Shell Oil Company has been ordered to pay $4 million to settle False Claim Act allegations that it requested double reimbursements for a hazardous waste cleanup in Massachusetts. The company sought payment from the Massachusetts tank cleanup fund as well as from private insurers, Law360 reports.
Shell and Motiva Enterprises LLC requested reimbursements from Massachusetts’ Underground Storage Tank Petroleum Product Cleanup Fund program for more than 100 gas stations throughout the state. The companies did not reveal to state authorities that it also requested and received reimbursements from insurers, according to the state Attorney General Martha Coakley.
The scheme of major oil companies profiting from oil spill cleanups recently came to light after it was reported that a former Environmental Protection Agency (EPA) engineer and an environmental and civil rights attorney partnered with a team of lawyers, investigators, and experts to conduct an ongoing investigation into the “double-dipping” practice.
Thomas Schruben, a Maryland environmental engineer and former EPA employee who specializes in storage tanks had long suspected companies of profiting off of oil spill cleanups. Along with attorney Dennis Pantazis and their team, Schruben has brought 20 such cases to state governments, demonstrating how oil companies defraud states in order to make a profit from underground storage tank spills.
“State governments set aside tank cleanup funds to cover the costs of replacing old tanks and extracting polluted soil and dirty groundwater, not so that multibillion-dollar oil companies can profit by double-dipping,” said Christopher Paulos an attorney with the Levin, Papantonio law firm who practices in the areas of qui tam or whistleblower and False Claims Act litigation. “Shell oil and other companies have essentially defrauded state governments by collecting both state special funds and insurance money for the same cleanup efforts.”
In 1993, Shell sued insurers seeking coverage for remediating environmental damage caused by leaking underground storage tanks at its gas stations across the state of Massachusetts, according to Law360. The company settled with insurers but did not disclose the settlement to the Massachusetts’ underground storage tank fund program until February 2012.
Other major oil companies including BP, Chevron, and ExxonMobil have used the scheme to defraud states and make a profit. Recently, BP was sued by the state of Minnesota for double-dipping. The state alleged that BP violated the Minnesota False Claims Act by collecting more than $25 million from the state tank fund as well as being reimbursed by insurers.