Overseas Shipholding Group, Inc. Sentenced To Pay an Additional $3 Million for MARPOL Violations

On November 24, 2008, Overseas Shipholding Group Inc. (OSG) pleaded guilty and was sentenced by the U.S. District Court for the Eastern District of Texas to pay an additional $3 million penalty in connection with the failure of OSG crewmembers to maintain an accurate Oil Record Book on oil tanker Pacific Ruby from December 2004 through March 2005. OSG pled guilty last June to 33 felony counts in multiple districts in connection with unlawful discharges and false record books on 12 oil tankers calling at various U.S. ports. The settlement agreement called for OSG to pay a total fine of $37 million, including $10 million to the Eastern District of Texas. However, as a result of the dismissal of certain charges by the East Texas District Court, $3 million of the penalty was put into escrow pending the outcome of the Government's appeal. The Fifth Circuit Court of Appeals reversed the dismissal in June 2008, leading to sentencing on the reinstated charges on November 24. A portion of the new penalty will be used as community service payment to the National Park Foundation and National Fish and Wildlife Foundation. The June 2007 sentencing also included three years probation and the implementation of a strict environmental compliance program.