Las Vegas, Nevada - DPL Enterprises Inc. (dba Air Care Indoor Quality Specialists), Richard Papaleo, the company’s president and owner, and Michael Stanovich, a company manager pleaded guilty today in U.S. District Court in Las Vegas to making and selling a misbranded pesticide.
According to charges filed in U.S. District Court in Las Vegas, the defendantsknowingly manufactured and sold fake Sporicidin, an EPA approved a pesticide, intended for use in disinfecting air ducts. The unapproved product was sold with a label that was false because it was not actually Sporicidin, because neither the diluted pesticide nor the label were EPA approved, because the label represented that the pesticide contained the concentration of the active ingredient found in the real product, and because the label contained a trademarked brand-name when it was really a 10:1 dilution. The fake Sporicidin label made by the defendants was copied from a real label and claimed that it could kill various organisms, including the HIV, Avian Flu, Salmonella, Staph and MRSA. However, Papaleo and his company sold diluted Sporicidin containing approximately 10 parts water for every 1 part of Sporicidin.
In court today, the defendants admitted to deliberately selling a misbranded pesticide knowing that the EPA had not approved the diluted product for sale or the label that failed to disclose that the product being was actually a 10:1 dilution.
Papaleo and his company also pleaded guilty to intentionally making false statements to federal agents from the EPA Criminal Investigations Division at the time of a federally authorized search warrant at Air Care. When interviewed, Papaleo told the agents that his company was not diluting Sporicidin and that the pesticide purchased from the maker was being re-packaged and re-labeled by Air Care solely for branding purposes, knowing that these statements were untrue and that diluted Sporicidin pesticide was being sold without approved labels in violation of law.
According to documents filed in court, Papaleo had been warned by the maker of Sporicidin that his company must obtain EPA approval for its label and that misbranding was “illegal.” Air Care admitted to selling approximately 6,312 gallons of the misbranded and diluted pesticide between 2005 and 2010.
The government’s investigation was initiated after EPA received complaints from the maker of Sporicidin. EPA made an undercover purchase of the fake Sporicidin sold by Air Care. EPA’s National Enforcement Investigations Center (NEIC) laboratory in Colorado found it was diluted with water even though the fake label made by Air Care claimed it contained the original strength of the active ingredient.
EPA regulates pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which makes it a crime manufacture a pesticide in the United States without first being registered with the EPA and obtaining from the EPA a manufacturer establishment number. Approved labels must be affixed to any container of the pesticide that is distributed or sold. A pesticide is deemed “misbranded” if among other things the labeling is false or misleading. Misbranding pesticides is a misdemeanor offense.
The maximum penalty for violating FIFRA is one year in prison, and/or a fine of not more than $100,000, or up to twice the gross gain or loss from the crime. The corporation can face up to a $200,000 fine. Papaleo faces up to five years in prison and up to $200,000 in fines or up to twice the gross gain or loss from the crime for making false statements. Air Care could be fined up to $500,000 for making false statements or up to twice the gross gain or loss from the crime.
EPA Criminal Investigation Division conducted the investigation with assistance from the FBI. The case was prosecuted by Senior Trial Attorney Richard A. Udell of the Department of Justice Environmental Crimes Section and Assistant U.S. Attorney Kathryn Newman, of the U.S. Attorney’s Office for the District of Nevada.