Cleveland Man Pleads Guilty to Violating Clean Air Act, Defrauding Company of $1.2 Million
A Cleveland man pleaded guilty in federal court to fraud, money laundering and violating the Clean Air Act by failing to remove asbestos prior to demolishing a former factory in Cleveland, law enforcement officials said.
Christopher Gattarello, 51, admitted to defrauding a Louisiana company out of nearly $1.2 million. He is scheduled to be sentenced June 19.
“Our neighborhoods are not garbage dumps,” said Steven Dettelbach, U.S. Attorney for the Northern District of Ohio. “Mr. Gattarello’s actions show his total disdain for the law and for the people who live near the factory. He will be held accountable for his actions.”
“This defendant had total disregard for the environment and cared only about his own illicit financial gain,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.
“Exposure to asbestos endangers human health and can prove fatal,” said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Ohio. “As a result of the defendant’s actions, debris containing asbestos fibers piled up outside and was exposed to the elements, threatening dozens of nearby businesses and homes. Today’s guilty plea demonstrates that EPA and its partner agencies are prepared to prosecute those who ‘cut corners’ by avoiding the costs of handling asbestos safely and legally.”
“This was one of the most egregious examples of open dumping of solid waste ever seen in the state of Ohio; these actions will not be tolerated,” said Ohio EPA Director Craig W. Butler. “I would like to commend all those involved in this case from the Northeast Ohio Environmental Crimes Task Force which includes Ohio EPA’s Special Investigations Unit, along with the invaluable efforts of local, state and federal criminal investigatory and prosecutorial agencies.”
“IRS-Criminal Investigation is committed to unravelling complex financial schemes and following the money to ensure those who profit from crime are held accountable,” said Kathy Enstrom, Special Agent in Charge, Internal Revenue Service—Criminal Investigations.
According to court documents:
Gattarello owned and controlled several municipal garbage-hauling businesses in greater Cleveland, including Reach Out Disposal, All Points Rubbish Disposal and Axelrod Rubbish Recycling. In June 2011, Gattarello, on behalf of All Points, leased the former National Acme facility at 170 East 131st Street in Cleveland. The 570,000 square-foot facility was built in 1917 and was used for manufacturing for nearly a century. It is located near many homes and a school. Gattarello represented to the lessor that paper and cardboard waste would be recycled at the facility.
In July 2011, a company estimated removing asbestos from the facility would cost $1.5 million.
Around August 2011, Gattarello directed paper and cardboard waste, as well as municipal garbage, be delivered to the facility for recycling. Over the next several months, more garbage, paper and cardboard were delivered than could be handled, and Gattarello had the waste moved inside. By April 2012, most of the facility was filled with garbage.
In May 2012, Gattarello, on behalf of Reach Out, entered into a contract to purchase the facility. Gattarello intended to demolish the facility and sell any metal removed as scrap.
In July 2012, company officials submitted a notice of demolition with the Cleveland Division of Air Quality stating there was no asbestos in the National Acme facility. About 10 days later, the CDAQ rejected the notice because it was incomplete and stated demolition “may not begin” until a proper notice was submitted and approved. About 10 days after that, on July 21, 2012, Gattarello directed the demolition to begin.
Asbestos fibers were released into the environment during demolition. Debris accumulated outside the facility from demolition and asbestos in the piles were exposed to the wind and elements.
Additionally, Gattarello pleaded guilty to one count each of conspiracy to commit wire fraud and money laundering.
AIM Business Capital LLC is a financial company based in Louisiana that specializes in “factoring”—a practice in which AIM purchases accounts receivable, such as invoices billed to customers for goods and services. Businesses that factored their receivables with AIM received immediate cash. AIM, like other factoring companies, purchase the receivables at a percentage discount of the invoice. AIM made a profit by collecting the full amount of the invoice from the business’s customers, according to court documents.
In 2011 and 2012, Robert Shaw, on behalf of Reach Out and Axelrod, entered into contracts with AIM for the purchase of receivables from Reach Out and Axelrod. Gattarello directed the creation of false and fraudulent invoices for the companies and directed that they be submitted to AIM. In some cases, Gattarello and Shaw directed other employees to create false letters attesting to the validity of the invoices, which Shaw forwarded to AIM. The loss to AIM was nearly $1.2 million, according to court documents.
Shaw’s case is pending.
The case is being prosecuted by Assistant United States Attorneys Brad Beeson and James V. Moroney following an investigation by the FBI, U.S. and Ohio Environmental Protection Agencies, the Ohio Bureau of Criminal Investigation and the Internal Revenue Service.