FOR IMMEDIATE RELEASE MONDAY, JANUARY 14, 2002 WWW.USDOJ.GOV WWW.EPA.GOV DOJ (202) 514-2007 EPA (202) 564-4355 US ATTY (803) 929-3000 GREENVILLE, SOUTH CAROLINA A former environmental contractor, James Edward Adams of Inman, S.C., has been sentenced to 27 months in prison and three years of supervisory release for conspiracy to commit mail fraud and related crimes, the Department of Justice and the Environmental Protection Agency announced today. The sentencing took place in the federal district court for the District of South Carolina.
Adams was the former president and owner of Carolina Upgrading of South Carolina, Inc., an Inman, S.C. environmental contracting business providing testing services for owners and operators of underground storage tanks (USTs). USTs contain petroleum products, including gasoline, and UST owners and operators are required by law to have their tanks tested to ensure their systems are not leaking any petroleum into the groundwater or soil.
On Aug. 24, 2001, Adams and the company pled guilty to a 15-count Indictment, which charged that from March 1994 through October 1999, Adams directed employees of his company to fraudulently provide false UST test reports to owners and operators of UST facilities located in South Carolina, North Carolina, Florida, Georgia, Virginia and Tennessee.
Adams and his employees committed the scheme by printing false graphs for UST tests that were performed improperly or not at all. Many of the false tests became known as "driveway tests," because employees would generate the false tests on a computer in their own driveways, without ever conducting the tests at the UST facilities. Adams ordered employees to send the false test results and an invoice for payment through the mail to the company's customers. The company received payment, also through the mail, from each defrauded customer.
From 1994 through 1999, over 1500 false tests were performed, for at least 400 customers, in six states. UST owners and operators who were defrauded ranged from small commercial gas stations to a state college to a federal courthouse building. The total fraud suffered by customers of Adams and the company is approximately $750,000.
Adams was ordered to pay a special assessment of $1,500 and will have three years of supervised release after servinged his 27-month prison sentence. The company was placed on probation for three years and ordered to pay a special assessment of $6,000. The court did not impose a fine on Adams or the company based upon an inability to pay.
Mark Scruggs and Chris Fletcher, former employees of the company, pled guilty to conspiracy to commit mail fraud in April of 2000. Each were sentenced to five months of home confinement.
"These defendants not only violated the law, but also the trust of the underground storage tank owners and operators who, in good faith, sought to ensure that they were in compliance with the law," said Thomas L. Sansonetti, Assistant Attorney General of the Department of Justice Environment and Natural Resources Division. "Such fraudulent criminal activity could cause major environmental harm, and the Department of Justice will continue to seek out and prosecute these crimes." "Those charged with the task of assuring that the environment is protected must perform that task competently," said US Attorney Strom Thurmond, Jr. "When they fail to do so, they must be held accountable, and this case accomplishes just that. I appreciate the cooperation of the investigative agencies that made this prosecution so successful." The case was investigated by the South Carolina Department of Health and Environmental Control Office of Criminal Investigations, North Carolina State Bureau of Investigation, and U.S. EPA. 02-011
Source: US Department of Justice
