U.S.

Department of Justice
Environment and Natural Resource Division

Environmental Crimes Section

P.O. Box 7611
Washington, DC 20044

Telephone (202) 305-0321

Facsimile (202) 305-0396

January 30, 2015

Thomas M. Russo, Esq.

Michael Fernandez, Esq.
Michael Unger, Esq.
Freehill Hogan & Mahar, LLP
80 Pine Street
New York, NY 10005
Re:

United States v. Hachiuma Steamship Co., LTD

Dear Counsel:
This letter confirms the plea agreement between your client, Hachiuma Steamship Co.,
LTD (hereinafter, "Hachiuma" or "Defendant"), and the United States Attorney's Office for the
District of Maryland and the Environmental Crimes Section of the United. States Department of
Justice ("the United States" or "the government") in the above-captioned case. The terms of the
proposed agreement, which will be submitted the Court pursuant to Federal Rule of Criminal
Procedure 11(c)(1)(C), are as follows:
Waiver of Indictment and Criminal Charges. Defendant Hachiuma, having been
1.
advised through its representatives of the right to be charged by indictment, agrees to waive that
right and enter a plea of guilty to the charge brought by the government in a criminal information
filed in the District of Maryland, as set forth below. Defendant expressly admits that by and
through the acts of its agents and employees, specifically senior ship engineers, acting within the
scope of their agency and employment and at least in part for the benefit of the Defendant, it
committed the crime charged in the Criminal Information. The plea of guilty in the District of
Maryland is to be entered by Defendant through a senior corporate officer acceptable to the
government or counsel as authorized by resolution of the Defendant's Board of Directors to enter
a plea of guilty on Defendant's behalf and to appear and represent Defendant at sentencing in the
District of Maryland. Defendant's representative also will provide a resolution from Hachiuma
indicating its agreement to guarantee payments as set forth in paragraph 5 and to the terms set
forth in the accompanying Environmental Compliance Program. By entering this guilty plea,
Defendant hereby waives all objections to the form of the charging document, admits that it is in
fact guilty of the offense set forth in the Criminal Information and that the attached Joint Factual
Statement (Attachment A) dated this same day is an accurate statement of its conduct.
Defendant agrees to enter a plea of guilty to the following charge:

Count 1: Act to Prevent Pollution from Ships ("APPS"). Knowingly failing to

maintain an accurate Oil Record Book in which all disposals of oil residue and
discharges overboard of oily mixtures, slops from bilges and bilge water that
accumulated in machinery spaces were fully recorded in violation of Title 33,
United States Code, Section 1908(a) and Title 33, Code of Federal Regulations,
Section 151.25.
2.
The Penalties. Defendant understands that the statutory penalties applicable to a
corporate defendant for the felony count of the offense to which it is entering a plea of guilty is
as follows: a maximum fine of either $500,000.00, or up to twice the gross gain or loss resulting
from the unlawful conduct, pursuant to 18 U.S.C. 3571(c) and (d), a term of probation of 5
years, pursuant to 18 U.S.C. 3561(c)(1), and a special assessment of $400.00, pursuant to 18
U.S.C. 3013(a)(2)(13). For purposes of this plea, the Defendant understands and agrees that the
fine to be imposed is calculated pursuant to the alternative fines statute, 18 U.S.C. 3571(d) and
acknowledges that it realized a gain of at least $675,000 from the unlawful conduct of its
employee crew members. Defendant also understands that, in addition to any other penalty, the
Court may order the payment of restitution to any victim of the offenses pursuant to 18 U.S.C.
3663.
Applicability of Sentencing Guidelines. Defendant understands and
3.
acknowledges that, at sentencing, the Court is required to consider the United States Sentencing
Guidelines ("Sentencing Guidelines"), together with the other sentencing goals set forth in 18
U.S.C. 3553(a). Defendant understands and acknowledges that the Sentencing Guidelines,
including Chapter Eight that provide guidance for the sentencing of corporate defendants, must
be considered by the Court, except that pursuant to 8C2.1 and 8C2.10, the Sentencing
Guidelines which pertain to the sentencing of organizations do not determine the fine range in
cases involving environmental and obstruction crimes, including the making of false statements,
and the use of false writings. Instead,ithe fine is to be determined under 18 U.S.C. 3553 and
3571. All other sections of Chapter Eight of the Sentencing Guidelines that are applicable to
corporate defendants are applicable to this case, including provisions for probation and
community service.
Combined Plea and Sentencing Hearing. In view of the detailed nature of this
4.
proposed Plea Agreement, the Joint Factual Statement, the recommended remedial measures set
forth in the Environmental Compliance Plan, and the fact that the Defendant is a foreign
corporation without offices in the United States, the Defendant has advised the government that
it may request that the Court approve a combined plea and sentencing hearing. The United
States has agreed not to oppose the Defendant's request for a combined plea and sentencing
hearing. Further, in the event that the plea and sentencing are not combined, the United States
has agreed not to oppose the Defendant's request for sentencing to take place within 90 days
after the entry of the plea.

