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A decade of U.S. Department of Justice criminal prosecutions of shipping companies for pollution-related violations has fueled maritime practices across the country and spilled over into white-collar defense and government-contract work. In the past five years, the Justice Department’s environmental crimes section or individual U.S. attorney’s offices have brought nearly 100 cases, including some separate prosecutions of individuals and shipping companies from the same investigation. Some cases involve illegal discharge of oil, plastic, pollution or chemicals in U.S. waters, but many involve how the shipping companies record discharges outside U.S. waters that violate U.S. law and international conventions. In the record-keeping cases filling dockets in U.S. port cities, government agencies charge companies with making false statements and violating the Act to Prevent Pollution from Ships by failing to maintain an accurate oil record book. Some cases also involve obstruction of justice and conspiracy charges. The high priority the Justice Department’s environmental crimes section places on these cases results in legal work representing the companies that own the ships and individual crew members, said Austin P. Olney, a partner in the Boston office of New York-based LeBoeuf, Lamb, Greene & MacRae. U.S. lawyers help the companies release the ship by posting bond and counseling the company representatives questioned during grand jury investigations, Olney said. Employees may also need separate counsel if they’re targets of criminal prosecution, he added. “It’s an international convention that’s implemented domestically, Olney said. “When it’s enforced domestically, it results in the need to lawyer up the company that is the target of the investigation.” Criminal charges raise the ante for the company and call for white-collar criminal defense expertise, said Olney, who specializes in maritime work. Winston & Strawn has 11 U.S. maritime and admiralty lawyers, up from three nine years ago, said Thomas Mills, the managing partner of the Chicago-based firm’s Washington office. The firm’s caseload in the area is growing, including representation of companies that were investigated by the U.S. government but not prosecuted, said Mills, who specializes in health care and maritime law. “It’s quite a cottage industry,” Mills said. “The Justice Department will take pretty expansive views of its jurisdiction.” The Justice Department’s cases involve companies dumping huge volumes of waste oil into the ocean, said Richard A. Udell, senior trial attorney at the environmental crimes section. Udell said that companies that manage their pollution waste stream by cheating are committing crimes and gaining an unfair competitive advantage. “It’s one thing to have . . . a single negligent oil spill,” he said. “It’s another to be continually, repetitively and deliberately violating the law.” Justice Department scrutiny has also fueled compliance-advice work for shipping companies at Philadelphia’s Blank Rome; Holland & Knight; Winston & Strawn; and Washington-based Venable. Jud Starr, who heads Venable’s environmental practice group, said settlements that contain compliance requirements are boosting the demand from other companies. “With each new settlement, the compliance program has new bells and whistles,” Starr said. “It is important for the rest of the shipping industry to monitor what those changes are and reach that new standard.” Shipping companies are starting to fight back, said Michael G. Chalos, a partner at maritime boutique Chalos, O’Connor & Duffy of Port Washington, N.Y. He cited a California federal case in which the company and the chief engineer won not guilty jury verdicts in June for charges of conspiracy, false statements, Act to Prevent Pollution from Ships violations, obstruction and destruction of evidence. USA v. Artemios Maniatis, No. 07-24 (E.D. Calif.). “The government has gone overboard on these cases,” Chalos said. “There are much better ways than unilateral investigation and prosecution, which is turning out not to be effective as a deterrent.” Starr is also representing Overseas Shipholding Group Inc. in the U.S. government’s appeal of a Texas federal court’s order dismissing some criminal charges against the company. The lower court ruled the United States was wrong to seek criminal prosecution of a foreign-flag ship for violations of U.S. Coast Guard regulations outside U.S. territory.

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