St. Croix, VI – Ionian Management, Inc., a New York City-based shipping company, has been sentenced to one year of probation and a $250,000 criminal fine for its role in a long-running scheme to illegally burn high-sulfur fuel oil aboard the M/T Ocean Princess, a violation of international and U.S. environmental regulations. The case, stemming from a 2018 U.S. Coast Guard inspection, reveals a deliberate effort to circumvent rules designed to protect air quality in the U.S. Caribbean Emission Control Area (ECA).
The investigation began in July 2018 when Coast Guard inspectors boarded the M/T Ocean Princess in St. Croix for a routine Port State Control inspection. They discovered the vessel was utilizing high-sulfur diesel fuel – prohibited within the ECA – despite regulations mandating the use of cleaner fuels to reduce harmful emissions. Evidence presented in court detailed how Ionian Management authorized the transfer of the illicit fuel from the ship’s cargo tanks for use in the main engine and auxiliary equipment, beginning as early as January 2016.
The scheme involved a concerted effort to deceive authorities. Chief Mate Rey Espulgar allegedly instructed crew members to lie about the fuel’s origin during the inspection. Captain Stamatios Alekidis routinely requested authorization from Ionian Management to transfer the high-sulfur cargo to be used as fuel. Once approved, Alekidis would direct Espulgar and Chief Engineer Athanasios Pittas to carry out the transfer. Crucially, the crew falsified the ship’s Oil Record Book (ORB) – a detailed log of fuel transactions – to conceal the illegal activity.
Pittas fabricated Bunker Delivery Notes, falsely claiming the fuel originated from a shore-side facility in St. Martin, French West Indies, and even secured counter-signatures from a fuel depot employee there to bolster the deception. Espulgar further compounded the fraud by failing to log the cargo transfer to the engine room in the ORB, Part II. These actions were specifically designed to mislead inspectors and cover up the violation of MARPOL Protocol – the International Convention for the Prevention of Pollution from Ships.
Key Facts
- Defendant: Ionian Management, Inc.
- Location: U.S. Caribbean Emission Control Area (ECA), specifically St. Croix, VI
- Statutes Violated: 33 U.S.C. 1908(a) – MARPOL Protocol – Prevention of Pollution from Ships
- Timeline: Illegal fuel use began January 2016, inspection July 2018, sentencing November 1, 2022
- Penalty: One year of probation and a $250,000 criminal fine.
- Co-Defendants: Ionian Shipping & Trading Corp. (Ionian ST) and Lily Shipping Ltd. (Lily) each sentenced to $1.5 million fines and four years’ probation.
This sentencing follows previous penalties levied against related entities. Ionian ST and Lily Shipping Ltd., the ship’s owner and operator respectively, were each ordered to pay $1.5 million in fines, serve four years of probation, and implement environmental compliance plans after pleading guilty to violations of the Act to Prevent Pollution from Ships (APPS) and obstruction of justice. The case underscores the EPA’s commitment to vigorously enforcing maritime environmental regulations and holding companies accountable for prioritizing profit over environmental protection. The full extent of the environmental damage caused by the prolonged use of high-sulfur fuel remains under assessment.
GrimyTimes will continue to follow this case and report on any further developments.
Source: EPA ECHO Enforcement Case Database
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