Case 1:16-cr-00097-GMS Document 6 Filed 02/02/17 Page 1 of 8 PageID #: 20 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE UNITED STATES OF AMERICA, v. Plaintiff, Criminal Action No. 16A1 { <"$"') INTERNATIONAL PETROLEUM CORPORATION OF DELAWARE, Defendant. '. MEMORANDUM OF PLEA AGREEMENT The United States of America, by and through Charles M. Oberly, Ill, the United States Attorney for the District of Delaware; Edmond Falgowskl, Assistant United States Attorney; and Martin Harrell, Special Assistant United States Attorney, and the Defendant International Petroleum Corporation of Delaware, by and through its attorney, Robert R. Stauffer, Esquire, enter into the following Memorandum of Plea Agreement ("Agreement") pursuant to Rule 11(c)(1)(C) and Rule 11(c)(3}(A) of the Federal Rules of Criminal Procedure: 1. Waiver of Indictment and Criminal Charges. The Defendant agrees to execute all necessary documents to waive indictment and enter guilty pleas to Counts 1 and 2 of the Information, filed against the Defendant by the United States At~orney. a. Count 1 charges the Defendant with conspiring to violate the Clean Water Act ("CWA' 1 ) at its Wilmington, Delaware, used oil processing plant by, among other things: tampering with monitoring methods or equipment; manipulating compliance monitoring samples by changing the rate of waste water treatment on sampling days; bypassing parts of the waste water treatment system; submitting false compliance monitoring sampling date to the City of Wilmington; accepting
Case 1:16-cr-00097-GMS Document 6 Filed 02/02/17 Page 2 of 8 PageID #: 21 and treating waste water in violation of its CWA pretreatment permit; and discharging waste water in violation of CWA permit limits, in violation of 33 U.S.C. 1319(c){2) and (c)(4), and all in violation of 18 U.S.C. 371. b. Count 2 charges the Defendant with the unlawful transportation of hazardous waste without a manifest, in violation of 42 U.S.C. 6928(d)(S)(A). 2. The Penalties. Defendant understands that the maximum statutory penalties are as follows: a. For Count 1, the maximum penalties are the greater of a fine of Five Hundred Thousand dollars ($500,000), or. twice the gross pecuniary gain or loss resulting from the unlawful conduct, pursuant to 18 U.S.C. 3571(c) and (d); a term of probation of five (5) years, pursuant fo 18 U.S.C. 3561(c)(1); a special assessment of Four Hundred dollars ($400), pursuant to 18 U.S.C. 3013(a)(2)(B); and restitution, pursuant to the provisions of 18 U.S.C. 3663. b. For Count 2, the maximum penalties are the greater of a fine of Five Hundred Thousand dollars ($500,000), or twice the gross pecuniary gain or loss resulting from the unlawful conduct, pursuant to 18 U.S.C. 3571(c) and (d), or Fifty Thousand dollars ($50,000) for each day of violation, pursuant to 42 U.S.C. 6928(d); a term of probation offive (5) years, pursuant to 18 U.S.C. 3561(c)(l); a special assessment of Four H.undred dollars ($400), pursuant to 18 U.S.C. 3013(a)(2)(B); and restitution, pursuant to the provisions of 18 U.S.C. 3663. 3. Applicability of Sentencing Guidelines. Defendant understands and acknowledges that, at sentencing, the Court is required to consider the United States Sentencing Guidelines ("U.5.S.G."), together with the other sentencing goals set forth in 18. U.S.C. 3553(a). Defendant understands and acknowledges that the U.S.S.G., including Chapter Eight ~hat provides guidance for the sentencing of corporate defendants, including provisions for probation and restitution, may be 2
Case 1:16-cr-00097-GMS Document 6 Filed 02/02/17 Page 3 of 8 PageID #: 22 considered by the Court, except that, pursuant to U.S.S.G. 8C2.1 and 8C2.10, the U.S.S.G. which pertain to the sentencing of organizations do not determine the fine range in cases involving environmental crime, as charged in Count 2. Instead, the fine ls to be determined under 18 U.S.C. 3553 and 3571. 