White Collar Criminal Defense Group

Indictment Of Environmental Lab Operator A Sign Of DOJ’s Willingness To Treat CWA Violations As Criminal Matters

As industrial waste-water becomes a more significant issue, particularly in those states where hydraulic fracturing for natural gas recovery is prevalant, it is important to understand the potential criminal sanctions for violating the Clean Water Act (CWA).  DOJ’s willingness to proceed with criminal charges in such matters was recently demonstrated with the indictment of Tennie White, owner, operator and manager of Mississippi Environmental Analytical Laboratories, Inc.

According to the indictment, which was filed in the U.S. District Court for the Southern District of Mississippi on November 9, 2012, White had been hired to perform laboratory testing of a manufacturer’s industrial process waste water samples.  Upon completion of the testing, White was to use those results to complete monthly Discharge Monitoring Reports (DMRs) for submission to the Mississippi Department of Environmental Quality (MDEQ).  According to the government, White created three DMRs that falsely represented that laboratory testing had been performed on samples when, in fact, such testing had not been done.  The indictment further alleges that White made false statements to a federal agent during a subsequent criminal investigation.

Wasson Capital, Ltd. President Pleads Guilty, Agrees To $2.3 Million In Restitution And Settles With SEC For Misleading Investors

On November 9, 2012, Anand Sekaran, President and Director of Wasson Capital, Ltd. (“Wasson”) entered a plea of guilty to charges that he engaged in a $2.3 Million fraudulent scheme to defraud Wasson’s investors.  He settled civil charges with the SEC that same day.  In its announcement of the guilty plea, DOJ characterized Mr. Sekaran’s actions as constituting a “classic Ponzi scheme.”  In its news release regarding the civil charges, the SEC asserted that Sekaran concealed trading losses and diverted funds for personal use, including an allegation that he fabricated documents showing illusory profits after his trading strategy became unprofitable in 2008 and produced substantial losses to clients.

According to the government, Sekaran originally formed Wasson in 1997 as an asset management firm that would invest client money primarily in the U.S. options market.  The government claims that as a result of both substantial losses he incurred and several redemption requests, Sekaran then engaged in a scheme to defraud investors, divert investor funds and perpetrate a “Ponzi” scheme through two methods from 2009 through June 2011.  The government explained that first Sekaran misrepresented to existing and potential investors, the firm’s investment value and past performance, the way investor funds were being used and the source of the funds distributed to investors who had requested redemptions.  The government alleged that Sekaran also distributed fraudulent statements to investors in order to forestall redemption requests, induce new investors to contribute to Wasson and induce existing investors to provide additional contributions.

Sekaran entered a plea of guilty to one count of securities fraud and one count of mail fraud, agreeing to $2.3 million in restitution.  As part of his settlement with the SEC, Sekaran also consented to an Order by the SEC, barring him from the securities industry and from penny-stock investing.