Large Fine And Probation Only Punishment In The M/V THETIS Magic Pipe Case In Norfolk

Marissa Henderson
On December 5, 2013, Norfolk federal judge Mark Davis sentenced the defendants who were found guilty last August for using a “magic pipe” aboard the M/V THETIS. United States v. Diana Shipping Services S.A. et al., No. 2:13-cr-40 (E.D. Va.). As we noted in a previous blog, this is one of two “magic pipe” cases tried before Judge Davis in 2013. Interestingly, the same federal prosecutor, Joseph Kosky, tried both cases as well. Diana Shipping Services, the company that crewed and operated the THETIS, was fined $1.1 million ($100,000 per count) and sentenced to a three and a half year period of probation. Though hefty, this fine was far shy of the $5.5 million in maximum allowable fines. Regardless, it is likely the “whistleblower” crewmembers are celebrating. Under federal laws, they can reap as much as half of the total fines collected.

The chief engineer and second engineer, who are Greek nationals, along with Diana Shipping, were convicted on all counts: conspiracy, knowing failure to maintain an oil record book, and falsification of records and concealing tangible objects in a federal investigation. Chief engineer Ioannis Prokakis (and Diana Shipping) were also convicted of obstruction of justice for ordering crew members to lie to the Coast Guard inspectors who boarded the vessel in Norfolk in September of 2012. The inspectors were tipped off by crewmembers about the existence of a “magic pipe,” that allowed oily waste water to bypass the ship’s oily water separator (for later processing and environmentally sound disposal) and be dumped straight into the sea.

Despite being found guilty of ten and eleven federal felonies, respectively, and the prosecution seeking some 11 to 14 years of incarceration, the chief engineer and second engineer each avoided prison sentences. Judge Davis imposed one year of probation and no fines on each of them, and ordered them repatriated to their native country. One questions whether these environmental prosecutions have any deterrent effect on the crewmembers who have an opportunity to dirty the seas with “magic pipes” when the guilty parties get off without any prison time. As discussed in Mr. Prokakis’ sentencing brief, 39 chief engineers have been sentenced in the federal system since 2006, and the sentences ranged from probation to six months of incarceration.

The chief engineer in the other Norfolk “magic pipe” case, regarding the PAPPADAKIS, will be sentenced at the end of this week, on December 13, 2013. United States v. Kassian Maritime Navigations Agency, Ltd. et al, No. 2:13-cr-70 (E.D. Va.). Considering the light sentences on the engineers in the THETIS case, it seems likely Lambros Katsipis will receive a similar sentence.