Nicholas Peregonow, Mail Fraud and Wire Fraud, Illinois 2010

Chicago, IL – A Chicago contractor was sentenced last week after pleading guilty to defrauding the United States Postal Service (USPS) and illegally dumping industrial waste into the city’s sewer system. Nicholas Peregonow, 53, received a 14-month prison sentence, followed by 38 months of probation, for his crimes uncovered in a joint investigation by the Environmental Protection Agency’s Criminal Investigation Division (EPA-CID) and the USPS Office of Inspector General (OIG).

The investigation revealed that Peregonow, contracted by the USPS, had been systematically dumping approximately 1,900 gallons of unused soap down a drain at the USPS parking structure located near Canal and Harrison Avenues since at least December 2009. This illicit discharge caused significant foaming within the Metropolitan Water Reclamation District of Greater Chicago’s (MWRDGC) sewer system, posing a potential environmental hazard and burdening the city’s wastewater treatment infrastructure.

According to court documents, Peregonow avoided proper disposal costs by illegally diverting the soap—a material he was responsible for managing—into the public sewer system. This act wasn’t simply an environmental violation; investigators determined it constituted a deliberate scheme to embezzle funds and defraud the USPS. Instead of paying for legal and environmentally sound waste disposal, Peregonow pocketed the difference, effectively stealing from the federal government.

Peregonow was initially charged on December 15, 2010, with two counts of violating 18 U.S.C. 1341, pertaining to mail fraud and wire fraud, and one count of violating 18 U.S.C. 641, covering the embezzlement and theft of public money, property, or records. He subsequently entered a guilty plea to all three charges. The investigation meticulously traced the financial discrepancies and connected them directly to the illegal dumping activity.

In addition to his incarceration and probation, Peregonow was ordered to pay a $1,000 fine and a substantial restitution amount of $102,510. This restitution is intended to cover the costs incurred by the MWRDGC in addressing the consequences of the illegal dumping, including cleanup efforts and potential damage to the sewer system. The case highlights the EPA and USPS’s commitment to holding accountable those who prioritize profit over environmental responsibility and fiscal integrity.

Federal prosecutors emphasized that this case serves as a warning to other contractors who might consider cutting corners at the expense of the environment and public funds. The EPA-CID and USPS-OIG continue to collaborate on investigations targeting similar fraudulent and polluting activities nationwide. Sources within the MWRDGC expressed relief at the sentencing, noting the significant impact illegal dumping has on the district’s operational costs and the health of the Chicago River.

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Key Facts

Defendant: Nicholas (Nick) Peregonow
Location: Chicago, Illinois
Waste Dumped: Approximately 1,900 gallons of unused soap monthly
Statutes Violated: 18 U.S.C. 1341 (Fraud), 18 U.S.C. 641 (Embezzlement & Theft)
Sentence: 14 months incarceration, 38 months probation
Financial Penalties: $1,000 fine, $102,510 restitution
Agencies Involved: USEPA-CID, US Postal Service-OIG

Source: EPA ECHO Enforcement Case Database

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