CFC Smugglers Jailed, Fined

By Cat Lazaroff

WASHINGTON, DC, January 9, 2003 (ENS) - A Connecticut businessman who made millions by illegally importing and selling ozone depleting chlorofluorocarbon gases has been sentenced to spend the next six and a half years in prison. Barry Himes, who has already forfeited a $3 million mansion, a BMW sedan and a three-carat diamond ring, was also ordered to pay $1.8 million in restitution.

Himes is the lead defendant in a case involving a complex multi-year, multimillion dollar conspiracy to import and sell ozone depleting chlorofluorocarbon gases (CFCs) and to avoid taxes. Sentenced along with Himes on Tuesday was co-conspirator John Mucha, who will spend four years in prison and must pay $1.2 million in restitution.

ozone

Ozone depleting chemicals such as CFCs are blamed for a thinning or hole in the stratospheric ozone layer over Antarctica, shown here on September 17, 2001. (Two images courtesy NASA/Goddard Space Flight Center)
Another defendant, accountant Richard Pelletier, is expected to be sentenced later this week and face similar penalties. So far, a total of 10 individuals have pleaded guilty to federal charges in connection with the investigation.

The case is the second largest prosecution regarding ozone depleting substances and is part of a nationwide CFC anti-smuggling initiative by the Justice Department, the U.S. Environmental Protection Agency and the Customs Service. To date, more than 114 individuals have been convicted in numerous illegal CFC import schemes, and courts have imposed significant prison terms and several millions of dollars in fines and restitution in a number of these cases.

"We will not tolerate criminal conduct that is detrimental to our environment," said Tom Sansonetti, assistant attorney general for the Justice Department's environment and natural resources division. "The Environment Division will continue its strong enforcement efforts against anyone who tries to gain an unfair advantage at the expense of the environment."

CFCs, which are used primarily as refrigerants and industrial solvents, are ozone depleting substances that are subject to strict regulations under the Clean Air Act because of the danger that they present to the Earth's protective ozone layer. When released into the air, CFCs migrate into the upper atmosphere where they destroy ozone, a naturally occurring gaseous compound that protects the Earth from the sun's harmful ultraviolet radiation.

holes

Restrictions on the use of ozone depleting substances helped to shrink the hole over Antarctica last year. In September 2002, the hole had thinned and divided in two.
These chemicals are subject to an excise tax of about $5 per pound, which is imposed to discourage their use and to promote the transition to more ozone friendly replacement products.

Himes, Mucha and Pelletier concealed more than $6 million in profits from the sale of more than a million pounds of CFCs between 1996 and 1998. The defendants admitting smuggling about 660 tons of CFCs into the U.S., and importing another 1,100 tons without paying excise taxes.

The defendants used the name of various shell companies to conceal their control of these transactions to defeat efforts by the Internal Revenue Service to collect the excise and income taxes. They used multiple offshore bank accounts in the Bahamas and Antigua as well as other corporate bank accounts in Nevada and New York, to launder the money, hide their income, and create a false appearance that the income from the CFC sales proceeds was going to unrelated third parties.

seizure

Smuggling of ozone depleting substances is a worldwide problem. These canisters were seized in India. (Photo courtesy Environmental Investigation Agency)
Dozens of wire transfers and checks were made payable to contractors building a multi-million home for Himes, to a boat dealer for Himes's purchase of a 45 foot cruiser, to a jeweler for a diamond ring and other diamond jewelry for Himes, and to car dealerships for the purchase of vehicles for Himes, Mucha and Pelletier.

Under the terms of a plea agreement with the U.S. attorney's office, Himes forfeited his mansion - a 5,400 square foot custom built home on the Connecticut River which the government auctioned off for $3.4 million - a luxury car and a diamond ring, on top of the $1.8 million in restitution and a $12,500 fine that he must pay. Mucha has forfeited his BMW sedan and will pay $1.2 million in restitution.

The defendants could have faced even greater penalties: up to 20 years in prison and fines of $500,000 or more for money laundering charges, for example. All three pleaded guilty in March 2002 and reached plea agreements with the government.

air conditioner

New technologies are helping to replace many refrigeration and air conditioning systems that once used CFCs and other ozone depleters. This desiccant cooling system is on the roof of the Park Hyatt Hotel in Washington, DC. (Photo courtesy National Renewable Energy Laboratory)
"As these defendants learned the hard way, CFC smugglers get caught, prosecuted, fined and sent to federal prison," said John Peter Suarez, EPA's assistant administrator for enforcement and compliance assurance." "This settlement sends a clear message that pollution doesn't pay. We will take all actions necessary to enforce our laws against those who put the public at risk."

The cases are not the first to bring hefty penalties for violations of federal law involving CFCs. In May 2001, Aurelio and Joseph Vigna were sentenced in Miami to spend more than a year in jail and pay $750,000 in excise taxes after they pled guilty to conspiracy in a case involving the illegal distribution of CFCs.