Underground tank scam threatened water quality

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GreenGavelA judge sentenced a mid-Michigan man to one day in prison and fined him $20,000 for creating and selling fake insurance certificates to owners and operators of underground storage tanks throughout Michigan.

Allen P. Chadderdon, of Williamston, wrote to U.S. District Judge Janet Neff that he was trying to help desperate underground tank owners before she sentenced him on Dec. 3, according to court documents.

Chadderdon and Dean P. Tucker, of Lansing, pleaded guilty in the U.S. District Court for the Western District of Michigan on Dec. 1 to fabricating certificates that made it appear as though underground storage tanks of gasoline complied with federal and state law, Michigan’s U.S. Attorney Patrick Miles Jr. wrote in a press release.

Tucker faces sentencing in March 2015.

Owners and operators of certain underground storage tanks, typically containing gasoline, must obtain proof of insurance in case they leak. Most obtain a policy to cover $1 million worth of cleanup costs and damages, according to the press release.

The fake document scheme lasted from 2011-2013 and primarily involved gas stations with tanks that are either too old or too damaged to be insured. According to the press release, Chadderdon and Tucker would create a false insurance certificate for the uninsurable tanks so that the gas stations could continue to operate.

If any of the falsely insured tanks were to leak into the surrounding groundwater — a source of drinking water — there was a possibility that there would be no way to clean it up, Miles said. This put residents of more than 30 different Michigan cities at risk.

Undercover Lansing area FBI and EPA agents exposed the scheme by infiltrating the creation and sale of the false insurance certificates, according to the press release. Once the agents disrupted the scheme, they used Chadderdon’s help to identify which gas stations had tanks not in compliance with federal and state law.

Federal agents shut down the gas stations that were unable to present a legal insurance policy until the owner or operator complied with the law.

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