Samuel Gratz, Environmental Crime, PA 1994

Philadelphia, PA – Samuel Gratz, former President and Chairman of Lannett Pharmaceutical, Inc., and Vice-President of Astrochem Corp., has exhausted his appeals following a 1992 conviction for multiple environmental crimes. The case, brought by the Environmental Protection Agency (EPA), centered around the illegal handling and transportation of hazardous waste between Lannett’s Philadelphia facility and Astrochem’s New Jersey plant.

According to court documents, Gratz directed employees to transport highly dangerous substances – including phosgene and sodium cyanide – along with other ignitable, reactive, and corrosive wastes, from Astrochem to Lannett. Rather than adhering to proper disposal protocols, the waste was stored at the Philadelphia facility, circumventing both federal regulations and posing a significant risk to public health and the environment.

The indictment, delivered on March 24, 1992, charged Gratz with four counts of violating federal law. These included violations of the Resource Conservation and Recovery Act (RCRA) – specifically 42 U.S.C. §6928(d)(1) for illegal transportation of hazardous waste, 42 U.S.C. §6928(d)(5) for illegal transportation without a required manifest, and 42 U.S.C. §6928(a)(2) for the illegal storage of hazardous waste. He was also charged with violating the Clean Water Act (CWA), 33 U.S.C. §1311 and 33 U.S.C. §1319(c)(2)(a), for unlawful discharge without a permit.

A jury found Gratz guilty on all counts following a trial in September 1992. The sentencing, handed down in January 1993, was relatively lenient, with Gratz receiving six months of home detention, a 36-month probation period, and a $10,000 fine. However, the court also ordered him to forfeit $10,000 worth of Lannett stock, valued at $20 per share, effectively stripping him of a portion of his corporate holdings.

Gratz appealed the conviction in January 1994, arguing for a reversal of the jury’s decision. However, the appeals court upheld the original verdict, confirming the validity of the evidence presented by the EPA and the strength of the prosecution’s case. This effectively closes the legal chapter on a case that highlighted the dangers of improper hazardous waste management and the importance of corporate accountability.

Table of Contents

Key Facts

Defendant: Samuel Gratz
Companies Involved: Lannett Pharmaceutical, Inc. & Astrochem Corp.
Hazardous Materials: Phosgene, Sodium Cyanide, ignitable, reactive, and corrosive wastes.
Statutes Violated: 42 U.S.C. §6928(d)(1), 42 U.S.C. §6928(d)(5), 42 U.S.C. §6928(a)(2), 33 U.S.C. §1311, 33 U.S.C. §1319(c)(2)(a)
Penalties: Six months home detention, 36 months probation, $10,000 fine, and $10,000 in Lannett stock forfeiture.
Conviction Date: September 30, 1992
Appeal Denied: January 25, 1994

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Source: EPA ECHO Enforcement Case Database

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