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‘Unlucky’ Coatings Exec Indicted

Friday, March 7, 2014

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A marine coatings maker who survived a shark attack last year has now been bitten by a federal indictment charging him with making and selling thousands of gallons of toxic boat paint he had agreed to stop producing.

An 11-count grand jury indictment charges Clearwater, FL-based New Nautical Coatings Inc. Sea Hawk Refinish Line and four executives with scheming to unlawfully sell an unregistered pesticide and obstruct justice. The defendants are CEO Erik Norrie; president David Norrie; vice president Jason Revie; and national sales manager Tommy Craft.

According to court documents, the defendants netted at least $2 million between 2004 and 2009 by selling coatings containing tributyltin methacrylate (TBT), despite canceling the paint's pesticide registration with the U.S. Environmental Protection Agency in 2005. 

Erik Norrie made international headlines in 2013 as the "world's unluckiest man" after a shark bit a large chunk out of his left leg during a fishing trip in the Bahamas. He's reportedly also survived a lightning strike, a rattlesnake bite, and two monkey attacks.

Erik Norrie
Photos: Seahawkpaints.com

Erik Norrie, CEO of New Nautical Coatings Inc. and Sea Hawk Refinish Line, is charged with scheming to sell unregistered TBT-based paints. In 2013, he survived a shark attack in the Bahamas.

The sealed indictment, filed in U.S. District Court in the Southern District of Florida, was returned on Feb. 6 and later unsealed. 

David Norrie, Revie and Craft appeared in court Feb. 11 before U.S. Magistrate Judge Anthony Porcelli in Tampa. Erik Norrie was also scheduled to appear last month. 

Aggressive Antifoulant

The corporate defendants are New Nautical Coatings Inc., dba Sea Hawk Paints, and Sea Hawk Refinish Line Inc., dba Refinish Line Auto Supplies

New Nautical manufactured and sold Sea Hawk Biocop Antifouling Coating, a multi-season, anti-fouling bottom paint with TBT designed for "areas of aggressive marine growth."

TBT, once a popular choice for anti-fouling coatings, has been found to have significant harmful effects on marine life, including imposex in snails. Its use has been largely banned around the world, particularly since 2008, when the International Maritime Organization's International Convention on the Control of Harmful Anti-fouling Systems on Ships took effect.

Biocop was registered as a pesticide in December 1987 until Feb. 16, 2005. At that point, the EPA accepted New Nautical's irrevocable request for voluntary cancellation of Biocop's registration.

New Nautical started negotiating the cancellation in September 2004, according to court documents. The cancellation allowed the company to continue to sell Biocop made before Dec. 1, 2005, and shipped before Dec. 31, 2005.

But the company was prohibited from manufacturing Biocop for domestic sales after Dec. 1, 2005, and selling the coating to anyone in the U.S. after Dec. 31, 2005.

Buying Up TBT

While negotiating the cancellation, Erik Norrie led the EPA to believe that the company's goal was to eliminate TBT-based anti-fouling paints "as soon as [its] raw materials [were] depleted," court documents state.

Instead, the Norries, Revie and Craft allegedly planned to exploit New Nautical as the industry's only manufacturer of TBT-based anti-foulants.

New Nautical Coatings

New Nautical manufactured Sea Hawk Biocop Antifouling Coating, which contained TBT and was described as a multi-season, anti-fouling bottom paint for "areas of aggressive marine growth."

They did so by continuing to buy raw materials from private and commercial interstate carriers to produce Biocop for years after the 2005 deadline, and then concealing the production and sale from regulators, documents said. The vendors included foreign chemical makers.

In addition, the Norries and Revie allegedly conceived a plan to produce and sell Biocop after the cancellation date by fraudulently marking it to appear as if they had sold significant amounts ("hypothetical allocations") to distributors before the Dec. 31, 2005 cut-off.

In fact, the coatings marked as sold had not even been manufactured, court documents say. 

Fake Sales Invoices

One company that reportedly received "hypothetical allocations" was Refinish Line. Court documents say the Norries and Revie made it appear as if New Nautical had sold thousands of gallons of Biocop to Refinish Line, creating the appearance that Refinish Line was a distributor. 

The three even created false purchase orders for various customers supposedly buying Biocop from Refinish Line. They then sent the fake invoices to marine supply distributors, boatyards, shipyards and marinas. 

All four defendants allegedly told their customers and primary distributor that it was legal for them to sell Biocop after Dec. 31, 2005.

To pull this off, they manipulated the batch numbers on cans of the coatings, court documents allege.

Refinish Line

The defendants allegedly used Refinish Line to send invoices for the TBT-based coatings they sold after December 2005.

On Jan. 1, 2006, the Norries allegedly had a New Nautical employee write to the company's customers that they could continue to purchase Biocop from New Nautical, but would receive the invoice from Refinish Line.

When the Florida Department of Agriculture showed up on behalf of the EPA to inspect New Nautical's facilities in July 2006, David Norrie told the inspector that Biocop production had been discontinued and existing stock  sold. He then showed the inspector the fake invoices to Refinish Line and its primary distributor. 

The Charges

Each defendant is charged with one count of conspiracy to (1) impede, impair, obstruct and defeat the lawful functions of the EPA; (2) sell an unregistered pesticide; (3) violate an EPA cancellation order; and (4) obstruct justice, and a separate conspiracy to commit mail and wire fraud.

New Nautical, Refinish Line, David and Norrie and Revie are also charged with one count of wire fraud and one count of misuse of a government seal. 

New Nautical and David Norrie are also charged with one count of obstruction of justice; the company and Erik Norrie are charged with two other counts of obstructing justice. 

New Nautical Coatings and the four defendants are also charged with four counts of the sale of an unregistered pesticide. 

If convicted, the corporate defendants face a fine of up to $500,000 for each felony conviction, and fines of up to $200,000 for each misdemeanor.

The individual defendants, if convicted, face up to five years in prison for each count of conspiracy to defraud the government; up to 20 years in prison for each count of conspiracy to commit mail and wire fraud, wire fraud and obstruction of justice; up to five years in prison for each count of the misuse of a government seal; and up to one year in prison for each count of the sale of an unregistered pesticide.

   

Tagged categories: EPA; Ethics; Government; Laws and litigation; Marine Coatings; Shipyards

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