Prince George’s County, MD – A.W. Stevens Disposal Systems, Inc. and several of its principals faced hefty fines and, in one case, imprisonment after pleading guilty to defrauding the U.S. Navy and violating the Clean Water Act in 1999. The scheme involved operating unpermitted solid waste transfer stations in Prince George’s and St. Mary’s counties, and illegally diverting waste to cheaper facilities in Virginia while falsely billing the Navy for disposal at more expensive Maryland and D.C. locations.
Federal prosecutors revealed that A.W. Stevens Disposal had secured contracts with Patuxent River Naval Air Station, Indian Head Naval Ordinance Station, and the U.S. Naval Academy in Annapolis. These contracts stipulated that waste generated at the facilities would be disposed of at permitted landfills within Maryland and the District of Columbia. However, the company circumvented these requirements by transporting the waste across state lines to Virginia landfills, where tipping fees were significantly lower.
The deception was carried out through the submission of falsified documentation to the Navy, indicating that the waste had been properly disposed of in the designated jurisdictions. This allowed A.W. Stevens Disposal to bill the government for the higher disposal costs, resulting in an overcharge of approximately $800,000. The operation of the illegal transfer stations also had environmental consequences. Investigators discovered that truck washing activities at the sites led to pollutants entering a tributary of the Potomac River, violating environmental regulations.
Legal Ramifications & Penalties
The company was initially indicted on December 16, 1998, charged with violations of the Clean Water Act, specifically 33 U.S.C. 1319(c)(2)(A), which prohibits the knowing treatment, storage, or disposal of pollutants without a permit. In June 1999, all defendants entered guilty pleas. The sentencing, delivered on September 24, 1999, was multi-faceted and aimed at both punishing the perpetrators and compensating the government for its losses.
A.W. Stevens Disposal Systems, Inc. was ordered to pay a special assessment fee of $6,800, along with $20,000 in state fines and a substantial $600,000 in federal fines. Furthermore, the company was directed to pay $2,000,000 in restitution to the U.S. government to settle the related False Claims Act liability. St. Mary’s Disposal, a related entity, faced a $2,400 special assessment and $700,000 in federal fines. Individual penalties were also levied: Michael Stevens received a 10-month prison sentence, 24 months of probation, and a $30,000 fine. Albert Stevens, Patrick T. Stevens, and Susan Goolsby Stevens were each ordered to pay $40,000 in state fines.
Key Facts
- Defendant: A.W. Stevens Disposal Systems, Inc.
- Crime: Fraud and Clean Water Act violations
- Location: Prince George’s and St. Mary’s Counties, Maryland
- Year: 1999
- Victim: U.S. Navy
- Financial Loss: Approximately $800,000 in fraudulent billing, plus environmental damage.
- Statute Violated: 33 U.S.C. 1319(c)(2)(A) (Clean Water Act)
- Restitution/Fines: Over $3.3 million in fines and restitution.
The case serves as a stark reminder of the potential for fraud within government contracting and the importance of environmental compliance. The investigation and prosecution, led by federal and state authorities, underscored the commitment to holding companies and individuals accountable for exploiting both financial and environmental resources.
Source: EPA ECHO Enforcement Case Database
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