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TESTING FIRM INDICTED FOR SCHEME TO GIVE FALSE

WASHINGTON - A federal grand jury in Columbia, S.C., has returned a 15-count indictment against an environmental contractor and its former president, charging that they carried out an illegal scheme that caused hundreds of people to incorrectly believe their underground storage tanks were tested properly for leaks of petroleum and other contaminants.

The indictment returned today charges Carolina Upgrading of South Carolina Inc. and James Edward Adams of Inman, S.C., of with conspiring to commit mail fraud, make false statements and submit false claims, and with committing mail fraud and submitting false claims.

Federal law requires that underground storage tank owners periodically have their equipment tested to ensure the tanks are not leaking pollution into soil or groundwater. The indictment alleges that from March 1994 until October 1999, Adams directed employees of Carolina Upgrading to carry out a scheme to give false tank testing reports to gas stations and several state and federal facilities in South Carolina, North Carolina, Florida, Georgia, Virginia and Tennessee.

In April 2000, Mark Scruggs and Chris Fletcher, former employees of the company, pleaded guilty to federal charges and admitted they were part of a fraudulent testing scheme. Court records show that Scruggs and Fletcher caused storage tank operators to pay at least $400,000 for the fraudulent tests.

"The sanctity of testing and reporting are essential to the protection of our environment, and violations of that sanctity will be aggressively pursued," said Rene' Josey, the United States Attorney in South Carolina.

The case was prosecuted by Daniel W. Dooher, Trial Attorney, Environmental Crimes Section, Department of Justice, and Robert Jendron, Assistant U.S. Attorney, District of South Carolina. The case was investigated by the South Carolina Department of Health and Environmental Control, and the U.S. Environmental Protection Agency.

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