Shipping Company Whistleblower Awarded Nearly $500,000

In a continuation of a story we wrote about in February, the Baltimore Sun reported Wednesday that a Baltimore U.S. District Court Judge has awarded a whistleblower $462,500 in return for a tip that enabled the U.S. Coast Guard to catch and fine two high-volume polluters.  The companies, Efploia Shipping and Aquarosa Shipping, pled guilty in January to violations of the Act to Prevent Pollution from Ships (“APPS”), and were collectively fined roughly $2.4 million.

The government learned of the violations when, in February 2011, an engineer complained to the U.S. Coast Guard that the companies were deliberately discharging waste oil and plastic garbage in violation of APPS.  Court papers indicated that senior ship engineers started dumping oil contaminated bilge waste on the ship’s very first voyage in June 2010 in China. One method involved a so-called “magic pipe” consisting of a long rubber hose and metal flanges welded together onboard to bypass required pollution prevention equipment.

Prosecutors and the Coast Guard said they would not have been able to make the case without the whistleblower, Salvador Lopez, who showed them where to find the “magic pipe” deep in the engine room.  Under the APPS, whistleblowers are entitled to up to half of the criminal fines imposed on the two companies – and Lopez may end up receiving something close to that.  The $462,500 he received came as part of a plea agreement with Aquarosa Shipping.  Efploia, however, has challenged the payment of funds to Lopez, arguing that Lopez should have told company officials so they could fix the problem rather than waiting to tell the Coast Guard.  If the judge rejects Efploia’s argument, Lopez will be entitled to another $462,500.

Lopez, the Sun reported, had been supporting his wife and four children on a salary of $27,000 a year.  Since blowing the whistle on his employer, he had lost even that modest salary.  The judge has ordered Aquarosa to pay Lopez the first $462,500 on May 25, 2012.