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Date: 08-01-2023

Case Style:

United States of America v. Sinister Mfg. Company, Inc.

Case Number: 2:23-cr-00168

Judge: John A. Mendez

Court: United States District Court for the Eastern District of California (Sacramento County)

Plaintiff's Attorney: United States Attorney’s Office in Sacramento

Defendant's Attorney: Brian J. Stretch

Description: Sacramento, California criminal defense lawyer represented Defendant charged with manufacturing and selling devices designed to defeat vehicle emissions controls.

Sinister Diesel pleaded guilty to a two-count Information, charging it with conspiracy to violate the Clean Air Act (CAA) and defraud the United States, and with violating the CAA by tampering with the monitoring device of an emissions control system of a diesel truck. Under the plea agreement, the defendant agrees to pay a $500,000 criminal fine.

Sinister must pay an additional $500,000 under the civil consent decree which the United States filed simultaneously with its civil complaint against Sinister, alleging violations of the CAA’s prohibition against the sale or manufacture of devices that bypass, defeat or render inoperative emissions controls. The civil consent decree prohibits the company from making, selling or offering to sell defeat products, including delete tuners, and prevents Sinister Diesel from transferring intellectual property that would allow others to make such products. To ensure compliance with these requirements, Sinister Diesel will implement a robust internal training program and notify its distributors and former customers about the settlement.

“Businesses that manufacture and sell illegal devices to defeat a vehicle’s emissions controls foster pollution and risk decades of progress in curtailing harmful emissions from motor vehicles in this country,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The plea agreement and civil settlement show that we will take strong action to enforce the Clean Air Act and ensure that emissions control requirements for cars and trucks are being followed.”

“Sinister Diesel sold products that allowed drivers to strip the emissions controls from their trucks, causing a dramatic increase in the release of pollutants that worsen air quality and harm the quality of life,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “Environmental laws that control diesel pollution are especially important to protect sensitive populations such as the young, the elderly and people who suffer from respiratory conditions.   My Office will continue to vigorously prosecute those who place profit above the public’s health and the environment.”

“For close to ten years, Sinister Diesel sold parts designed to override or disable the emissions control systems on trucks,” said Principal Deputy Assistant Administrator Larry Starfield for the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance. “EPA testing has shown that a vehicle altered with these parts can emit more than 100 times the amount of certain harmful air pollutants, compared to a vehicle with an intact emissions control system. This case shows that we will aggressively prosecute those who manufacture and sell devices designed to defeat vehicle emissions controls.”

According to court documents, Sinister Diesel – from its 2010 incorporation to April 2020 – manufactured and sold parts intended to be installed on motor vehicles, particularly diesel trucks, to enable “deleting” the trucks by removing or disabling the trucks’ emissions control systems. Various products, referred to as “delete devices” or “defeat devices,” are used in the process of “deleting” a vehicle. Sinister often sold its products as part of “delete kits,” sometimes bundled with “delete tunes.” The delete tunes were software produced by another company which could alter a diesel truck’s on-board computer to allow a truck with its emissions controls “deleted” to appear to run normally.

Through its employees, Sinister Diesel reached agreements with other companies that manufactured tuners or tuning platforms to sell their products bundled together. Sinister would often advise customers on other needed parts for their deleted vehicles to run properly with Sinister’s delete kits — such as a tuner or tuning platform and delete tunes — and sell them those products, too. Sinister also counseled customers on how to evade state emissions tests.

Though Sinister sometimes labeled its delete products for “racing” and included disclaimers in marketing materials indicating that its products should be used only in off-road settings, the company knew most of its delete products were purchased by diesel truck drivers who used those products on public roads, not racetracks. At times, approximately 25% of Sinister’s gross revenue stemmed from its delete products. According to Sinister’s sales statistics, between October 30, 2015, and July 17, 2017, it sold 39,792 defeat devices, including at least 35,960 kits that disable vehicles’ exhaust gas recirculation systems.

