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MICHIGAN COMPANY, MANAGERS GUILTY OF RACKETEERING LAW VIOLATION
Release Date: 02/22/2001
FOR RELEASE: THURSDAY, FEBRUARY 22, 2001
MICHIGAN COMPANY, MANAGERS GUILTY
OF RACKETEERING LAW VIOLATION
A cleanup fraud resulted in guilty pleas of violating the Racketeering Influenced and Corrupt Organizations Act (RICO), a maximum 20-year felony offense, and to other environmental crimes. Aaron Smith of Northville, Mich., and Steven Carbeck of Ann Arbor, Mich., pled guilty to violating RICO on Feb.6. In addition, Smith’s company, Hi-Po, Inc., an environmental consulting firm, formerly based in Ypsilanti, pleaded guilty to twice violating the Clean Water Act. Hi-Po admitted intentionally releasing diesel fuel into a storm sewer and a pond in Ann Arbor in order to fraudulently claim the cleanup of illegal releases and to fraudulently receive cleanup payment from the University of Michigan and the Michigan Department of Environmental Quality. Smith, Hi-Po’s owner, and Carbeck, Hi-Po’s Field Operations Manager, admitted that they illegally did profit from Hi-Po’s unlawful activities. Smith’s RICO plea covered the underlying acts of illegal money laundering, mail fraud and bribery of a public official. Carbeck’s RICO plea covered the underlying offense acts of money laundering and mail fraud. Smith agreed to forfeit $500,000 in profits he obtained through his illegal activities. He also faces a maximum of up to 20 years in prison and/or a $250,000 fine when sentenced as a result of his plea. Carbeck faces a maximum penalty of up to 20 years in prison and/or a $250,000 fine when sentenced. Hi-PO faces a maximum fine of up to $50,000 per day of violation. The case was investigated by EPA’s Criminal Investigation Division, the FBI and the University of Michigan Department of Public Safety. The U.S. Attorney’s Office in Detroit is prosecuting the case.