Art Krueger, Hazardous Waste Fraud, CA 1998

SACRAMENTO, CA – Art Krueger was sentenced in December 1997 to 21 months in federal prison and 36 months of probation following a conviction for wire fraud and violations of the Resource Conservation and Recovery Act (RCRA). The case, originating in 1996, revealed a complex scheme involving the illegal handling, storage, and fraudulent disposal of hazardous waste and explosives in Sacramento.

Krueger, an officer or employee of SafeWaste, worked alongside Frank J. Fiorillo, Jr., President, CEO, and majority shareholder of West Coast Airways Industries, Inc. The pair leased a warehouse facility and operated the businesses, allegedly contracting with a Michigan-based company to manage and dispose of corrosive hazardous materials known as “Slurry” and “Eclipse.” However, rather than legitimately disposing of the waste, SafeWaste provided falsified certificates of disposal to the Michigan company, then illegally transported and stored the hazardous materials at the Sacramento warehouse.

The scheme began to unravel in 1993 when a routine inspection by the Sacramento Fire Department uncovered a disturbing cache of unauthorized materials within the warehouse. Firefighters discovered rocket motors, warheads, explosives, and artillery shells – none of which had received the necessary federal permits for storage or handling. This discovery prompted a full-scale investigation by federal authorities.

On March 21, 1996, both Krueger and Fiorillo were indicted on 16 counts, including 12 counts of wire fraud (18 U.S.C. 1343), two counts of violating RCRA – specifically illegal storage (42 U.S.C. 6928(d)(2)(A)) and transporting hazardous waste to an unpermitted facility (42 U.S.C. 6928(d)(1)) – and two counts of unlawfully receiving explosives (18 U.S.C. 842(a)(3)(A)). The indictment detailed how the defendants knowingly endangered public safety and circumvented environmental regulations for financial gain.

Following a trial, Fiorillo was convicted on 11 of the 16 counts, while Krueger was convicted on nine. Both men were found guilty of seven counts of wire fraud and the two RCRA violations. Fiorillo additionally faced conviction on the two counts related to the unlawful receipt of explosives. Fiorillo received a harsher sentence of 51 months imprisonment and a $75,000 fine, alongside an order to pay $14,000 in restitution to the Sacramento Fire Department. Krueger’s sentence included 21 months incarceration, 36 months probation, and $13,976 in restitution to the fire department.

Key Facts

Defendant: Art Krueger & Frank J. Fiorillo, Jr.
Location: Sacramento, California
Year of Conviction: 1997
Charges: Wire Fraud, RCRA Violations, Unlawful Receipt of Explosives
Hazardous Materials: “Slurry” and “Eclipse”
Penalties: Krueger – 21 months imprisonment, 36 months probation, $13,976 restitution. Fiorillo – 51 months imprisonment, $75,000 fine, $14,000 restitution.

The case highlights the serious consequences of improperly handling hazardous waste and the potential dangers posed by illegal storage of explosives. It underscores the EPA’s commitment to enforcing environmental regulations and holding individuals accountable for endangering public health and safety.

Source: EPA ECHO Enforcement Case Database

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