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5.
Sentencing Agreement. Pursuant to Rule 11(c)(1)(C) of the Federal Rules of
Criminal Procedure, and in return for the complete fulfillment by the Defendant of all of its
obligations under this agreement, the government and Defendant agree that the sentence to be
imposed by the Court includes a total monetary penalty consisting of $1,800,000.00 plus the
mandatory special assessment discussed below. The parties agree that the sentence should be
;
imposed as follows:
a.

Criminal Fine: $1,350,000.00 of the total monetary penalty shall be designated as

a criminal fine.

b.

Mandatory Special Assessment: In addition to the fine and pursuant to 18 U.S.C.

3013(a)(2)(B), Defendant shall pay a special assessment of $400.00 for the
count of conviction.

c.

Community Service: $450,000.00 of the total monetary penalty shall be paid as

organizational community service pursuant to 8B1.3 of the Sentencing
Guidelines and in furtherance of satisfying the sentencing principles provided for
under 18 U.S.C. 3553(a). Defendant and the government agree that the
organizational community service payment agreed to in this plea agreement shall
be made on the day of sentencing. The community service payments will be
made to the National Fish and Wildlife Foundation ("NFWF"). NFWF is a
charitable and nonprofit corporation established pursuant to 16 U.S.C.
3701-3709. Its purposes include the acceptance and administration of "private
gifts of property for the benefit of, or in connection with, the activities and
services of the United States Fish and Wildlife Service," and the performance of
"such other activities as will further the conservation and management of the fish,
wildlife, and plant resources of the United States, and its territories and
possessions for present and future generations of Americans." 16 U.S.C.
3701(b)(1), (2). NFWF is empowered to "do any and all acts necessary and
proper to carry out" these purposes, including, specifically, solicitation,
acceptance, and administration of "any gift, devise or bequest . . . of real or
personal property." 16 U.S.C. 3703(c)(1), (7). The parties agree that the
community service funds paid to NFWF should be divided equally and earmarked
for funding proposals from non-profit organizations to improve, restore or study
the water quality of the Chesapeake Bay or other related aquatic or marine
resources in the State of Maryland and to identify illegal and point source
pollution. Because the community service payments are designated as
community service by an organization, Defendant further agrees that it will not
seek any reduction in its tax obligations as a result of these community service
payments. In addition, since these payments constitute community service as part
of the Defendant's guilty plea, neither Defendant nor any related entity or agent
will characterize, publicize or refer to these community service payments as
voluntary donations or contributions.

d.

Payments: Defendant further agrees that if the terms of this Rule 11(c)(1)(C) Plea
Agreement are acceptdd by the Court, the criminal fine, special assessment and
community service payment shall be paid on the date of sentencing. Payment for
the criminal fine and special assessment are to be made in the form of a check
payable to the "United States District Court Clerk." Payment of the community
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service amount shall be made payable to the "National Fish and Wildlife
Foundation."
e.

Probation: Defendant will be placed on organizational probation for a period of 3

years from the date of sentencing pursuant to 18 U.S.C. 3561(c)(1) and
8D1.1 and 8D1.2 of the Sentencing Guidelines. The terms of probation shall
include the following specific provisions, in addition to the Court's standard
conditions:
(1)

No Further Violations: Defendant agrees that it shall commit no further

violations of MARPOL 73/78, federal, state or local law, and shall
conduct all its operations in accordance with the environmental laws of the
United States.

(2)

Payments: Payment in full of the monetary amounts set forth herein

including all special assessments, fines and restitution, and community
service.

