Las Vegas company pleads guilty to lying to the EPA
A leading air duct cleaning equipment supplier, its owner and its top engineer pleaded guilty in federal court this week in a scam to dilute and deceptively market a brand name pesticide.
The operators of DPL Enterprises Inc., which has been doing business in Las Vegas as Air-Care since 1979, are accused of diluting the disinfectant Sporicidin to one-tenth its strength, relabeling it and then unlawfully selling it as full strength to customers.
Among other things, Sporicidin is used in residential and commercial air duct cleaning to limit the growth of bacteria and organisms, including potentially deadly flu viruses, according to the charging documents.
Both Air-Care and its owner, Richard Papaleo, pleaded guilty Monday to felony charges of lying to the U.S. Environmental Protection Agency and misdemeanor charges of violating federal laws designed to control the use of pesticides.
Papaleo declined comment on Tuesday.
Company engineer Michael Stanovich, who was in charge of research and development, pleaded guilty to the misdemeanor pesticide charges and agreed to cooperate with prosecutors.
The defendants are to be sentenced April 8 before U.S. District Judge Miranda Du. The company faces a maximum of roughly $1 million in fines.
The case, investigated by the EPA and FBI, was secretly filed in October and unsealed Monday after the guilty pleas.
According to the plea agreements, Air-Care bought 864 gallons of Sporicidin from the manufacturer between 2005 and 2010 and resold 6,321 gallons of the diluted product as original strength for $100,000.
On its website, Air-Care says it has grown from a small start-up company in 1979 to an "international authority on air duct cleaning equipment and services."
The values listed as guiding its business include "honesty" and "faith in God."
The company, which has 35 employees and does $4 million a year in gross receipts in Las Vegas and across the country, has a 15,000-square-foot facility at 3868 E. Post Road.
In November 2009, undercover EPA agents bought four gallons of what they said was counterfeit Sporicidin from a California company Air-Care was supplying, according to the documents.
Federal agents raided the training and manufacturing center in the southeast valley in February 2010 and seized phony Sporicidin labels, court documents show.
When interviewed by agents at the time, the documents allege, Papaleo denied diluting the disinfectant, but Stanovich later told agents that Papaleo had been directing employees to dilute and repackage the chemical for the past decade.
Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.
