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Company, owner to pay $19M for Leland Superfund site, back taxes

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LELAND, NC (WWAY) -- A company and its owner have pleaded guilty in federal court for violations of environmental regulations that led to a Superfund site in Leland.

The US Attorney's Office says P&W Waste Oil Services, Inc., and its owner, Benjamin Franklin Pass, 60, pleaded guilty today to violations of the Toxic Substances Control Act, as well as for making false statements and failing to pay several years of due taxes. The defendants admitted to, among other things, the unlawful handling of a toxic substance. The resulting contamination was so widespread that the company's facility has been declared a Superfund Site, prosecutors said.

"This disregard of environmental protections resulted in significant contamination," United States Attorney Thomas G. Walker said in a news release. "The defendant's conduct placed an economic burden on the United States and an unreasonable risk to the health and safety of the citizens of North Carolina.”"

As part of the plea agreements, P&W agreed to pay restitution in the estimated amount of $19 million, as compensation to victims Colonial Oil and International Paper for the costs associated with the storage and proper disposal of PCB-contaminated used oil as well as any monetary losses associated with the illegal handling, storage and transportation of toxic substances. P&W also agreed to a five-year term of probation and to take remedial action to address the environmental contamination at its facility in eastern North Carolina and other leased property in eastern North Carolina, including but not limited to, the proper treatment and/or disposal of PCB-contaminated waste oil.

Pass agreed to pay $538,587, plus interest, in restitution to the Internal Revenue Service for taxes he owed.

According to the charges filed in federal court in Raleigh and information stated in open court, the P&W facility in Leland included a tank farm consisting of multiple tanks ranging from 20,000 gallons to 500,000 gallons. The facility is located approximately 0.1 miles to the east of the Cape Fear River and a US Fish and Wildlife recognized wetland.

As part of its business operations, P&W transported, processed, and marketed on-specification used oil (containing less than 2 parts per million Polychlorinated Biphenyls (PCBs)). P&W received the used oil from small and large companies, such as automotive service stations, transformer repair companies, and marinas. P&W also conducted tank cleaning and waste removal.

Prosecutors say in July 2009, the defendants knowingly failed to comply with regulations covering PCB-3 contaminated used oil by unlawfully transporting, storing, and disposing of used oil contaminated with PCBs. Specifically, waste oil containing fluid from five PCB-transformers was transported from a site in Wallace, SC, to the P&W facility. The investigation revealed that the waste oil was contaminated with PCB concentrations in excess of 500 parts per million.

Despite knowledge of the investigation into the defendants’ illegal handling of PCB-contaminated used oil, the defendants continued to unlawfully dilute the contaminated used oil. The mishandling of the PCB-contaminated used oil resulted in the wide-spread contamination at the site and other sites, resulting in millions of dollars in clean-up costs.

PCBs pose such an unreasonable risk of injury to human health and the environment that effective January 1, 1978, Congress banned the production of PCBs and mandated that no person may distribute in commerce, or use any PCBs other than in a totally enclosed manner, and directed the Environmental Protection Agency to promulgate rules phasing out the manufacture of PCBs and regulating their disposal.

Currently, efforts are underway to clean up the contamination at P&W’s facility in Leland, which has been designated a Superfund site by the EPA. Superfund is the name given to the federal environmental program established to clean up the nation’s uncontrolled hazardous waste sites.

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