Environmental Compliance Plan: Defendant agrees to develop, adopt,

establish, implement and fund a comprehensive environmental compliance
program, including the remedial measures set forth in the Environmental
Compliance Plan ("ECP"), attached hereto as Attachment B, consistent
with sentencing policies set forth in 8D1.4 of the Sentencing Guidelines.
This ECP applies and is limited to Pure Car Carrier (PCC) type/class
vessels manned and technically managed by Hachiuma under its Safety
Management System which call on port(s) in the United States during the
probationary :period. As set forth in Attachment B, the Defendant has
agreed to retain the services of an outside independent Third Party Auditor
and to fund a Court Appointed Monitor to review the adequacy of the
ECP, review the audits and report to the Court and Office of Probation.
,
APPS Monetary Award:. APPS grants a Court the discretion to issue a monetary
award of up to one-half of any criminal fine imposed to those who provide
information which leads to a conviction under the Act. Specifically, Section
1908(a) of APPS provides that, "In the discretion of the Court, an amount equal to
not more than one half of such fine may be paid to the person giving information
leading to conviction." The Defendant agrees that it will not oppose any motion
that the government may file in this case recommending that the Court exercise its
discretion and issue a monetary award to any crew member on board the M/V
Selene Leader who provided information that lead to a conviction in this case.

(3)

f.

g.

