Shipping company fined $3.5 million

TACOMA – A Norwegian cargo fleet operator was fined $3.5 million Tuesday for obstructing an investigation into illegal dumping of oil into the ocean, the U.S. attorney’s office said.

The company, Hoegh Fleet Services, admitted in March in U.S. District Court that an engineering officer on its 39,000-ton ship Minerva instructed his workers to build a pipe – the “magic pipe,” they called it – to bypass the ship’s oil-content sensor, a system for preventing waste oil from being discharged into the ocean.

The company had pleaded guilty to seven felony counts related to the misconduct, including obstruction of justice and making false statements to federal inspectors.

The engineer, Vincent Genovana, pleaded guilty last September to falsifying documents and agreed to cooperate with investigators. He was sentenced to 30 days in custody and deported to his native Philippines following his release.

Prosecutors said crew members repeatedly tried to conceal the activity by removing the pipe before arriving in port and by doctoring discharge records.

The case came to light after a whistleblower on the ship slipped a note to Coast Guard inspectors when the ship arrived in Vancouver, Wash.

U.S. District Judge Ronald Leighton on Tuesday granted prosecutors’ request that the unidentified whistleblower receive a $300,000 award.

In addition to the fine, Leighton ordered Hoegh to implement a compliance plan for the 38 vessels that call on U.S. ports.

A portion of the fine, $1.6 million, will be used to fund environmental projects that preserve and restore ecosystems along the coast lines of Washington and California.