Michigan Water Environment

Association

Environmental Lab Fraud

HOW TO STAY OUT OF JAIL

Det. Daniel Kennedy

Michigan Department of Natural Resources

Law Enforcement Division

Environmental Investigations Section

525 W. Allegan Street, Lansing, Michigan

517-284-6640

3 Types of Environmental Labs

Labs owned / operated by regulated business or entity

Third-party contract laboratories

-Small Independents

-Larger Independents

-Corporations

Government laboratories

-Municipal / state

Role in the Regulatory Scheme

Environmental laboratories are used by industry, businesses, and governmental entities to analyze samples of media (soil, water, air) and manufactured substances to:

-Determine chemical composition and /or properties

-Assess whether such chemicals pose human health risks

-Determine whether such media are contaminated and in need of treatment

-Quantify levels of pollutants within such media for the purposes of regulatory compliance

Role in the Regulatory Scheme

(cont’d)

Regulated industries / government operated plants are

issued permits by state or federal regulatory agencies

containing effluent, discharge or emissions limitations as

well as sampling and testing requirements.

Non-regulated industries, businesses, government

facilities submit samples for testing to determine if they

must apply for a permit or otherwise fall under regulatory

authority.

Results Your Supposed To Count On

Sample is collected (regulated entity, client or third party)

Date, time and location of sample is recorded

Sample is given a unique identifier (to prevent mix up)

Sample is properly transported to the lab

Sample is preserved and protected from alteration

Sample is tested using scientifically valid / accepted methods

A laboratory report is generated that documents test results

Testing process / result undergoes a QA / QC review

The Test Method

Specific established test methods are used to determine the

amount or character of the constituent or property required to be monitored.

Testing method must meet certain scientific and/or regulatory

requirements.

The required testing method often will be prescribed in applicable

regulations.

If numerical value is sought, instrument calibration is part of the

method to establish accuracy of the device.

Scientific Integrity

Labs are to report data that accurately characterizes or quantifies

the species or properties of the sample.

Accurate test results based upon generally accepted scientific

principles / methods.

Quality assurance and quality control procedures in place to verify

proper tests were performed and results are consistent with those

tests.

State Accreditation

Most states have a certification program for labs that tests for safe

drinking water.

Several states have established a certification program for labs

operating within the state that test wastewater, water quality,

hazardous waste, air pollutants, or other environmental samples.

National Accreditation

National Environmental Lab Accreditation

Conference (NELAC)

Voluntary association of state and federal

agencies

Purpose is to establish and promote

performance standards for the operation of

environmental labs

What is Lab Fraud?

Any false material statement,

representation or certification

involving the generation or

reporting of laboratory data and

includes knowing alteration or

omission of any material element

Methods Employed

Procedural fraud

Intentional short cuts or deviations from Standard

Operating Procedures

Sample prep, QA Spiking

Measurement Fraud

Altering or forging direct physical measurements

Improper manual integrations, false visual observation

Indicators of Possible Lab Fraud

Physical appearance (disorganized / disheveled)

Inadequate testing machine(s) / equipment

No (or inadequate) written lab procedures

No (or inadequate) QA / QC program / protocol

No (or insufficient) sampling protocol

Unqualified lab technicians

Reports not generated or provided to client

Lab completes form report that client is required to submit to state

Selective reporting

Poor recordkeeping

Potential Consequences of Lab

Fraud

Contaminated drinking water

Contaminated surface water

Contaminated ground water

Unhealthy air quality

Contaminated soil

Improper disposal of hazardous waste

Underreporting of data about hazardous waste sites that

lead to human exposure

Exposure to asbestos fibers in the air resulting

from demolition / renovation

Inaccurate data to policy makers

Permits for new sources of pollution could be

justified because of false data

Data reported higher than actual may prohibit a

new permitted pollution source

How is Lab Fraud Reported?

Laboratory Employees (whistleblowers)

Regulated Entity (permit holders)

Data reviewers and users (government agencies)

Lab certification program auditors

State / Federal environmental agency field inspectors

Ex-spouse or girlfriend/boyfriend (We get the information

quick because they will be back in love tomorrow)

Why is Lab Fraud Committed?

