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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Criminal Case No. 18-mj-1017-KLM UNITED STATES OF AMERICA, Plaintiff, v. OE CONSTRUCTION CORPORATION,
1.
Defendant.
PLEA AGREEMENT The United States of America (the government), by and through Rebecca Weber, Assistant United States Attorney for the District of Colorado, and the defendant, OE Construction Corporation ("OE Construction" or "OE"), by its authorized representatives, Terri Olson and Chris Olson, and its counsel, Fredric Winocur and Marci Gilligan LaBranche, submit the following Plea Agreement pursuant to D.C.COLO.LCrR 11.1. I. AGREEMENT A.
Defendant's Obligations
The defendant OE Construction agrees to: (1) Plead guilty to Count One of the Information charging a misdemeanor violation of Title 18, United States Code, Section 3, Accessory After the Fact to violating the Clean Air Act (Title 42, United States Code,
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Section 7413(c)(2)(C)). (2) OE further agrees to request, jointly with the government, a sentence of three years' probation with the following conditions: (a) to submit all OE owned vehicles for inspection at OE's expense upon request by the government at any time during the pendency of probation; (b) to repair any OE-owned vehicles that are not in compliance with state and federal regulations and to provide the government with proof of those repairs; and (c) to provide access to any documents and correspondence relating to OE-owned vehicles upon request by the government. (3) OE agrees to pay a fine of $15,000. (4) OE agrees to pay restitution of up to $55,000 for the cost of repair to buyers who purchased modified vehicles from OE. (5) Finally, OE agrees to waive its appeal rights, as detailed below. The defendant understands that the proposed sentence is merely a recommendation and it cannot withdraw from this plea agreement if the Court imposes a different sentence. B.
Government's Obligations
In exchange for the defendant's plea of guilty and waiver of its appellate rights, the government agrees to the following: (1) to recommend the Court give the defendant full credit for acceptance of responsibility per USSG § 3E1.1, unless the defendant engages in conduct that qualifies for the obstruction of justice enhancement under §§ 3C1.1 and 3E1.1, comment (note 4) between the time of its guilty plea and sentencing; and (2) pursuant to Rule 11(c)(1)(B) to request, jointly with the defendant, a
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sentence of three years' probation and the terms specified in Section 1.A of this agreement. C.
Defendant's Waiver ofAppeal
The defendant is aware that 18 U.S.C. § 3742 affords the right to appeal the sentence, including the manner in which that sentence is determined. Understanding this, in exchange for the concessions made by the government in this agreement, and in consideration for not filing additional charges in this case, the defendant knowingly and voluntarily waives the right to appeal any matter in connection with this prosecution, conviction, or sentence unless it meets one of the following criteria: (1) the sentence exceeds the maximum penalty of $200,000; (2) the sentence exceeds the advisory guideline range that applies to a total offense level of 4; or (3) the government appeals the sentence imposed. If any of these three criteria apply, the defendant may appeal on any ground that is properly available in an appeal that follows a guilty plea. The defendant also knowingly and voluntarily waives the right to challenge this prosecution, conviction, or sentence in any collateral attack (including, but not limited to, a motion brought under 28 U.S.C. § 2255). This waiver provision does not prevent the defendant from seeking relief otherwise available in a collateral attack on any of the following grounds: (1) the defendant should receive the benefit of an explicitly retroactive change in the sentencing guidelines or sentencing statute; (2) the defendant was deprived of the effective assistance of counsel; or (3) the defendant was prejudiced by prosecutorial misconduct. 3
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II. ELEMENTS OF THE OFFENSE The parties agree that the elements of the offense to which this plea is being tendered are as follows: Accessory After the Fact (18 U.S.C. § 3) Fir s t: the defendant knew someone else had already committed the crime of knowingly tampering with a monitoring device required to be maintained under the Clean Air Act, in violation of the Clean Air Act (42 U.S.C. § 7413(c)(2)(C)); Second: the defendant then helped that person try to avoid being arrested, prosecuted or punished; Thir d: the defendant did so with the intent to help that person avoid being arrested, prosecuted or punished. See 10th Cir. Pattern J.I. § 2.07. Ill. STATUTORY PENALTIES The maximum statutory penalty for a violation of Title 18 U.S.C. Section 3 (Accessory After the Fact) is not more than one-half the maximum term of imprisonment or not more than one-half the maximum fine prescribed for the punishment of the principal, or both. The maximum statutory penalty for a violation of Title 42 Section 7413(c)(2)(C)) (Clean Air Act) is not more than two years' imprisonment, not more than $500,000, 1 or both. Accordingly, the maximum statutory penalty in this case is not more
