In hot water

Eco-cleanup company sued by state water board over allegations of fraud

William Bono is co-owner of Hanover Environmental Services Inc., an environmental cleanup company recently accused of fraud by the state water board. Bono believes his company will be exonerated of all charges.

William Bono is co-owner of Hanover Environmental Services Inc., an environmental cleanup company recently accused of fraud by the state water board. Bono believes his company will be exonerated of all charges.

FILE PHOTO by Vic cantu

A Chico-based environmental cleanup company is in deep with the State Water Resources Control Board.

Late last month, the State Attorney General’s Office, acting on behalf of the water board, filed a civil complaint against Hanover Environmental Services Inc., a local corporation that specializes in the cleanup of underground gas storage tanks and groundwater assessment.

The allegations include intentionally misrepresenting the cost of work billed to the water board’s Underground Storage Tank Cleanup Fund to pad profits and providing geological services without proper licensing, among other charges. The water board is seeking repayment and an injunction against Hanover until it is licensed to practice geology in California.

Hanover has been in business since 1990, providing cleanup services at more than 50 contaminated sites across the North State, and is owned by married couple William and Carrie Bono.

During a recent phone interview, William said the charges are baseless. “As they went through the investigation, we had clear explanations for everything they questioned,” he said.

Meanwhile, Cris Carrigan, director of the state water board’s Office of Enforcement, is equally confident that the case against Hanover is strong. “We don’t take our decisions as law enforcement lightly,” he said. “We feel we can prove what it says in the complaint—and will probably end up establishing more violations than are alleged in the complaint—by the end of the day.”

Carrigan declined to disclose exactly how much his office is seeking in damages, but confirmed the total is “in the millions of dollars.”

The cleanup fund reimburses property owners for up to $1.5 million for cleanup of petroleum releases from underground storage tank facilities. The program is financed by a 1.4 cent-per-gallon gasoline storage fee and has doled out $3.4 billion to 7,500 sites since its inception in 1989.

Over the years, the cleanup fund has frequently been the target of defrauders, Carrigan said. As such, the water board launched the Fraud, Waste and Abuse Prevention Unit in 2010.

The Hanover case was brought to the water board’s attention by regional water board staff, Carrigan said. The fraud unit subsequently launched an investigation, detailing its findings in an 18-page complaint dated May 29 and signed by State Attorney General Kamala D. Harris.

“Substandard work is a pattern and practice … that is pervasive throughout the sites on which [Hanover has] worked,” the complaint reads, citing work done in 2010 for Oroville-based Vanella Oil Inc., as an example. On the Vanella site, the complaint maintains, wells were not properly abandoned and the site had to be revisited. The water board said it would be unreasonable for Hanover to be reimbursed for the additional work.

Further, the complaint listed multiple instances in which Hanover “invoiced the cleanup fund and received reimbursements for work that was not justified by the environmental benefit it provided.” The complaint also claims Hanover has a pattern of “providing field notes and chain of custody documentation that is incomplete, misleading, inconsistent, falsified, or forged.”

Carrigan said that some of the paperwork discrepancies “can be characterized as negligence, but there’s also intentional misconduct here.”

On top of such allegations, the water board maintains that Hanover’s officers have never held professional geologist licenses. “It’s very objective—we looked at the state licensing board list, and they’re not on it,” he said. “You can also find out if a party has been licensed and hasn’t kept it current, but these parties have never been licensed. This is not a case of [a license] expiring.”

Proper licensing is important because substandard geological work can cause great environmental harm, Carrigan explained.

“If a pool from a leaky tank is not properly contained because the hydrogeology of the site is not well understood,” he said, “that can end up causing contamination in groundwater, or surface water if it’s in the proximity of a stream or creek bed.”

Meanwhile, William Bono said he believes his company will be exonerated of all charges. He explained that Hanover has never directly received money through the cleanup fund, fraudulently or otherwise.

“The fund has never paid me a dime,” he said. “It pays my clients, and they pay me. They’re alleging that we over-billed them and did unnecessary work, but all the work we did was directed by the state water board. They’re very specific about the work they want done and how they want it done. Now, they’re alleging we defrauded them, and I don’t understand how they can say that.

“We’re very confident that our accounting is absolutely accurate.”

As for the licensing issue, Bono said that a “professional geologist has been senior vice president of this corporation since at least 2004.”

The state water board is currently waiting for Hanover to officially respond to the allegations, Carrigan said. From that point, the two parties may meet for settlement discussions.