WATER POLLUTION:

Ocean dumpers sail home leaving EPA agents in their wake

To hear Rick Stickle tell it, John Karayannides was the mastermind behind the dumping of 440 tons of oil-soaked grain from a U.S. cargo ship into the South China Sea in 1999.

Though Stickle owned the Iowa-based Sabine Transportation Co., Karayannides ran the company's shipping operations. And when a problem on a cargo vessel led to the contamination of a shipment of relief supplies bound for Bangladesh, Stickle said Karayannides came up with the plan and gave orders to throw the ruined grain overboard.

But a federal jury did not buy his story.

Stickle was convicted in 2005 of ordering the illegal dumping and in obstructing an investigation by the U.S. Coast Guard. He was sentenced to a hefty fine and 33 months in federal prison. After serving two years in a prison camp, six months in a halfway house and undergoing two more years supervised release, Stickle, now 59, is back home in Cedar Rapids, Iowa, working at a freight management company and trying to put his life back together.

Stickle said in a recent interview that he dreams of the day he will cross paths with Karayannides. And that is one area where Stickle and U.S. EPA are in agreement.

Karayannides, a Greek national, is among 16 fugitives currently sought by EPA for environmental crimes. His wanted poster can be found on the online fugitive directory -- www.epa.gov/fugitives -- operated through EPA's Office of Criminal Enforcement, Forensics and Training (Greenwire, Jan. 4).

When it comes to environmental fugitives, Karayannides falls into a popular category. He is one of five on the list whose cases have to do with illegal dumping from a cargo or cruise ship.

Fred Burnside, who served as director of OCEFT until last year, said last week that environmental cases involving cruise and cargo ships have a greater tendency of turning into fugitive situations simply because of the international crews that are usually involved.

"When they are indicted in the U.S., often they are released on their own recognizance," he said. "They go home and they don't return."

Karayannides, Stickle and four other Sabine executives and Juneau officers were originally charged in the case of the S.S. Juneau in early 2004. The government had already won a guilty plea and $2 million in fines from Sabine over the incident but felt there was enough wrongdoing in the case to pursue additional criminal charges against the six men.

According to the indictment, the problem began when the Juneau arrived in Bangladesh in late 1998 and crew members discovered that a diesel leak on the converted oil tanker had soaked the grain, which had been part of a joint U.N. and U.S. aid shipment. Over the following month, company officials and the Juneau's officers tried to find a way to dispose of the cargo legally but rejected various options as too costly.

Instead, they decided to mislead Coast Guard officials in Singapore and circumvent a shipboard pollution control monitoring system so grain could be pumped out to sea during their return voyage to the United States. The dumping took a week and involved 15 Bulgarians who were hired in Singapore to do the dirty work.

The men covered up the incident when U.S. officials met the ship in Portland, Ore. But the cover-up began to unravel after a younger member of the Juneau's crew blew the whistle to the Coast Guard, and EPA and other agencies began to investigate.

Interagency agreement on dumping

These days, EPA is working with the Coast Guard to make it harder for commercial ships to dump illegally in U.S. waters.

Instituted a little over two years ago, EPA's Vessel General Permit (VGP) program requires ship owners and operators to perform regular inspections and more closely monitor and keep records on any vessel discharge problems related to commercial vessels.

After some early confusion over how EPA would enforce that program, the agency announced last month that it had reached a memorandum of understanding (MOU) with the Coast Guard to help with compliance monitoring.

"The MOU acknowledges that the two agencies still have much work to do to thoroughly implement compliance assistance, compliance monitoring and enforcement under the permit program, but the MOU begins that process," said Greg Linsin, a former federal prosecutor who worked on the Juneau case and now works for the Washington, D.C., law firm Blank Rome LLP.

"This means that, in the near term, the Coast Guard will be inspecting the vessel records documenting compliance with VGP requirements and will be reporting evidence of noncompliance to the EPA for follow-up."

Linsin declined to go into specific about Karayannides' role in the Juneau case, but assistant U.S. attorney Thomas Watts-FitzGerald, who helped Linsin prosecute the case, said last week the evidence indicated that Karayannides was involved in both the hiring of the Bulgarian workers and helping to come up with the false explanation that was fed to Coast Guard officials.

But whether, as Stickle claims, Karayannides was truly the architect behind the Juneau dumping is up for debate.

During Stickle's trial, the government went to great lengths to show that Stickle was a micromanager who kept his finger on the pulse of every aspect of his company's operation.

"According to even the stated opinion of the 11th Circuit Court of Appeals, [Stickle] was an intensely hands-on manager who regularly involved himself in the business' daily operations and decisionmaking," Watts-FitzGerald said. "From the government's perspective and the evidence introduced at trial including that of former co-defendants and the president of Sabine, Mr. Stickle was the ultimate decisionmaker.

But if Karayannides was simply a 25-year-old business school grad who got in over his head, he did not stick around to try to prove it.

By the time the Juneau indictment was handed down, Karayannides was already on the run.

After realizing that Karayannides was running an embezzlement scheme within the company, Stickle had informed local police and had him arrested. When he was released on bond, just before the Juneau indictment came down, Karayannides fled to Greece -- along with what Stickle says was about $10 million in the company's money.

Finding Karayannides

Stickle said finding Karayannides today would not be hard. He said Karayannides is living in the open and that he even knows former business partners who have run into him while they were traveling in Greece.

But after making an example of him, Stickle wonders if U.S. authorities are really committed to bringing Karayannides to justice. Or perhaps, as some have suggested, the agency is more concerned with the publicity it gets from adding him to the EPA fugitive list.

When contacted last week, EPA declined to discuss the Karayannides investigation.

"The case against John Karayannides is still an active investigation and like every environmental fugitive, EPA is committed to bringing this individual to justice," the agency said in a statement.

Watts-FitzGerald explained that a host of extradition issues are standing in the way of the U.S. government getting its hands on Karayannides.

"Very, very few countries in the world, and Greece is not one of them, will extradite their own nationals," Watts-FitzGerald said. "This is not an extraditable offence from Greece to the United States."

Authorities do have an outstanding arrest warrant for Karayannides in case he decides to return to the United States. Also, the U.S. government has filed a notice on Karayannides through Interpol, the International Police Organization, so there is also the chance he could get picked up if he decides to travel to other Interpol countries.

But that is small comfort to Stickle, who said he occasionally prints EPA's wanted poster for Karayannides and hangs it on his wall.

"Yeah, there were some guys who did some things wrong in this case, there's no question about it. But how would I know, 9,000 miles [away], what these guys are doing," Stickle said. "If this was my job to be the daily operations person in charge of this, I'd be all over it. ... That's what [Karayannides] was supposed to be."

But because Karayannides ran, Stickle said he became the fall guy.

"They needed a trophy on the wall," he said. "They needed the owner of a U.S.-flag shipping company to show as an example."

As for Karayannides, Stickle said, "I don't wish anything but bad things to happen to him."

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