The Defendant agrees to continue to cooperate with the Government during any
ongoing investigation and prosecution of individual crewmembers from the M/V
Selene Leader. The Defendant's cooperation will include, but is not limited to,
production of documents requested by the Government, providing a custodian of
records (if requested by the Government) to authenticate documents at any
appropriate legal proceeding, providing a corporate representative (if requested by
the Government) to describe corporate policies and use of produced documents,
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paying the cost of transportation to and from the District of Maryland of any
crewmembers of the M/V Selene Leader identified by name in the Agreement on
Security to testify at the trial of crewmembers who have served on the MN Selene
Leader, upon request of the Government, and to provide for the care, salaries,
lodging, medical expenses, per diem and needed transportation for crewmembers
previously described in the Agreement on Security.
Application of the Agreement. This Agreement shall bind Defendant and all of its
6.
subsidiaries involved in ship ownership and/or technical management and/or manning of vessels
covered by the ECP including Defendant and all successors in interest, if applicable, and all
successors and assigns. Defendant shall provide to each undersigned prosecuting office
immediate notice of the following: any corporate name changes; any purchase or sale of vessels;
any purchase, sale or reorganization of ship management companies; or any other change
impacting upon or affecting this Plea Agreement and the ECP. Defendant understands and
agrees that it shall not engage in any action to seek to avoid the obligations and conditions set
forth in this Plea Agreement.
7.
Production and Authentication of Records. As part of this Plea Agreement,
Defendant agrees that upon the government's request it will produce documents relating to the
matters covered by the Criminal Information and Joint Factual Statement and provide a records
custodian to authenticate documents and business records and to describe company policies and
practices.
Statements. At the time of sentencing the United States will bring to the Court's
8.
attention, and the Court will be entitled to consider, all relevant information concerning the
Defendant's background, character and conduct.
9.
Non-Prosecution of Additional Offenses. As part of this Agreement and solely
because of the promises made by Defendant in this Agreement, the government agrees not to
criminally prosecute the Defendant in the District of Maryland for any environmental offenses or
and other offenses arising out of or concerning the government"s investigation of the M/V Selene
Leader in addition to those set forth in.the Criminal Information, and that are known to the
government at the time of the signing of this' Agreement. Defendant understands and agrees that
neither this paragraph nor this Agreement limits the prosecuting authority of any other sections
or divisions of the Department of Justice, including the U.S. Attorney of any other judicial
district, or any other federal, state or local regulatory or prosecuting authorities. Furthermore,
this Agreement does not provide or promise any waiver of any civil or administrative actions,
sanctions, or penalties that may apply, including but not limited to: fines, penalties, claims for
damages to natural resources, suspension, debarment, listing to restrict rights and opportunities
of Defendant to contract with or receive assistance, loans, and benefits from United States
agencies, licensing, injunctive relief, or remedial action to comply with any applicable regulatory
requirement. This Agreement applies only to crimes committed by the Defendant and has no
effect on any proceedings against any Defendant not expressly mentioned herein, including the
actual or potential criminal liability of any individuals.
10.
Breach of the Agreement. If the government determines that Defendant has
failed to comply with any provision of this Agreement, or has committed any crime within the
jurisdiction of the United States during the pendency of this Agreement, the government may, at
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its sole option, be released from its commitments under this Agreement in their entirety by
notifying Defendant, through counsel or otherwise, in writing. The government may also pursue
all remedies available under the law, irrespective of whether it elects to be released from its
commitments under this Agreement. 'Defendant recognizes that no such breach by it of any
obligation under this Agreement shall give rise to grounds for withdrawal of its guilty plea.
Defendant understands that should any such breach of this agreement occur, the government will
have the right to use against Defendant before any grand jury, at any trial, hearing or for
sentencing purposes, any statements made by its employees and agents, and any information,
materials, documents or objects provided by Defendant to the government pursuant to this
agreement without any limitation. In this regard, Defendant hereby waives any defense to any
charges which it might otherwise have under any statute of limitations, pre-indictment delay, or
the Speedy Trial Act for 90 days following any breach of the agreement, except to the extent that
such defenses existed as of the date 'of the signing of this Agreement.
11. Obstruction or Other Violations of Law. Defendant agrees that it will not commit
any offense in violation of federal, state, or local law between the date of this Agreement and its
sentencing in this case. In the event that Defendant: (i) engages in conduct after the date of this
Agreement which would justify a finding of obstruction of justice under 3C1.1 of the
Sentencing Guidelines, (ii) fails to accept personal responsibility for its conduct by failing to
acknowledge its guilt to the probation officer who prepares the Pre-sentence Report, or (iii)
commits any offense in violation of federal, state, or local law, then the government will be
relieved of its obligations to Defendant as reflected in this Agreement. Specifically, the
government will be free to argue seritericing guidelines factors other than those stipulated in this
Agreement, and it will also be frde to make sentencing recommendations other than those set out
in this Agreement. As with any alleged breach of this Agreement, the government will bear the
burden of convincing the Court of Defendant's obstructive or unlawful behavior and/or failure to
acknowledge personal responsibility by a preponderance of the evidence. Defendant
acknowledges that it may not withdraw its guilty plea because the government is relieved of its
obligations under the Agreement pursuant to this paragraph.
12. Information For Probation Office. Defendant agrees that it will provide all
information requested by the United States Probation Office in the District of Maryland.
Withdrawal of Plea Agreement. Defendant's plea will be tendered pursuant to
l3.
Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure. If a sentencing judge rejects this
Plea Agreement, then it shall be null and void at the option of either the government or
Defendant. In this regard, Defendant hereby waives any defense to any charges which it might
otherwise have under any statute of limitations, pre-indictment delay, or the Speedy Trial Act for
ninety (90) days following any nullification or voiding of the agreement, except to the extent that
such defenses existed as of the date of the signing of this Plea Agreement
Corporate Authorization. Defendant represents that it is authorized to enter into
14.
this Plea Agreement and to bind itserf and its subsidiaries involved in ship ownership and/or
technical management and/or manning of vessels covered by the terms of the Environmental
Compliance Plan. At the time of signing this agreement, Defendant shall provide to the United
States a written statement in the form of notarized legal documents certifying that Defendant is
authorized to enter into and comply with all of the provisions of this Plea Agreement. The

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resolutions further shall certify that Defendant's Board of Directors has authorized these actions,
and that all corporate formalities for such authorizations have been observed.
Waiver of Appeal. Defendant, through its authorized representatives, is aware
15.
that 18 U.S.C. 3742 gives the right to appeal the sentence to be imposed, and that other federal
statutes give a Defendant the right to appeal other aspects of the conviction. In consideration of
the Agreement with the United States as set forth herein, Defendant knowingly and voluntarily
agrees to waive the following rights:
a.

The right, conferred by .18 U.S.C. 3742, to appeal any sentence imposed by the
Court for the corivictibn of these offenses, except if the sentence imposed varies
from that agreed upon above under Rule 11(c)(1)(C);

b.

The right to appeal any aspect of Defendant's conviction, including any

pre-charge or pre-trial dispositions of motions or other issues; and

c.

