Environmental company settles fraud claims case
| Wednesday, Mar 17 2010 04:33 PM
Last Updated Wednesday, Mar 17 2010 04:33 PM
A Sacramento court has entered a judgment against a Bakersfield-based company accused of submitting fraudulent reimbursement claims to the State Water Board's Underground Storage Tank Cleanup Fund.
According to a news release from the State Water Board, E2C Remediation Inc., an environmental engineering and consulting firm, submitted inflated invoices while performing investigation and remediation consulting services at gas stations between 2005 and 2008.
E2C officials deny any wrongdoing. They agreed to the court settlement, they said, because they can no longer afford to bear the costs associated with the case.
Water Board investigators alleged that E2C inflated invoices in several categories, including employee time, equipment costs and water disposal. The enforcement action is the first of its kind by the State Water Board, which was represented by the California attorney general's office.
Reed Sato, director of the Water Board's office of enforcement, said in a statement that the case should serve as a message to other claimants and consultants that the Water Board is actively identifying and prosecuting those who commit fraud against the cleanup fund.
Under the terms of the judgment, the Fund will retain approximately $465,000, which was withheld from E2C during the Water Board's investigation, and E2C will pay the Fund $450,000 through withholdings from future reimbursement requests.
In addition, E2C will pay $50,000 in penalties for engaging in unfair business practices.
The civil case comes on the heels of a criminal case against the president of E2C, Philip Goalwin, brought by the attorney general's office in 2007. In that case, Goalwin pleaded no contest to one misdemeanor count of submitting fraudulent claims to the state and paid $9,586 in restitution and was ordered to serve 354 hours of community service.
Goalwin's attorney, Bethany A. Stahley of San Francisco, said in a statement that the Feb. 26 judgment was stipulated, "meaning that it was a 'compromise' of disputed civil claims (not criminal claims) alleged by plaintiffs."
The settlement "was in no way an admission of liability," Stahley said. "Rather, it was a decision made by the parties to conclude the litigation without submitting the claims to a judge or jury."
Stahley also disputed the accuracy of the Water Board's press release, including the dollar figures cited by the board.
The total that E2C is paying to resolve the matter is $537,261, she said, much less than the figures supplied by the Water Board.
"E2C is a family-owned company that works throughout the state of California and it was a strain on its resources, employees, owners and ongoing business interests to continue to defend what E2C believes were meritless claims alleged against it by the Office of Enforcement for the State Water Board," Stahley said.
