as an oil-water separator, before it is dumped overboard. But according to the Justice Dept., the Green Sky, built in just 2014, had unusual internal leaks that produced greater quantities of oily waste than a normal ship of its age and construction.

Evidence presented to the jury showed that the Green Sky was regularly pumping this contaminated and oily water directly overboard, while failing to disclose the discharges on the vessel’s oil record book as required. The illegal overboard discharges were falsified from February to August 2015.

“Methods of falsification included omitting illegal bypass operations, claiming that the oil water separator was used when it had not been, and a series of false entries regarding the levels of the bilge holding tank, which were designed to further the cover-up. While most of these discharges occurred in international waters, evidence at trial revealed that at least two of these discharges were within the Exclusive Economic Zone of the United States during the ship’s voyage from Pascagoula, Mississippi, to Houston, Texas in May 2015,” the Department of Justice said in a statement on Thursday.

The evidence presented during the fifteen-day trial demonstrated that the chief engineers covered up illegal overboard discharges that took place through two systems of “magic” hoses and a separate “magic” valve system designed to bypass the ship’s oil water separator. Koutoukakis and Julian falsified the oil record book to hide their illegal discharges. The vessel arrived in Charleston, South Carolina on August 26, 2015, when the false record was presented to the U.S. Coast Guard during an inspection of the vessel. The U.S. Coast Guard was tipped off by three whistleblowers who came forward to report the crimes and ask for protection from U.S. authorities.

By January 2016, it was determined that the former chief engineer Koutoukakis likely had information regarding the ongoing investigation into the Green Sky. Koutoukakis was later apprehended in Savannah, Georgia on a material witness warrant. Koutoukakis was subsequently indicted after further investigation revealed his substantial involvement in illegal discharges and records falsification. In addition, Julian was convicted of obstruction related to false statements that he made regarding the ship’s sounding log, which is a document that can be used to check the veracity of the oil record book. Testimony at trial revealed that Julian hid the log prior to the Green Sky’s arrival in Charleston and then lied to the Coast Guard about the vessel having a sounding log.

“With Charleston serving as one of the largest ports on the Eastern seaboard, working vessel pollution cases with the Environmental Crimes Section is an important focus for our office,” said U.S. Attorney Beth Drake, District of South Carolina. “Through criminal charges, we can deter those who would dump oily wastes into the world’s oceans and use false documents to cover it up.”

Prior to the initiation of the trial, on November 22, 2016, the Green Sky’s operator, Aegean Shipping Management, S.A. pleaded guilty to one APPS count for the illegal discharges and one obstruction count based on misrepresentations made by the vessel’s captain to the U.S. Coast Guard during the August 2015 boarding. The corporate vessel operator had been indicted along with the individuals on July 15, 2016. The plea materials were previously sealed to protect the integrity of the jury and the witnesses in the trial against the individual defendants, but the unsealed documents revealed that the operating company agreed to pay a financial penalty of $2 million, which includes a criminal fine and a smaller community service component directed toward the Gray’s Reef National Marine Sanctuary. The company will also be sentenced to probation and an environmental compliance plan.

Sentencing of the company and defendants Julian and Koutoukakis will take place at a date that will be set by the court.

At trial, the second engineer Nikolaos Bounovas was acquitted of all charges against him. The previously convicted Captain, Genaro Anciano, testified at the trial. His sentencing has yet to be scheduled.

“The Green Sky case stresses the vital importance of USCG environmental protection missions with regard to pollution from ships,” said Captain Gary L. Tomasulo, Commander, U.S. Coast Guard Sector Charleston. “We are extremely proud of our team of marine safety professionals and the Coast Guard Investigative Service which were an integral part of
investigating these occurrences and referring them for enforcement action.”

The case was investigated by the U.S. Coast Guard Sector Charleston and the Coast Guard Investigative Service.

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