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First Charges Brought For Smuggling New Ozone Depleting Chemical

WASHINGTON, D.C. -- The Justice Department today announced the latest round of criminal charges and guilty pleas stemming from its ongoing investigation into the smuggling of ozone depleting chemicals into the United States. With the five cases announced today against seven individuals and one business, the Justice Department has now charged a total of 62 individuals and seven businesses. Last week, the Justice Department obtained guilty pleas in Philadelphia, in the second largest of six smuggling cases announced in January 1997. The cases are the result of an ongoing nationwide enforcement initiative launched by the Justice Department, the Customs Service, the Environmental Protection Agency (EPA), and the FBI. The initiative aims to crack down on a black market in Freon and a new ozone depleting substance known as Halon 1301. "We made a promise to Freon smugglers last year and we're going to keep it," said Attorney General Janet Reno. "We will find you, we will shut you down and we will convict you. We will not permit you to endanger our ecosystem and our children's future for the sake of a few dollars." The importation of a class of chemicals known as CFCs, has been banned in the U.S. according to its obligation under the international agreement known as the Montreal Protocol. The agreement, signed in 1987, established a phase-out schedule for CFCs leading to their outright ban in the United States and other developed countries as of January 1996. CFCs and related substances destroy the ozone layer and have been banned to protect the public from cancer causing exposure to harmful ultra-violat rays. Freon, the brand name for a chloroflourocarbon also known as CFC-12, is used as a refrigerant in automobile air-conditioning systems, and has been the primary chemical smuggled into the country for domestic use. Recently, attempts have been made to smuggle a new chemical, known as Halon 1301, into the domestic market, which is used primarily as a fire suppressant. The charges and guilty pleas were filed by U.S. Attorney's offices in Texas, the Virgin Islands, New Jersey, Michigan, Arizona, and Pennsylvania.

The following districts brought charges today:

Southern District of Texas (Houston) Filed a four-count indictment charging two individuals, Ernesto Medina and Antonio G. Medina, and a corporation, Medina Forwarding Corporation, with conspiracy, and Clean Air Act and Custom's violations for illegally importing 1,200 cylinders of Russian-manufactured CFC-12 into the United States through Mexico.

This case represents one of many cases involving CFC smuggling along the Texas-Mexican border brought by the Houston U.S. Attorney's Office.

District of the Virgin Islands

Filed a one-count information against two individuals, Roger Kainth and Lamal Abdallah, charging conspiracy for illegally importing 2,400 cylinders of Mexican manufactured CFC-12 from Mexico to St. Croix and St. Thomas.

The following cases were filed recently:

District of New Jersey (Monday, February 23, 1998)

Filed a four-count indictment against Gretchen M. Reynolds, a principal of Reynolds Services, Inc., charging misuse of a government seal, and mail fraud for a scheme designed to defraud a U.S. businessman into purchasing 10,000 pounds of recycled Halon 1301 that had not been approved for import by the EPA.

This case represents the first prosecution in the United States related to an illegal Halon 1301 importation.

Eastern District of Michigan -- Detroit (January 27, 1998)

Filed a one-count information against Cross Mooradian charging Customs violations for smuggling 120 pounds of CFC-12 from Canada to the United States.

Mooradian has pleaded guilty to the charge and is awaiting sentencing.

District of Arizona (December 19, 1997)

Filed a one count information against Jesus Contreras charging Clean Air Act violations for bringing 240 pounds of CFC-12 into the United States from Mexico.

Contreras is currently awaiting sentencing.

In addition to the cases announced today, the Justice Department obtained guilty pleas last week from three indiviuals and two corporations in the second largest smuggling case of the six announced on January 9, 1997. Richard Pelati, R. Colin Dayton, Christopher Farham, and two corporations, Refrigerant Management Services Inc., and R & C Sales plead guilty in U.S. District Court in Philadelphia on February 17, to illegally smuggling more than 750 tons of CFC-12 into the United States from the United Kingdom. Sentencing is schedeled to take place on May 7, 1998. To date, 56 individuals have been convicted for charges related to CFC-12 smuggling, with more than 30 of those convictions occurring within the last year. Also, five corporations have plead guilty. Individuals convicted of CFC smuggling have been sentenced to up to 57 months in prison. In addition to the prison sentences against the individuals, these convictions also have led to the seizure of hundreds of tons of CFC-12 and $58 million in fines and restitution. An individual convicted of a criminal Clean Air Act or Custom's charge faces a maximum penalty of 5 years in prison and a $250,000 fine per count. While a corporation convicted of such a charge faces a $500,000 fine per count. An indictment represents charges brought by a federal grand jury and is not itself evidence. The government has the burden of proving the charges at trial beyond a reasonable doubt. Investigations under the National CFC Enforcement Initiative into the illegal importation and sale of CFC-12, Halon 1301 and other controlled substances are continuing. ###