The right to bring any collateral attack against Defendant's conviction or

sentence, except as it may relate to the effectiveness of its legal representation or
as permitted under subparagraph (a) above.

If Defendant breaches this Plea Agreement at any time by appealing or collaterally attacking
(except as to effectiveness of legal representation) the conviction or sentence in any way, the
United States may prosecute Defendant for any counts that were dismissed or not charged
pursuant to this Plea Agreement.
Voluntariness of the Plea. Defendant, through its authorized representatives,
16.
acknowledges that it has entered into this Plea Agreement freely and voluntarily and that it has
been fully advised by counsel, and that no threats or promises were made to induce it to enter the
guilty plea called for by this Plea Agreement.
*.
Court Not a Party. Defendant expressly understands that the Court is not a party
17.
to this Agreement. Defendant understands that the Court has the authority to accept or reject this
plea offer and is under no obligation to accept this plea offer made pursuant to Rule 11(c)(1)(C).
Defendant agrees that neither the prosecutor nor its counsel can make a binding prediction or
promise as to what decision the Court will make, and it further agrees that no one has made such
a binding prediction or promise.
Nature of the Agreement. Defendant and the government acknowledge that this
18.
Agreement is made pursuant to Rule 11(c)(1)(C) and Rule 11(c)(3) of the Federal Rules of
Criminal Procedure. If the Court rejects any material provision of this Agreement or seeks to
impose a sentence other than that recommended by the parties, each party reserves the right to
withdraw from this Agreement and the Defendant may withdraw its guilty plea.
Completeness of Agreement. This Agreement is the complete and only
19.
agreement between the parties. No promises, agreements or conditions have been entered into
other than those set forth in this Agreement. This Agreement supersedes prior understandings,
whether written or oral. This Agreement cannot be modified other than in a written

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memorandum signed by the parties or on the record in court. This Agreement is effective upon
signature by Defendant and all of the attorneys for the government.
If your client fully accepts each and every term and condition of this letter, please sign
and have the Defendant's corporate representative sign and return the original.
Sincerely,

ROD J. ROSENSTEIN
UNITED STATES ATTORNEY ;
DISTRICT OF MARYLAND

JOHN C. CRUDEN
ASSISTANT ATTORNEY
GENERAL
ENVIRONMENT & NATURAL
RESOURCES DIVISION

By:

By:

P. MICHAEL CUNNINGHAM
Assistant U.S. Attorney

Date

DAVID P. KEH
Date
Senior Trial Attorney
Environmental Crimes Section
U.S. Department of Justice

As an authorized representative of Defendant Hachiuma, I have read this Agreement and

carefully discussed every part of it with criminal defense counsel. I have been duly authorized to
sign and bind Hachiuma. Hachiuma voluntarily agrees to the terms set forth herein. Hachiuma's
attorneys have advised me of the corporation's rights, of possible defenses, of the Sentencing
Guidelines' provisions, and of the consequences of entering into this Agreement. No promises or
inducements have been made to Hachiuma other than those contained in this Agreement. No one
has threatened or forced Hachiuma in any way to enter into this Agreement.

Authorized Representative
Hachiuma Steamship Co., LTD

Date

We are criminal defense counsel for Hachiuma Steamship Co., Ltd. We have carefully discussed
every part of this Agreement with the authorized representative of Hachiuma. Further, we have
fully advised the authorized representatives of Hachiuma of the corporation's rights, of possible
defenses, of the Sentencing Guidelines' provisions, and of the consequences of entering into this
Agreement. To our knowledge, the decision of Hachiuma to enter into this Plea Agreement is an
informed and voluntary one.

TIiIOMAS RU SO, ESQ.

