FOR IMMEDIATE RELEASE ENRD

WEDNESDAY, FEBRUARY 1, (202) 514-2007

2006 TDD (202) 514-1888
WWW.USDOJ.GOV

MSC Ship Management Sentenced For

Oil Pollution Coverup
Court Orders Largest Environmental Criminal Fine
in Massachusetts History
WASHINGTON, D.C. – MSC Ship Management (Hong Kong) Limited—a Hong
Kong-based container ship company—has pleaded guilty and was sentenced to pay
a $10 million criminal fine after admitting to engaging in conspiracy, obstruction of
justice, destruction of evidence, false statements and violating the Act to Prevent
Pollution from Ships, the Department of Justice announced today.

This is the largest fine involving a single vessel charged with deliberate pollution
and the largest criminal fine paid by a defendant in an environmental case in
Massachusetts history. The fine was imposed at a joint plea and sentencing hearing
held today in Boston. The container shipping company was also ordered to pay an
additional $500,000 for a community service project administered by the National
Fish & Wildlife Foundation, which will provide environmental education to
mariners visiting or sailing from Massachusetts ports and inform them how to report
environmental crimes to the U.S. Coast Guard.

“Deliberate pollution from vessels is a serious and recurrent problem that threatens
the state of our oceans,” said Sue Ellen Wooldridge, Assistant Attorney General for
the Justice Department’s Environment and Natural Resources Division. “The
sentence imposed today is significant because it sends the message that we will seek
increasingly tougher penalties for those in the maritime industry who continue to
pollute."

MSC Ship Management admitted to charges filed by the Department of Justice that
a specially-fitted steel pipe, referred to as the “magic pipe,” was used on the MSC
Elena, a 30,971 ton container ship, to circumvent required ship pollution prevention
equipment and discharge oil sludge and oil contaminated waste directly overboard.
Upon the discovery of this bypass equipment during a U.S. Coast Guard inspection
in Boston Harbor on May 16, 2005, senior company officials in Hong Kong directed
crew members to lie to the Coast Guard. Additionally, senior ship engineers ordered
that documents be destroyed and concealed.

Michael J. Sullivan, United States Attorney for the District of Massachusetts said,
“Our hope is that this substantial fine will send a strong message to those in the
maritime community who might try to circumvent our nation’s anti-pollution laws.
It is necessary to ensure that the consequences are significant, and that companies
realize that violating our environmental laws will be taken seriously and will
ultimately cost them more than legally disposing of the waste.”

MSC Ship Management discharged approximately 40 tons or approximately 10,640

gallons of sludge during a five-month period in 2004 through a three-piece bypass
pipe manufactured on the ship. An even larger volume of oil-contaminated bilge
waste was also discharged with a rubber hose and portable pump. The MSC Elena
made regular voyages from ports in Europe across the Atlantic to ports in the United
States, including Boston.

In a related prosecution, Mani Singh—the Chief Engineer of the MSC Elena—was

indicted in November on charges of making false statements to the Coast Guard;
denying knowledge about the existence and use of the bypass equipment;
obstructing justice by directing subordinates to lie to the Coast Guard; concealing
evidence; and concealing the discharges in a falsified Oil Record Book—a required
log in which all overboard discharges must be recorded. Singh pleaded guilty in
December 2005 and is scheduled for sentencing in March. Aman Mahana, the ship’s
Second Engineer, also pleaded guilty December 2005 and is scheduled for
sentencing on February 2, 2006.

This investigation was conducted by the Northeast Regional Office of the U.S.
Coast Guard Investigative Service, with assistance from the U.S. Coast Guard Sector
Boston; U.S. Coast Guard First District Legal Office; U.S. Coast Guard Office of
International and Maritime Law; U.S. Coast Guard Headquarters Office of
Investigations and Analysis; and U.S. Coast Guard Office of Compliance. The case
is being prosecuted by Assistant U.S. Attorney Jonathan F. Mitchell in the District
of Massachusetts’ Economic Crimes Unit, Special Assistant U.S. Attorney Luke M.
Reid of the U.S. Coast Guard, and Senior Trial Attorney Richard A. Udell and Trial
Attorney Malinda R. Lawrence of the Justice Department’s Environmental Crimes
Section.

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