1
See 18 U.S.C. § 3571(c)(3). 4
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than one year of imprisonment2 or not more than a fine of $200,000, 3 or both, plus a $125 special assessment fee.4 IV. STIPULATION OF FACTS The parties agree that there is a factual basis for the guilty plea that the defendant will tender pursuant to this plea agreement. That basis is set forth below. Because the Court must, as part of its sentencing methodology, compute the advisory guideline range for the offenses of conviction, consider relevant conduct, and consider the other factors set forth in 18 U.S.C. § 3553, additional facts may be included below that are pertinent to those considerations and computations. To the extent the parties disagree about the facts set forth below, the stipulation of facts identifies those facts that are known to be in dispute at the time of the execution of the plea agreement. This stipulation of facts does not preclude either party from hereafter presenting the Court with additional facts that do not contradict facts to which the parties have stipulated and that are relevant to the Court's guideline computations, to other 18 U.S.C. § 3553 factors, or to the Court's overall sentencing decision. The parties agree that the date on which relevant conduct began is on or about January 1, 2016, and that the relevant conduct continued through on or about January 1, 2017. Pursuant to 18 U.S.C. § 356 1(c)(2), the defendant is subject to not more than five rears' probation. See 18 U.S.C. § 357 1(c)(5). 4 See 18 U.S.C. § 3013(B)(iii). 2
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The parties agree as follows: Between September 2014 and December 2017, OE Construction was a corporate entity doing business within the state of Colorado and throughout the United States. OE operated through its management, which included a President (Chris Olson) and a Chief Executive Officer (Terri Olson). At all times relevant to this agreement, each of these officers was acting under his or her authority and as agents of the corporate entity. In or around and between September 2014 and October 2015, an employee of OE Construction worked with J-Ball Electronics, Inc. ("J-Ball") to knowingly falsify, tamper with, and render inaccurate the monitoring devices required by the Clean Air Act on at least six OE Construction-owned vehicles. J-Ball is a Canadian corporation that manufactures hardware to alter the emission control systems on vehicles and remotely runs software to reprogram the computers on vehicles. The OE Construction employee purchased kits from J-Ball that allowed him to alter emission control systems.
Using these kits, he removed or altered the diesel
oxidation catalyst (DOC), the diesel particulate filter (DPF), the selective catalytic reduction device (SCR), and the exhaust gas recirculation device (EGR). In addition, the OE Construction employee worked with J-Ball to modify the vehicles' on-board diagnostic (OBD) systems to allow the vehicles to operate without the emission control equipment. The OBD system monitors the emissions control system and alerts the driver if any of the emission control devices are malfunctioning. Failure to remedy the 6
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malfunctions can cause the engine to enter into "limp mode," where the vehicle cannot operate above very low speeds. The effect of these modifications was to dramatically increase the release of dangerous pollutants from these vehicles, including particulate matter, NOx (mono-nitrogen oxides), and hydrocarbons. When contacted by the government concerning these Clean Air Act violations, OE Construction admitted that four vehicles had been modified, and assured the government that only the four vehicles had been tampered with and that it had repaired the four vehicles.
However, OE Construction did not reveal that J-Ball and. OE's
employee had modified at least two other vehicles that OE Construction intended to put up for auction and thereby attempted to avoid detection, prosecution, and punishment for additional vehicles that the OE employee had modified. OE Construction did this with the intent that J-Ball and individuals associated with OE avoid being prosecuted or punished. V. ADVISORY GUIDELINE COMPUTATION AND 3553 ADVISEMENT The parties understand that the imposition of a sentence in this matter is governed by 18 U.S.C. § 3553. In determining the particular sentence to be imposed, the Court is required to consider seven factors. One of those factors is the sentencing range computed by the Court under advisory guidelines issued by the United States Sentencing Commission. In order to aid the Court in this regard, the parties set forth below their estimate of the advisory guideline range called for by the United States Sentencing Guidelines. To the extent that the parties disagree about the guideline 7
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computations, the recitation below identifies the matters which are in dispute. A.
