Arnold N. Graham, Fraud, MO 1986

Kansas City, MO – A former Trans World Airlines (TWA) wastewater treatment plant supervisor was sentenced in September 1986 following a guilty plea to charges of conspiracy and falsifying reports to federal environmental authorities. Arnold N. Graham, responsible for overseeing wastewater discharge at TWA’s Kansas City overhaul base, engaged in a scheme to receive illegal kickback payments from a chemical supplier in exchange for preferential treatment.

The investigation, conducted by the Environmental Protection Agency (EPA) and subsequently prosecuted, revealed that Graham accepted undisclosed payments from the supplier. In return, Graham ensured continued business with TWA and, crucially, falsified Discharge Monitoring Reports (DMRs) submitted to the Missouri Department of Natural Resources. These DMRs are legally required documents detailing the composition and volume of wastewater discharged, ensuring compliance with the Clean Water Act.

Federal prosecutors detailed how Graham deliberately manipulated the reports to conceal potential violations of water quality standards. This deception allowed TWA to avoid scrutiny and potentially bypass necessary upgrades to their wastewater treatment processes. The scheme continued undetected until an internal audit at TWA, coupled with EPA oversight, uncovered discrepancies in the reported data and raised suspicions about Graham’s dealings with the chemical supplier.

On July 30, 1986, Graham pleaded guilty to one count of conspiracy (18 U.S.C. 371) and one count of submitting false statements to the EPA in violation of the Clean Water Act, specifically Section 309(c)(2) (33 U.S.C. 1319(c)(2)). The government argued that Graham’s actions not only constituted a breach of public trust but also posed a potential threat to the environment and public health.

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Sentencing and Restitution

At his sentencing hearing on September 18, 1986, Graham received a 42-month prison sentence, with all but six months suspended. He was also ordered to pay a $10,000 fine on the conspiracy charge, and an additional six months incarceration and $10,000 fine for the false reporting offense – sentences to run consecutively. Beyond imprisonment and fines, Graham was placed on 60 months of probation, required to perform 200 hours of community service, and ordered to pay $21,075 in restitution to TWA to cover costs associated with the investigation and remediation.

Key Facts

Defendant: Arnold N. Graham
Location: Kansas City, Missouri
Year: 1986
Statutes Violated: 18 U.S.C. 371 (Conspiracy), 33 U.S.C. 1319(c)(2) (Clean Water Act – False Statements)
Scheme: Accepted kickbacks from chemical supplier in exchange for business and falsified wastewater discharge reports.
Penalty: 42 months incarceration (6 months served), $20,000 in fines, 60 months probation, 200 hours community service, $21,075 restitution.

The case serves as a stark reminder of the potential for corruption within environmental compliance and the EPA’s commitment to pursuing individuals who prioritize personal gain over environmental protection and public safety. The falsification of DMRs undermines the integrity of the Clean Water Act and compromises the ability of regulatory agencies to effectively monitor and enforce environmental regulations.

Source: EPA ECHO Enforcement Case Database

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