Defense Counsel

1to
/hi/ /5.--

MICHAEL FERNAN -Z SQ Date

Defense Counsel

MICHAEL
Defense Couns

I 1gs/cc-Date

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ATTACHMENT A
Statement of Facts
The undersigned parties hereby stipulate and agree that if this matter had gone to trial,
the government would have proven the following facts beyond a reasonable doubt. The parties
also stipulate and agree that the following facts do not encompass all of the evidence which
would have been presented had this matter gone to trial.
I. Background
On or about January 29, 2014, the MN Selene Leader ("Selene Leader") arrived in
Baltimore, Maryland. On or about January 30, 2014, the United States Coast Guard ("USCG")
boarded the ship pursuant to a scheduled annual Port State Control Examination.
The Selene Leader was a 59637 gross-ton cargo vessel registered under the flag
administration of Panama and bearing IMO number 9498597. The Selene Leader was engaged
in international commercial maritime operations and transported vehicles to and from various
ports in the United States of America, including the Port of Baltimore. The Selene Leader is
owned by Granville Shipholding S.A.with offices located at 53rd E. St., Urbanizacion Marbella,
MMG Tower, 16'11 Floor, Panama, Republic of Panama.
Defendant Hachiuma was a Japanese company with offices located in 74 Building, 74
Kyo-Machi, Chuo Ku, Kobe 650-0034, Japan. Defendant Hachiuma operated and managed the
Selene Leader. Defendant Hachiuma was also responsible for the implementation and
certification of the International Safety Management Code within the company's shore-side
management operations and on board the vessels it operated to ensure that company policies and
procedures were designed to ensure Compliance with international safety and environmental
requirements.
Engine room operations on large ships like the Selene Leader generate waste oil through
leaks and drippings of oil. This waste oil, together with water, detergents, solvents, and other
wastes, accumulates in the bottom or the "bilges" of the ship. This oily waste is collected,
stored, and then processed to separate the water from the oil and other materials using a pollution
prevention control device known as an Oily Water Separator ("OWS"). After passing through
the OWS, bilge waste containing less than fifteen parts per million of oil may be discharged
overboard. Engine room operations also generate waste oil and sludge through the purification
of heavy fuel oil and other activitieg. Such waste can either be incinerated on board the vessel or
offloaded on shore so that it can be disposed of in an environmentally responsible manner.
The United States is a party to an international treaty, the International Convention for
the Prevention of Pollution from Ships ("MARPOL"). MARPOL was implemented in the
United States by the Act to Prevent Pollution from Ships ("APPS"), 33 U.S.C. 1908, et. seq.
APPS regulations require that each, ship, other than an oil tanker, of more than 400 gross tons,
such as the Selene Leader, maintain an Oil Record Book ("ORB"). The ORB must fully reflect
tank-to-tank transfers of oil, the disposal of oil residue including sludge and waste oil, overboard
discharges of bilge water that has accumulated in machinery spaces, and thus may be
contaminated with oil, and any accidental or other exceptional discharges of oil or oily mixtures.
MARPOL, Annex I Regulation 17 and 33 CFR 151.25(h). The USCG routinely inspects
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ORBs on board vessels to determine whether the vessel has been discharging any oil or oily
mixtures in violation of MARPOL and APPS. 33 C.F.R. 151.23. The ORB must be
maintained on board the vessel for 3 years and be readily available for inspection at all times.
MARPOL, Annex 1, Regulation 17.
On large commercial vessels, there are numerous tanks for the storage of ballast, fuel,
bunkers, lubrication oil, sewage, waste oil, oily bilge water, potable water and sludge. It is a
common practice in this industry for certain crewmembers to measure the contents of these tanks
on at least a daily basis. The measure of these tanks is referred to as a "sounding" and the
measurement is often recorded in a document called a Sounding Book or Sounding Log. While
neither MARPOL nor APPS requires that a vessel maintain this document, the information
contained in it is often used by the ship's engineers for making entries in the ORB. The
Sounding Log can therefore provide:a critical analytical tool for ascertaining whether the ORB is
accurate. For example, if the Sounding Log shows a large drop in the contents of a particular
waste oil tank, there should be a corresponding entry in the ORB to explain the drop.
Noly Torato Vidad was the Chief Engineer on board the Selene Leader from on or about
August 31, 2013, through on or about January 31, 2014. Irene Tomo Tuale was the First
Engineer on board the Selene Leader from on or about September 26, 2013, through on or about
January 31, 2014. Chief Engineer Vidad and First Engineer Tuale were under contract by a
manning agency on behalf of Hachiuma.
Chief Engineer Vidad and First Engineer Tuale were responsible for the operation and
supervision of the Engine Department on board the Selene Leader, including the management,
treatment, storage, and disposal of oil residue, oily mixtures and machinery space operations.
Chief Engineer Vidad was also responsible for recording the movement (including tank-to-tank
transfers), discharge, and disposal of oil residue, oily mixtures, and machinery space bilge water,
including any non-accidental overboard discharges of oily waste from the Selene Leader, in the
vessel's ORB. The Master of the vessel signed the bottom of each page of the ORB on behalf of
Hachiuma.
II. Overboard Discharges of Oily Waste and the Falsification of the ORB
On or about November 28, 2013, Chief Engineer Vidad and First Engineer Tuale ordered
crew members in the engine department to drain and clean the bilge holding tank ("BHT") on the
M/V Selene Leader. The purpose of the BHT was to hold oily water from the bilges and other
parts of the vessel before being pumped to the OWS for processing. According to the ORB, the
contents of the BHT were internally transferred to another oily waste tank known as the bilge
separation oil tank ("BSOT"). The draining and cleaning of the BHT was properly done and
duly recorded in the ORB. However, during the time period from November 2013, to December
2013, there were various entries appearing in the vessel's engine log describing transfers from
bilge wells located in the engine room that were not recorded in the ORB.
On or about January 10, 2014, a crack developed in the cover of the condensate fan
connected to the waste oil tank ("WOT"). The purpose of such fan was to facilitate the
evaporation and removal of water through a condensation process prior to the waste oil being
burned in the vessel's incinerator. In order to prevent the condensate from leaking into the
engine room, an arrangement was made whereby the effluent was directed into a 55-gallon drum

