Michael G. Johnson, Emissions Fraud, Texas 2014

DALLAS, TX – Michael G. Johnson, 46, was sentenced to 28 months in federal prison and ordered to pay over $354,000 in restitution for perpetrating a fraudulent scheme involving fabricated emissions data submitted to the Environmental Protection Agency (EPA). The sentencing, handed down by U.S. District Judge Barbara M.G. Lynn on August 20, 2014, concludes a case that exposed a deliberate attempt to circumvent Clean Air Act regulations.

Johnson, formerly of Fort Worth, Texas, operated System Launch Associates, a company that purported to provide emissions testing services for foreign vehicle manufacturers seeking to sell their products in the United States. Between 2007 and 2009, and continuing from various locations including Austin, Dallas, Michigan, and Montana, System Launch promised to handle the necessary testing and application processes for EPA Certificates of Conformity – documentation legally required for vehicles to meet U.S. emissions standards. However, investigators found that no actual testing ever took place.

Instead, Johnson systematically fabricated test results, submitting fraudulent data to the EPA in applications for Certificates of Conformity. He charged clients upfront fees, promising completion of the testing process, and then delivered the falsified data upon approval of the applications. From August 2009 through June 2012, Johnson submitted multiple applications containing this fraudulent information, successfully obtaining the necessary certifications from the EPA based on the bogus data. More than a dozen clients received these fraudulently obtained certificates, allowing them to legally sell vehicles that hadn’t undergone proper emissions testing.

The investigation, led by the EPA’s Criminal Investigation Division and the Texas Commission on Environmental Quality, revealed a calculated effort to deceive both the agency and Johnson’s clients. Johnson’s scheme not only defrauded those who paid for legitimate testing services but also potentially compromised air quality by allowing vehicles with potentially harmful emissions to operate on U.S. roads. He was initially arrested in July 2013 in Billings, Montana, and pled guilty in January 2014 to one count of wire fraud and one count of making false statements under the Clean Air Act.

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Key Facts

Defendant: Michael G. Johnson, 46
Company: System Launch Associates
Location: Initially Fort Worth, TX, then various locations
Scheme: Fabricated emissions testing data for foreign vehicle manufacturers.
Statutes Violated: Title 18 U.S. Criminal Code, Clean Air Act (42 U.S.C. 7413(c)(2)(A) and 18 U.S.C. 1343)
Penalties: 28 months federal prison, $354,529 restitution

“False reports or incorrect data undercut EPA’s commitment to protect clean air for all Americans,” stated Vernon Jackson, Acting Special Agent in Charge of EPA’s criminal enforcement program in Texas. “EPA and its law enforcement partners will actively pursue those who undermine the integrity of programs designed to protect public health and the environment.” U.S. Attorney Sarah R. Saldaña of the Northern District of Texas emphasized the importance of enforcing environmental laws, calling it “a vital part of our work here.”

The case serves as a stark reminder of the potential consequences of environmental fraud and highlights the EPA’s commitment to ensuring the integrity of its regulatory programs. Assistant U.S. Attorney Errin Martin prosecuted the case, demonstrating a focused effort to hold individuals accountable for actions that threaten public health and environmental safety. The investigation underscores the ongoing vigilance required to combat schemes that exploit regulatory loopholes for financial gain.

Source: EPA ECHO Enforcement Case Database

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