Economic benefit

Time Constraints

vs. Low risk of detection

Overly burdensome contract requirements

Unqualified personnel

Inadequate technology

State regulations

Low Risk of Detection

States have either no certification program or one that is limited in

scope, with few enforcement mechanisms or resources.

Regulatory focus is on the regulated (i.e., permitted) facility

Legal requirements to sample, test, and keep records is on

permittee

Lack of jurisdiction to perform routine administrative inspections of

independent laboratories

Permittee’s certification of environmental reports is either not required or enforced by regulatory agency

State regulatory agencies allow lab to submit required reports for

permittee

So How Do You Stay Out Of Jail?

1. Do you have integrity?

2. Do you send in reports

that look like this?

Did you notice every entry, every day was the

same except the initials?

The pen used was the same.

The sample fridge, drying oven muffle furnace,

BOD incubator, BACTI incubator, and auto-

clave all contained the same numbers for a

month.

What is Wrong Here?

White out and EZcorrect tape was a hot

commodity for this lab prior to sending

them in to Water Resources Division.

Same as in the chart in the next slide.

But fraud does not have to be so flagrant

to be caught.

WHAT IS WRONG WITH THIS PICTURE?

Additional Ways

Billing for services not completed

Copying previous years test results

because of instrument failure,

forgetfulness, laziness, and lack of time.

Missed hold times

Examples of Lab Fraud Prosecutions“Let’s Hope It’s Not You”

1. A month ago, a former chemist at a now-shuttered state drug lab

in Boston was indicted on 27 counts of obstructing justice, tampering with evidence, perjury and other charges in connection with her

handling of some of the tens of thousands of drug cases she worked

on during her nine years there.

2. After the closure a lab in New York, the Governor ordered the

state’s inspector general to investigate. Her findings, detailed in a

166-page report, cited a litany of failures she described as profound,

including weak leadership, a dysfunctional quality management

system, inconsistently trained and qualified analysts, and outdated

and inconsistent testing procedures.

Federal Case U.S. Tennie VS

Tennie-White December 2017

US v. Tennie-White Southern District – Tennessee

U.S. v. Tennie White--Background

Tennie-White was the sole proprietor of Mississippi

Environmental Analytical Laboratories (MEAL), Inc.,

established in Jackson in 1995

Business was to test environmental samples

submitted by paying clients

White also started Troubleshooters, Inc., an environmental consulting

business, with Robert Wilson in 2004.

To start her lab business, White applied for and received a loan for

$165,000 that was funded by the State.

She also received a private loan for an additional $124,000.

Robert Wilson was hired as Environmental Manager of an auto parts manufacturer located in Water Valley, MS.

Wilson hired Tennie-White to analyze manufacturer’s industrial waste water samples per its indirect discharge (pre-treatment) permit issued by Mississippi Department of Environment Quality.

The manufacturer collected waste water samples monthly and sent them to the contracted lab for analysis.

Prior lab service provider created report of sample test results and sent them back to client manufacturer to help complete DMR’s submitted to MDEQ.

Tennie-White, however, prepared the Discharge Monitoring Reports (DMRs) to be signed by manufacture's environmental manager and submitted to MDEQ.

During interviews with EPA-CID, Tennie-White claimed she sent

client’s waste water samples to 3rd party lab --but she couldn’t remember the name.

Tennie-White blamed former business partner Robert Wilson for

creating the fictitious lab report

6 months later, after further investigation, she later recanted

Search of hard drive Tennie-White used for both businesses revealed

that she created the fictitious document by electronically cutting

and pasting from an authentic report from another lab (CAS).

SHE LIED!!!!

Tennie-White was found guilty by jury of 2 counts

of making false statements (for the DMRs and

lab report) and 1 count of obstructing

proceedings (lying to CID agent)

At the sentencing hearing, Gov’t introduced

evidence of additional uncharged false

statements and fraud)

Tennie-White received 40 months prison

It is up to you whether you want to do the right

thing each and every time

Yes, state regulations and EPA protocol can be

bothersome.

BUT they are in place for a reason

It is for the safety and welfare of yourself, the

citizens in your communities and the State of

Michigan

Questions?

THANK YOU.