through a flexible rubber hose. First Engineer Tuale, acting within the scope of his authority and
for the benefit, at least in part, of Defendant Hachiuma, set up the following procedures to
dispose of this leaking oily water. First Engineer Tuale ordered subordinate engineering
department crew members on board the Selene Leader to set up a housing around the condensate
fan to capture the leaking oily water. Instead of draining the oily water generated during the
condensate process to the BHT or BSOT, First Engineer Tuale ordered crew members to attach a
flexible rubber hose to the condensate drain pipe of the waste WOT so that the oily water would
drain to a 55-gallon drum. First Engineer Tuale then ordered crew members to use rubber hoses
and a wilden pump to transfer the oily water from the 55-gallon drum to the soot collection tank
("SCT").
Further, on several occasions during January 2014, First Engineer Tuale, acting within
the scope of his authority and for the benefit, at least in part, of Hachiuma, ordered crew
members to periodically transfer oily water and other oily waste from the vessel's turbo charger
filter cleaning station ("T/C Filter Tank") to the SCT using a wilden pump and rubber hose
instead of transferring such contents to the BSOT.
First Engineer Tuale discharged the oily wastes described above from the SCT to the
ocean twice during January 2014, using the SCT's eductor pump thus bypassing the ship's OWS
and other pollution prevention equipment. Chief Engineer Vidad did not make any entries in the
vessel's ORB for the transfers of the oily wastes to the SCT as described above or for the
discharges from the SCT to the ocean.
On or about January 24, 2014, Chief Engineer Vidad ordered crew members to secure the
wildin pump and rubber hoses used to transfer the oily water to the SCT.
On or about January 29, 2014, the Selene Leader entered the Port of Baltimore, Maryland
with an ORB that failed to include entries reflecting the internal transfers of oily water and oily
waste from the vessel's engine room bilges, condensate drain line of the WOT and TIC Filter
Tank to the SCT as well as the subsequent discharge of oily water and oily waste directly into the
ocean from the SCT. Upon inspection of the SCT by the USCG it was found to have been
cleaned and dry.
, the USCG conducted a Port State Control boarding and
On or about January 30, 2014,
inspection of the Selene Leader after the vessel arrived at the Port of Baltimore within the
District of Maryland. During the course of the boarding the USCG inspected the SCT and found
that the oil had been cleaned out of the tank. However, the USCG found trace oil in the
overboard discharge valve for the SCT. The USCG also requested that the engine crew operate
the OWS. The crew was able to otsirate the OWS with seawater but could not draw suction from
the BHT because it was nearly empty.
On or about January 30, 2014, during the course of the Port State Control boarding, Chief
Engineer Vidad, acting within the scope of his authority and for the benefit, at least in part, for
Hachiuma, knowingly caused a false and inaccurate ORB for the Selene Leader to be used and
presented to representatives of the USCG. The purpose was to hide the illegal discharges from
the USCG.

