Justice Department Charges Japanese Contractors in Navy Wastewater Dumping Scheme

Three Japanese contractors were indicted by a federal grand jury Tuesday on charges they defrauded the Navy in a 13-year scheme to illegally dump untreated ship wastewater they were hired to decontaminate, according to the U.S. Justice Department.

Sojiro Imahashi, president and CEO of the Yokohama, Japan-based Kanto Kosan Co., and two employees, Tsuyoshi Ifuku and Yuki Yamamiya, were charged Tuesday in Washington, D.C., district court with one count of conspiracy to make false claims and commit ocean dumping and major fraud against the United States; four counts of major fraud against the U.S.; and six counts of submitting false claims, according to a Justice Department statement Thursday.

From 2007-2020, Kanto Kosan received about $120 million in Navy contracts, “tens of millions of which related to the removal, treatment, and disposal of contaminated oily wastewater generated by U.S. Navy ships” at bases in Yokosuka, Sasebo and Okinawa, according to the statement.

But instead of treating the wastewater according to Japanese environmental standards, the company allegedly dumped it into the ocean, according to the statement.

The indictment alleges Kanto Kosan would “minimally treat” the oily wastewater to remove visible contaminants and then discharge the water into the ocean, according to the Justice Department.

The wastewater was contaminated with oil, firefighting foam, chemicals and other contaminants associated with ship operations, according to the indictment.

Not only could releasing untreated water cause environmental issues such as pollution, but “the appearance of U.S. Navy ships dumping wastewater into Japanese waters would have undermined the U.S.-Japan strategic relationship,” according to the indictment.

The Navy in March 2018 started an investigation of Kanto Kosan that was later joined by the Justice Department and FBI, according to The Japan Times and Wall Street Journal in 2019. Three former company employees said Kanto Kosan failed to treat the wastewater as contracted and falsified records and test samples, the reports said.

The company at the time dismissed the allegations as groundless, according to The Japan Times.

Kanto Kosan is also accused of deceiving the Navy into believing the company was properly treating the wastewater, according to the statement.

The indictment also alleges the defendants directed environmental testing personnel to sample water from tanks filled with tap water rather than wastewater during semiannual tests, according to the statement.

“Kanto Kosan employees also added [wastewater] to the tanks filled with tap water on occasion to avoid exposing the scheme,” the Justice Department said in the statement.

If convicted, the defendants will be required to pay back the government for funds fraudulently taken in addition to any other punishments, according to the indictment.

Court dates had not yet been set as of Friday, according to court records.

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