The guideline provision applicable to this offense is U.S.S.G. § 2X3.1,
which refers to the offense level for the underlying offense.
The guideline for the
underlying offense, a Clean Air Act violation, is § 201.3. Under § 201.3, the base offense level is 6. Because the offense resulted in an ongoing, continuous, or repetitive emission of a pollutant into the environment, a 6-level increase applies, resulting in an offense level of 12. (§ 201 .3(b)(1)(A)). Under § 2X3.1(a)(1), the base offense level shall be 6 levels lower than for the underlying offense. Accordingly, the base offense level is 6. B.
There are no victim-related, role-in-offense, obstruction and/or multiple
count adjustments that apply. C.
Acceptance of Responsibility:
The parties agree that the defendant
should receive a 2-level adjustment for acceptance of responsibility.
The resulting
offense level therefore would be 4. D.
Fine: Because the defendant is an organization, the provisions of Chapter
8 apply in the determination of a fine. Because environmental offenses are not listed under § 8C2.1, § 8C2.10 applies.
Accordingly, the court should determine the
appropriate fine by applying the provisions of 18 U.S.C. §§ 3553 and 3572 and with reference to §§ 8C2.8 and 8C2.9. If §§ 8C2.4-8C2.8 were to apply, however, the fine would be calculated as follows: The base fine is $8,500. § 8C2.4(a)(1), (d). The culpability score is 5. See 8
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§ 8C2.5 (start with 5, add 1 point under § 8C2.5(b)(3)(B)(5), and subtract 1 point under § 8C2.5(g)(3)). A culpability score of 5 provides a multiplier of 1.00 to 2.00. See § 8C2.6.
Multiplying the base fine by the multiplier provides a fine range of $8,500-
1:
$ 11,000. See§ 8C2.7. The parties recommend a fine of $15,000. Such a fine is appropriate given that the defendant will suffer collateral consequences as a result of this guilty plea. It also takes into account the defendant's willingness to agree to various terms of probation, as outlined in Section 1.A. E.
Restitution: The parties agree that the defendant will pay restitution to the
buyers of vehicles that OE modified. Restitution will constitute the cost to repair the modified vehicles to bring them into compliance with state and federal regulations. This cost is expected to be up to $55,000 based on estimates provided.
OE agrees to
transfer $55,000 to the clerk's office on the date of sentencing for the purpose of paying restitution claims. Any funds remaining after the repairs have been made, or at the conclusion of the term of probation, (whichever comes first), will be returned to OE. The parties understand that although the Court will consider the parties' estimate, the Court must make its own determination of the guideline range. In doing so, the Court is not bound by the position of any party. The parties understand that the Court is free, upon consideration and proper application of all 18 U.S.C. § 3553 factors, to impose that reasonable sentence which it deems appropriate in the exercise of its discretion and that such sentence may be less 9
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than that called for by the advisory guidelines (in length or form), within the advisory guideline range, or above the advisory guideline range, regardless of any computation or position of any party on any 18 U.S.C. § 3553 factor.
VI. ENTIRE AGREEMENT This document states the parties' entire agreement.
There are no other
promises, agreements (or "side agreements"), terms, conditions, understandings, or assurances, express or implied. In entering this agreement, neither the government nor the defendant has relied, or is relying, on any terms, promises, conditions, or assurances not expressly stated in this agreement.
Date: 3/z.o /, 'I
Chris Olson, as President and Duly Authorized Representative of OE Construction, Defendant
Terri Olson, as Chie Executive Officer and Duly Authorized Representative of OE Construction, Defendant �
Date:
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Rebecca Weber, Assistant U.S. Attorney
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Date:
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Linda Kato, Special Assistant U.S. Attorney
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