4. Sentencing. Pursuant to Rule 11(c)(l)(C) of the Federal Rules of Criminal Procedure, and in retu'rn for the complete fulfillment by Defendant of all of its obl!gatlons under this Agreement, the government and Defendant agree that the sentence to be imposed by the Court Includes payment of Three Million, Five Hundred Thousand dollars {$3,500,000) plus the mandatory special assessment ("the Payment"), as discussed below. The parties agree that should the Court accept this Agreement under Rule 11(c){l)(C) the sentence should be imposed as follows: a. Criminal Fine: One Million, Three Hundred Thousand dollars ($1,300,000) of the total Payment shall be designated as the criminal fine. A fine of One Million do[lars ($1 million) shall be imposed for Count One, and Three Hundred Thousand dollars {$300,000) shall be imposed for Count 2. b. Mandatory Special Assessment: Defendant shall pay a special assessment of Efgnt Hundred dollars ($800). c. Restitution: Two Million, Two Hundred Thousand dollars ($2,200,000) of the Payment sha~i be paid to the City of Wilmington's Water/Sewer Fund 1 as restitution, pursuant to 8Bl.1 of the U.S.S.G. and 18 U.S.C. 3553(a). This restitution is to satisfy IPC's asserted obligations to the City of Wilmington solely for the City's claimed loss of revenue in sewer bills over a number of years resulting from the conspiracy detailed in paragraph l(a), above, and does not include payment for any penalties related to that loss of revenue or related to that conspiracy, as no such penalties have been assessed. 3
Case 1:16-cr-00097-GMS Document 6 Filed 02/02/17 Page 4 of 8 PageID #: 23 d. Payments: Defendant further agrees that, if the terms of this Rule ll(c)(l)(c) Agreement are accepted by the Court, the criminal fine, special assessment, and restitution shall be paid on the day of sentencing. Payment of the criminal fine and special assessment is to be made in the form of a check payable to "United States District Court Clerk." Payment of restitution shall be made in the form of a check payable to the City of Wilmington, c/o Department of Public Works, Commissioner Jeffrey Starkey City of Wilmington Water/Sewer Fund. e, Probation: The Defendant will not be placed on probation. 5. Application of the Agreement. This Agreement shall bind Defendant and its successors, assigns, and parent corporations. No change in name, change in corporate or Individual control, corporate reorganization, change In ownership, merger, change of legal status, or similar action shall alter the responsibilities of Defendant under this Agreement. The Defendant shall not engage in any action to seek to avoid the obligatlons and conditions set forth in this Agreement. 6. Cooperation. As part of this Agreement, Defendant agrees that It will continue to provide full and complete cooperation in any further investigation and/or prosecution of individuals in connection with the investigation of offenses involving the conduct described in paragraph 1, above. The United States acknowledges that Heritage-Crystal Clean, LLC, did not own the Defendant or its Wilmington, Delaware, plant at the time of these offenses, and that Heritage-Crystal Clean, LLC, has cooperated extensively with the Government In this Investigation. The proposed $1.3 million criminal fine reflects this cooperation. 7. Statements. This Agreement does not limit the right of the Defendant or the government to speak at the time of sentencing consistent with the provisions set forth in this Agreement, and to provide the Court a~d the United States Probation Office with evidence of all relevant conduct committed by Defendant. The parties agree that at sentencing each will support the agreed 4
., Case 1:16-cr-00097-GMS Document 6 Filed 02/02/17 Page 5 of 8 PageID #: 24 disposition set forth In this Agreement pursuant to Rule ll(c)(l)(c) of the Federal Rules of Criminal Procedure. The Defendant will not make any contrary public statements regarding this Agreement. 8. Non-Prosecution of Additional Offenses. Provided that the Defendant complies fully with the terms of this Agreement, the U.S. Attorney's Office for the District of Delaware agrees to forgo additional criminal prosecution against the Defendant in the District of Delaware for any additional environmental offenses or related offenses committed at I PC's Wilmington, Delaware, facility prior to Heritage-Crystal Clean's purchase of the facility in October, 2014, and which are known to the government at the time of signing this Agreement. The Defendant understands and agrees that neither this paragraph nor this Agreement limit the prosecuting authority of any other sections or divisions of the Department of Justice, including the United States Attorney of any judicial district not a party to this Agreement, or any other federal, state or local regulatory or prosecuting authorities. Furthermore, this Agreement does not provide or promise any waiver of any civil or administrative actions, sanctions, or penalties that may apply, including but ~ot limited to: fines, penalties, claims for damages to natural resources, suspension, debarment, listing to restrict rights and opportunities of the Defendant to contract with or receive assistance, loans, and benefits from United States agencies, licensing, injunctive relief, or remedial action to comply with any applicable regulatory requirement. Thi~ Agreement has no effect on any proceedings against any party not expressly mentioned herein, Including the actual or potential criminal liability of any individuals. 