Deleting a diesel truck causes its emissions to increase dramatically. For example, for a fully deleted truck with all emissions equipment removed, EPA testing has quantified the increased emissions as follows: Nitrogen oxides increased 310 times, non-methane hydrocarbons increased 1,400 times, carbon monoxide increased 120 times and particulate matter increased 40 times. EPA’s Air Enforcement Division released a report in November 2020 finding that more than 500,000 diesel pickup trucks in the United States – approximately 15% of U.S. diesel trucks that were originally certified with emissions controls – have been illegally deleted.

Diesel emissions contain multiple hazardous compounds and harm human health and the environment. Diesel emissions have been found to cause and worsen respiratory ailments such as asthma and lung cancer. One study found that 21,000 American deaths annually are attributable to diesel particulate matter. Additionally, exposure to polluted air in utero has been associated with a host of problems with lifelong ramifications including low birth weight, preterm birth, autism, asthma and brain and memory disorders.

The defendant is scheduled to be sentenced in the criminal case by U.S. District Court Judge John A. Mendez for the Eastern District of California on November 14, 2023. Though Sinister Diesel agreed to pay a $500,000 criminal fine under its plea agreement, the company faces – for each count – a maximum fine of $500,000 or twice the gross pecuniary gain derived from the offense. Its sentence will be determined at the discretion of the court after consideration of all applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The criminal case was the product of an investigation by the EPA’s Criminal Investigation Division, with assistance from the Federal Bureau of Investigation’s Sacramento Field Office. Assistant United States Attorney Katherine T. Lydon of the Eastern District of California and Senior Counsel Krishna S. Dighe and Trial Attorney Stephen J. Foster of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division (ENRD) are prosecuting the criminal case. The federal civil case is being handled by Senior Attorney Eric Albert and Senior Counsel Joanna Day of the Environmental Enforcement Section of ENRD, Attorney Advisor David H. Kim of EPA’s Region 9 office, and Janice Chan of the EPA’s Region 9 office.

Outcome: 08/01/2023 10 PLEA AGREEMENT as to Sinister Mfg. Company, Inc.. Attorney Lydon, Katherine Theresa added. (Lydon, Katherine) (Entered: 08/01/2023)
08/01/2023 11 NOTICE of RELATED CASE(S) 2:23-cv-01580-JDP by USA.. (Attachments: # 1 Proposed Order)(Lydon, Katherine) (Entered: 08/01/2023)
08/01/2023 12 MINUTES (Text Only) for CHANGE OF PLEA HEARING as to Sinister Mfg. Company, Inc. before Senior District Judge John A. Mendez held on 08/01/2023. Brian George, out of custody, appeared in person, as the Chief Executive Officer and authorized representative for Sinister Mfg. Company, Inc. ("The Company"). Government Counsel, Katherine Lydon and Krishna Dighe, both present. Defense Counsel, Brian Stretch, present. Brian George, representative for Sinister Mfg. was placed under oath.Mr. George ENTERED GUILTY PLEAS on behalf of the corporation as to Counts 1 and 2 of the 1 Information. The Court ADJUDGED The Company guilty and REFERRED the matter to U.S. Probation for the preparation of a Presentence Report. Judgment and Sentencing SET for 11/14/2023, at 9:00 AM, in person, in Courtroom 6 (JAM), before Senior District Judge John A. Mendez. Custody Status: Out of custody. Court Reporter: Maryann Valenoti. (York, M) (Entered: 08/01/2023)
08/01/2023 13 SCHEDULE of DISCLOSURE for PSR as to Sinister Mfg. Company, Inc. Plea Date: *08/01/2023* Sentencing Date: *11/14/2023* Reply Date: *11/07/2023*** Correction Date: *10/31/2023* Report Date: *10/24/2023* Objection Date: *10/17/2023* Proposed Date: *10/03/2023* Copies: *AUSA - Defense Counsel - USPO* (York, M) (Entered: 08/01/2023)

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