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The government's investigation did not reveal any evidence that either Defendant
Hachiuma's shore-side personnel or the vessel's Captain had any involvement with or
knowledge of this illegal conduct.
III. Additional Relevant Conduct
Prior to and during the USCG Port State Control boarding of the Selene Leader in the
Port of Baltimore, Maryland, Chief Engineer Vidad engaged in a pattern of conduct with the
purpose of hindering the USCG's investigation and hiding the illegal discharges of oil from the
vessel as described below. However, the government's investigation did not reveal any evidence
that either Defendant Hachiuma's shore-side personnel or the vessel's Captain had any
involvement with or knowledge of this illegal conduct.
I. Before on or about January 30, 2014, Chief Engineer Vidad destroyed the Sounding Log
for the Selene Leader. Specifically, Chief Engineer Vidad erased the entries made in the
Sounding Log, tore out pages from the Sounding Log, and threw the pages into a waste
container on board the Selene Leader.
2. On or about January 30, 2014, Chief Engineer Vidad instructed subordinate engine
department crew members on board the Selene Leader to make false statements to the
USCG. Specifically, Chief Engineer met with the Third Assistant Engineer and all three
Oilers on board the Selene Leader and instructed them not to tell the USCG that oily
waste on board the vessel was put into the SCT and then discharged overboard.
3. On January 30, 2014, Chief Engineer Vidad made a number of false statements to the
USCG. First, when asked about the 55-gallon drum and the attached hoses, Chief
Engineer Vidad falsely stated that 55-gallon drum was used to drain oil to the BSOT and
that he had never seen the hoses connecting the 55-gallon drum to the SCT. Second,
Chief Engineer Vidad falselY stated that he was not aware of anyone on board the Selene
Leader discharging oil overboard or any OWS bypass set up on board to discharge oily
waste overboard. Third, Chief Engineer Vidad falsely stated that he was not aware of
any daily Sounding Log on board the Selene Leader. When the USCG then showed him
a picture of the Sounding Log, Chief Engineer Vidad admitted that there was a Sounding
Log on board the vessel. Fourth, when the USCG asked the Chief Engineer Vidad why
some of the pages had been removed from the Sounding Log, he initially falsely stated
that he did not know why some pages of the sounding log had been removed but admitted
the next day to the USCG that he was the one who tore out the pages from the Sounding
Log.
4. On January 31, 2014, the USCG asked Chief Engineer Vidad if he was aware of the
arrangement to pump oil into the SCT and he falsely stated that he was not aware of such
arrangement. When the USCG then showed Chief Engineer Vidad a video of the oil
being pumped to the SCT, he initially denied seeing the arrangement but then admitted
that he had seen the arrangement.

13

ROD J. ROSENSTEIN
UNITED STATES ATTORNEY

JOHN C. CRUDEN
ASSISTANT ATTORNEY
GENERAL
ENVIRONMENT & NATURAL
RESOURCES DIVISION

By:

By:
0c1/j-A D P. KEH I1411.
Senior Trial Attorney
Environmental Crimes Section
U.S. Department of Justice

AM Date
P. MICHAEL CUNNINGHAM
Assistant U.S. Attorney

Date

As an authorized representative of Defendant of Hachiuma Steamship Co., LTD, I have read this
Joint Factual Statement and carefully discussed every part of it with criminal defense counsel for
Hachiuma Steamship Co., LTD. I hereby stipulate that the above Joint Factual Statement is true
and accurate to the best of my knowledge, and that had the matter proceeded to trial, the United
States would have proved the same beyond a reasonable doubt.

Authorized Representative
Hachiuma Steamship Co., LTD Defendant

Date

We are counsel for Hachiuma Steamship Co., LTD. We have carefully discussed every part of
this Joint Factual Statement with the authorized representatives of Hachiuma Steamship Co.,
LTD. To the best of our knowledge thi's is a true and accurate factual statement and provides a
sufficient factual basis for charges set forth in the Criminal Information and Hachiuma
Steamship Co., LTD's guilty pleas as set forth in the Plea Agreement.

3 "2
Tho s 1Iusso, Esq.
Counsel for Hachiuma Steamship Co., LTD.

ate

Michael Fernandez, Esq.

Counsel for Hachiuma Steamship Co., LTD

Date

Michael Unger, Esq.

Counsel for Hachiuma Steamship Co., LTD

Date

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