U.S. Caribbean ECA offenses bring $3 million fines

U.S. Attorney Gretchen Shappert for the District of the Virgin Islands reports that Ionian Shipping & Trading Corp., Lily Shipping Ltd., Stamatios Alekidis, Athanasios Pittas and Rey Espulgar have been convicted and sentenced for various pollution, record keeping, and obstruction of justice crimes on the motor tanker Ocean Princess in St. Croix, U.S.V.I. The defendants’ conduct included using fuel that exceeded the maximum allowable sulfur concentration in the U.S. Caribbean Emission Control Area and efforts to deceive U.S. Coast Guard inspectors about the source of the fuel being used aboard the M/T Ocean Princess.

The M/T Ocean Princess was owned by Lily Shipping Ltd. and operated by Ionian Shipping & Trading Corp., both Greece-domiciled companies. The vessel was engaged in transporting petroleum products throughout the Caribbean including from Limetree Terminals, St. Croix, U.S.V.I. The commercial manager of the vessel would authorize the Master of the vessel, Alekidis, to transfer petroleum cargo from the cargo tanks into the vessel’s fuel tanks, known as bunker tanks. As the owner and operator of the vessel, Lily Shipping Ltd. and Ionian Shipping & Trading Corp. were further responsible for ensuring the vessel used fuel that complied with the U.S. Caribbean ECA standards.

While vessels are operating within the U.S. Caribbean ECA, they must not use fuel that exceeds 0.10% sulfur by weight. Between January 3, 2017, and July 10, 2018, the M/T Ocean Princess entered into, and operated within, the U.S. Caribbean ECA using fuel that contained excessive sulfur on twenty-six separate occasions. The fuel was petroleum cargo that had been transferred to the fuel tanks as authorized by the vessel’s commercial manager.

Once notification was received from Alekidis, Espulgar coordinated with Pittas to make the transfers from the cargo tanks to the bunker tanks. Espulgar then falsified the Oil Record Book, Part II, by failing to record that cargo had been transferred to the bunker tanks. Pittas also falsified the Oil Record Book, Part I, by falsely recording that the fuel in the bunker tank originated from a shore-side company in St. Martin, F.W.I. Additionally, Pittas created fictitious Bunker Delivery Notes that claimed the fuel in the bunkers came from the same shore-side company in St. Martin, F.W.I. Between March 2, 2016, and February 6, 2018, nineteen separate fictitious Bunker Delivery Notes were created on and kept aboard the vessel.

U.S. Coast Guard inspectors boarded the M/T Ocean Princess on July 10, 2018, to conduct an inspection. During the inspection, the U.S. Coast Guard discovered that the vessel was using fuel with an excessive sulfur content. Chief Officer Rey Espulgar instructed some of the lower-ranking crewmembers to lie to the U.S. Coast Guard inspectors about where the fuel came from and to say the ship took on fuel in St. Martin, F.W.I., when in fact it did not.

Ionian shipping & Trading Corp. and Lily Shipping Ltd. will each pay a fine of $1,500,000.00, be placed on four years of probation, and implement an Environmental Compliance Plan. Alekidis,Pittas, and Espulgar were sentenced to three years of probation and ordered not to return to the United States on a ship during that time. Espulgar was also fined $3,000.00.

The U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency-Criminal Investigation Division conducted the investigation. Assistant U.S. Attorney Kim Chisholm and Department of Justice, Environmental Crimes Section Senior Trial Attorney Kenneth Nelson prosecuted the case.