9. Breach of the Agreement. If the government determines that the Defendant has failed to comply with any provision of this Agreement, or has committed any crime within the jurisdiction of the United States during the pendency of this Agreement, the government may, at its sole option, be released from its commitments under this Agreement in their entirety by notifying the Defendant, through counsel or otherwise, in writing. The government may also pursue all 5
Case 1:16-cr-00097-GMS Document 6 Filed 02/02/17 Page 6 of 8 PageID #: 25 remedies available under the law against the Defendant irrespective of whether it elects to be released from its commitments under this Agreement. Defendant recognizes that no such breach by it of any obligation under this Agreement shall give rise to grounds for withdrawal of Its guilty plea. The Defendant understands that should it commit any such breach of this Agreement, then the government will have the right to use against the Defendant before any grand jury, at any trial, hearing or for sentencing purposes, any statements made by Defendant's employees, agents, or authorized representatives and any information, materials, documents or objects provided by Defendant to the government pursuant to this Agreement without any limitation. In this regard, Defendant hereby waives any defense to any charges which It might otherwise have under any statute of limitations, pre-indictment delay, or the Speedy Trial Act for one hundred twenty (120) days following any breach of the Agreement, except to the extent that such defenses existed as of the date of the signing of this Agreement. 10. Probation Office Not Bound by Agreement. Defendant understands that the sentencing disposition agreed upon by the parties is not binding upon the United States Probation Office for the District of Delaware. 11. Information for Probation Office. Defendant agrees to provide all available information requested by the United States Probation Office for the District of Delaware. 12. Withdrawal of Agreement. Defendant's plea will be tendered pursuant to Rule ll(c)(l)(c) of the Federal Rules of Criminal Procedure. If the sentencing judge rejects this Agreement, then it shall be null and void at the option of either the government or the Defendant. In this regard, Defendant hereby waives any defense to any charges under any statute of limitations, for pre indictment delay, or under the Speedy Trial Act for one hundred and twenty (120) days following any nullification or voiding of the Agreement, as a result of judicial rejection of the Agreement. 6
Case 1:16-cr-00097-GMS Document 6 Filed 02/02/17 Page 7 of 8 PageID #: 26 13. Corporate Authorization. Defendant represents that it is authorized to enter into this Agreement and to bind itself to its terms. At the time of signing this Agreement, Defendant shall provide to the United States a written statement in the form of a notarized legal document certifying that Defe'ndant is authorized to enter into and comply with all of the provisions of this Agreement. 14. Waiver of Appeal. The Defendant, through its authorized representative, is awar~ that 18 U.S.C. 3742 gives the Defendant the right to appeal the sentence, and that other federal statutes give a defendant the right to appeal other aspects of the conviction. In consideration of the Agreement with the United States as set forth. herein, the Defendant knowingly and voluntarily agrees to waive the following rights: (a) the right, conferred by 18 U.S.C. 3742, to appeal the sentence imposed by the Court for the conviction of these offenses, including fine and community service payment; (b) the right to appeal any aspect of Defendant's conviction; and (c) the right to bring any collateral attack, or any other writ.or motion, that challenges Defendant's conviction or sentence, except as it relates to a claim of ineffective assistance of counsel. 15. Voluntariness of the Plea. The Defendant, through its authorized representative, acknowledges that it has entered into this Agreement freely and voluntarily and that it has been fully advised by counsel, and that no threats. or promises were made to induce Defe.ndant to enter into the guilty plea called for by this Agreement. 16. Completeness of Agreement. The Government and the Defendant acknowledge that these terms constitute the entire Agreement between the parties. No promises, agreements or conditions have been entered into other than those set forth in this Agreement. This Agreement supersedes all prior understandings, whether written or oral. This Agreement cannot be modified 7
