Jury finds two Aegean engineers guilty in magic pipe case

FEBRUARY 23, 2017 — A federal jury in Charleston, South Carolina, late yesterday convicted two chief engineers of the vessel, T/V Green Sky, of falsifying documents in order to conceal illegal discharges of oily bilge waste and obstruction charges.

Herbert Julian, who served as chief engineer of the vessel 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.

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.

In addition, it was revealed in court documents, which were unsealed after the verdicts were rendered, that 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 vessel first set sail in July 2014. The operation of marine vessels, like the T/V Green Sky, generates large quantities of oil-contaminated waste water. According to the Justice Department, this particular vessel had unusual internal leaks that produced greater quantities of oily waste than a normal ship of its age and construction.

Oily bilge waste must be removed from the vessel lest it fill up the bottom of the Engine Room and cause damage to equipment and jeopardize the safe handling of the ship. However, the law does not permit an oceangoing vessel to discharge these oily wastes directly into the sea.

The evidence presented to the jury showed that the Green Sky was regularly pumping contaminated and oily water directly overboard.

None of these discharges was disclosed as required.

The oil record book of the Green Sky was falsified to cover-up illegal overboard discharges of oily wastes 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 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.

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.

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.

The "Magic Pipe": Government exhibit shows hoses used to bypass the ship's oil water separator

greenskymagicpipe

Pooling oil from the intermediate shaft seal

greenskypooling

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