Canadian Exec Charged in EPA Kickback Scheme

A Canadian national has been extradited to the United States to face charges related to a major fraud scheme involving the U.S. Environmental Protection Agency (EPA)-designated Superfund site Federal Creosote in Manville, New Jersey.

John Bennett, the former Chief Executive Officer of Bennett Environmental Inc., was extradited on Friday and made his initial appearance in the U.S. District Court for the District of New Jersey in Newark. He is charged with participating in a conspiracy to pay kickbacks and commit fraud at the Federal Creosote site.

According to a felony indictment, Bennett carried out the conspiracy by providing kickbacks to Gordon McDonald, the project manager at the Federal Creosote site, in order to influence the award of sub-contracts at the site and inflate the prices charged to the EPA by the prime contractor.

The kickbacks were in the form of money transferred by wire to a co-conspirator’s shell company, lavish cruises for senior officials of the prime contractor, and various entertainment tickets. The conspiracy began at least as early as December 2001 and continued until approximately August 2004.

The clean-up at Federal Creosote is partly funded by the EPA. Under an interagency agreement between the EPA and the Army Corps of Engineers, prime contractors oversaw the removal, treatment and disposal of contaminated soil as well as other operations at the Federal Creosote site.

Bennett faces up to 5 years in prison and a $250,000 fine on the fraud conspiracy charge and up to 10 years in prison and a $1 million fine on the major fraud charge against the United States. His co-conspirator, Gordon McDonald, was convicted on September 30, 2013, on 10 counts, including the two charges pending against Bennett. McDonald was sentenced to a 14-year term of imprisonment on March 4, 2014.

The investigation was conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation with assistance from the Antitrust Division’s Foreign Commerce Section and the Criminal Division’s Office of International Affairs. Anyone with information concerning bid rigging, kickbacks, tax offenses, or fraud relating to sub-contracts awarded at the Federal Creosote or Diamond Alkali sites should contact the New York Field Office of the Antitrust Division at 212-335-8000.

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