United States v. Pozsgai

No. 88-450-1 (E.D. Pa. January 23, 1992)

In a bench opinion, the court reduces a criminal fine imposed on an individual for unauthorized filling of wetlands in violation of § 404 of the Federal Water Pollution Control Act (FWPCA) from $200,000 to $5,000. The defendant continued filling wetlands despite repeated government warnings that the filling violated the FWPCA and despite a court order directing him to stop filling. However, the court a court order directing him to stop filing. However, the court determines determines that the defendant's ability to pay a fine is limited. His income and earning capacity are marginal, his taxes are in arrears, he has a contingent liability for restoring the wetlands, his real estate is not subject to attachment to pay his individual debts, and his 62 year old wife requires expensive medical care.

[Prior decisions in this litigation are published at 22 ELR 20536 and 20353.]

Counsel for Plaintiff
Christopher Hall, Ass't U.S. Attorney
U.S. Attorney's Office
3310 U.S. Courthouse, 601 Market St., Philadelphia PA 19106
(215) 597-2556

Counsel for Defendant
Paul D. Kamenar
Washington Legal Foundation
1705 N St. NW, Washington DC 20036
(202) 857-0240

Katz, J.:

I will resolve this hearing by a bench opinion while the facts are still fresh in my mind.

There is no doubt that Mr. Pozsgai was a stubborn violator of the Federal laws designed to protect the environment. He may not agree with those laws but when he's told in September of 1987 by the Corps of Engineers that his unauthorized filling was in violation of the Clean Water Act and he's directed to cease and desist, when he ignores that notice and continues to deposit fill, when the EPA notifies him in December of 1987 that his filling without a permit is a violation of the Clean Water Act that could subject him to penal sanctions and after receiving that notice he continues to fill, when the Corps of Engineers issues him a second violation notice on December 17 reiterating the earlier warnings and advising him to stop his unlawful filling and Mr. Pozsgai continues to fill, when in August of 1988 a Judge of this court orders him to stop filling and Mr. Pozsgai continues to fill, then it seems to me that the Government has no alternative but to use the criminal process to make him stop. He has to observe the laws whether he agrees with them or not. This is a Government of laws and if everybody could decide what laws he likes and what laws he didn't and observe only those of which he approved or have his own judgment as to what laws deserve to be obeyed and what laws didn't deserve to be obeyed, then we would not have a Government of laws but simple anarchy.

Now the trial produced incontrovertible evidence from every expert who testified that he was filling Governmentally protected wetlands. Mr. Pozsgai's own expert, Mr. Mellon, testified that the vegetation was obviously wetlands vegetation. Mr. Mellon testified as follows at the trial: "I informed him" — meaning Mr. Pozsgai at that time — "that this was wetlands and he would need a permit to do any fill in with the Corps of Engineers and he should not be filling the area because he probably would not get a permit anyway."

Mr. Pozsgai responded and here's what Mr. Pozsgai's response was to his own expert's advice. He requested Mr. Mellon to give him a letter stating that the fill was 20 to 30 years old. Mr. Mellon testified at the trial according to the transcript that he told Mr. Pozsgai, "While I was telling him that there were wetlands there and that I couldn't tell him, I couldn't testify or state specifically that the fill was more than 20 to 30 years old, his reaction was: Well, that doesn't matter. Just write a letter that says it does".

That is criminal conduct. Now when Ifashioned the sentence in this case, I imposed a $200,000.00 fine and I provided specifically in the judgment of sentence that the fine would be paid on such terms as the Probation Office determined he was able. My contemplation was that the Probation Office would make a determination of his financial circumstances from time to time and that $200,000.00 was an appropriate amount considering the violation, considering that he did own real estate albeit as tenants by the entireties with Mrs. Pozsgai and that the fine would be adjusted by the Probation Department to reflect his ability to pay at a particular point in time.

Now the Government at the time I denied the petition for reduction of the fine and jail sentence did not request a hearing. In the Court of Appeals, the Government conceded that a hearing on the issue of preguideline counts was necessary and that's fine. I'm now obliged to take into account conscientiously and seriously as I do his ability to pay the fine. There's no doubt considering the statutory factors that are applicable that the ability to pay the fine is an appropriate consideration and if the Government's current position is that the Probation Department isn't in a position to make that adjustment, I will do it as best I can. I can't do it really finally because I don't know what his financial circumstances are going to be during the five years of probation. The Department of Probation would be in a better position to make a more accurate assessment but I have to deal with the matter as I find it and as I find it, I find that all of his property is entireties property. I take it that means at the present time the Government could not attach the property and use it to satisfy any portion of the fine. As I suggested earlier in the hearing, I don't know from the bank deposits what his income really is. I know that defense counsel accurately represented that according to the Probation Department's confidential report which was made available to both attorneys under our rules that it says the defendant and his wife reported no income and it goes on to explain a little bit. I don't know how the receipts that are shown on the tax returns compare to the deposits but the point is on the record before me, I'm not able to determine from the bank deposits and the limited information that's been furnished at the hearing that those deposits reflect a greater amount of income than what the Probation Office has reported.

In fairness to Mr. Pozsgai, I must find that his ability to pay the fine is limited. His income, earning capacity and financial resources are marginal based on the submissions that have been filed with the Court. His annual mortgage payments and taxes total $28,000.00. I gather from the information that's furnished to me that the taxes are $12,000.00 in arrears. There was an earlier figure mentioned by counsel in his closing remarks which referred to a $28,000.00 figure but based on the submissions, I believe that is the annual mortgage payment and taxes on the property and not what's in arrears. I don't know what's in arrears beyond the $12,000.00 in taxes although they are clearly in arrears from the submissions to me.

It's true he has paid $5,000.00 for violating this Court's temporary restraining orders. It is true that he's liable for $2,000.00 in mandatory assessments in this case over which I have no discretion. It is true that the figure that he showed on the 1987 financial statement of $81,500.00 was incorrect. That's as much as I can find from the record before me.

There's an outstanding mortgage balance I gather of $89,000.00. So far as the wetlands property is concerned, that value is doubtful indeed. He has a contingent liability for restoring the wetlands and I don't know how much that amounts to. The real estate is all entireties not subject to attachment for the individual debts of Mr. Pozsgai. From the information that I have, the likely income from the defendant's tools, his twin property and the garage is unlikely to exceed his daily living expenses. Also in fairness, it must be stated that the burden that a fine would impose on the defendant and his wife is substantial. Mr. Pozsgai has a 62-year old wife who's ailing, unemployed and requires expensive medical attention and medicine.

I really, evaluating those factors and the statutory guidelines, am left with a difficult decision to make. My concern is that he still hasn't learned his lesson and if he hasn't learned his lesson, he's on five years probation and if he violates the probation, I'm going to send him back to jail and that is probably a sufficient deterrent but only the future can tell whether it will be in this case.

So far as Mr. Pozsgai thinks he's some kind of hero, he's just dead wrong. He's brought disaster on himself and his family. He's no hero. He's a criminal and he's paying the price for it regretfully I must say. He's still in the custody of the Attorney General.

Based on my findings, the fine is reduced to $5,000.00 to run concurrently on all counts and unless there's some objection, I will also make that ruling with regard to the 2255 motion that's pending before me.