FOR IMMEDIATE RELEASE
Thursday, January 29, 1998
Contact: Jeff Nelligan
Telephone: (202) 366-6312
OIG 1-98
NEW MEXICO FIRM ENTERS GUILTY PLEA
IN COMPRESSED-GAS SAFETY TESTING CASE
In the first prosecution of its kind, a Roswell, N.M., company pleaded guilty to certifying compressed gas cylinders as safety-tested when they were not, the U.S. Department of Transportation’s Office of Inspector General (OIG) announced today.
The plea was entered on Jan. 15 in U.S. District Court in Albuquerque, N.M., by American Oxygen Co., Inc., with its owner Chester Smith and its manager, Keith Smith. They were charged with 19 counts of violating the federal Hazardous Materials Transportation law.
The case was investigated by the department’s Inspector General and the Federal Bureau of Investigation, with assistance from the department’s Research and Special Programs Administration.
"Many Americans use compressed gases at work or even at home -- for example, people on oxygen for health reasons. And all of us sometimes share the highways with trucks carrying cylinders of compressed gases," said Todd J. Zinser, assistant Inspector General for investigations. "The Hazardous Materials Transportation law was passed to ensure that the tanks will provide safe conveyance and storage."
In 1987, American Oxygen Co. was certified by the Transportation Department to test cylinders used to hold and transport such compressed gases as oxygen, hydrogen, helium and argon. Under federal law, the cylinders must be tested at least every five years to ensure they remain strong enough to contain pressurized gases, many of which can be explosive under pressure. Cylinder failure could cause death or serious injury.
The federally required testing procedure is to include a "hydrostatic" test, in which cylinders are subjected to extreme pressure to detect fatigue, which is not apparent in a visual check.
According to the indictment, American Oxygen Co.’s certification expired, with no attempt made to renew it. It was alleged that employees of the firm were instructed by the owner and manager to stamp cylinders as having been hydrostatically tested, when that had not occurred, from at least 1991 on.
The company also charged its customers for the falsely stamped cylinders, including area fire departments, hospitals and rehabilitation centers.
Sentencing is set for March 31, 1998, in Albuquerque. Chester Smith and Keith Smith each face up to five years’ imprisonment and a $250,000 fine for each count of the indictment. The company could be fined $500,000 for each count.
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