Case 1:16-cr-00097-GMS Document 6 Filed 02/02/17 Page 8 of 8 PageID #: 27 other than in a written memorandum signed by the parties. This Agreement is effective upon signature by the Defendant and all of the attorneys for the government. Martin Harrell Special Assistant United States Attorney On behalf of the Defendant International Petroleum Corporation of Delaware (';!PC"), I have been authorized to sign this Agreement and bind IPC. IPC has been advlsed by its attorneys of IPC's rights, of possible defenses, of the Sentencing Guideline provisions, and of the consequences of entering into this Agreement. IPC voluntarily agrees to all of the terms of this Agreement. No promises or inducements have been made to!pc, other than those contained in this Agreement. No one has threatened or forced IPC in any way to ente'r into this Agreement. IPC is satisfied by the represent 1' attorneys Jn this matter. Date: Davi aine-11---- V.P. General Counsel Heritage-Crystal Clean, LLC Authorized Representative of Defendant International Petroleum Corporation I am counsel for International Petroleum Corporation of Delaware ("IPC") and hnve discussed every part of this Agreement with authorized representatives of IPC. Further, I have fully advised the authorized representatives of IPC of their rights, of possible defenses, of the Sentencing Guidelines' provisions, and of the consequences of entering into this Agreement. To my knowledge, the decision of IPC to enter into this Agreement is informed, and voluntary. ~..?0-~~~~ Robert R. Stauffer, Esquire Jenner & Block LLP Counsel for Defendant 1...Q.. AND NOW, this day of Memorandum of Plea Afireement is hereb Date: _I :J...,_/_7. "J_,_/J_t ~ I
Case 1:16-cr-00097-GMS Document 6-1 Filed 02/02/17 Page 1 of 2 PageID #: 28 ~ Cryst:al Clean 5 ST A TE OF ILLINOIS ) ) SS COUNTY OF KANE ) AFFIDAVIT OF DAVID P. CHAMELI 1. My name is David P. Chameli and I am the General Counsel for Heritage-Crystal Clean, LLC and its subsidiaries ("HCC"), including International Petroleum Corp. of Delaware ("IPC"). I am fully familiar with the corporate structure of HCC and IPC and the governance documents in place for each entity. I submit this affidavit in support of the Memorandum of Plea Agreement in the matter of United States of America v. lnternational Petroleum Corporation of Delaware in the U.S. District Court for the District of Delaware. 2. Further, IPC is a wholly owned subsidiary of HCC. IPC has officers but no directors. HCC has officers and directors and it is governed by its Second Amended and Restated Limited Liability Company Agreement dated January 3, 2010, as amended on February 5, 2013. Finally, HCC is a wholly owned subsidiary of Heritage-Crystal Clean, Inc. ("HCC!"). 3. I am f~iliar with the investigation by the United States Department of Justice (''DOJ") and the United States Environmental Protection Agency ("EPS") of a facility located in Wilmington, DE that was operated by IPC prior to HCC's acquisition ofipc on October 16, 2014. This statement is being offered in connection with IPC's Memorandum of Plea Agreement and Information prepared as part ofipc's agreement with the DOJ/EPA. 4. I have knowledge of the terms of the Memorandum of Plea Agreement and Information and I have presented such terms to the directors of HCC and the directors ofhcci. 5. As the sole shareholder ofipc, HCC has the authority to manage!pc's affairs including the execution of the Memorandum of Plea Agreement and Information. Through its customary business practices, through its executive management team and upon advice of counsel, HCC has reviewed the documents and approved the execution of such documents.
Case 1:16-cr-00097-GMS Document 6-1 Filed 02/02/17 Page 2 of 2 PageID #: 29 6. IPC is authorized to enter into the Memorandum of Plea Agreement and Information and all corporate formalities for such authorizations have been observed. David P. Chameli, V.P., General Counsel... STATE OF ILLINOIS ) ) SS COUNTY OF KANE ) This statement was acknowledged before me on January 18, 2017 by David P. Chameli, V.P., General Counsel of ge-crystal Clean, LLC. " OFFICIAL SEAL JESSlCA L FRIEDMAN AIOT.,RY PUBLIC- STATE OF ILLINOIS MY COMMISSION EXPIRES:OS/05/20