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Historic Renovation Leads to Charges

Wednesday, May 18, 2016

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A Washington, DC, renovator faces decades in prison for his involvement in a scheme to improperly remove asbestos from a historic building, authorities have announced.

James Powers, 59, has been charged with violating the Clean Air Act, wire fraud and first-degree fraud, according to an announcement from the U.S. Attorney’s Office for the District of Columbia.

The indictment also includes a forfeiture allegation seeking all proceeds that can be traced to the fraud scheme.

Friendship House
Wikimedia Commons / AgnosticPreachersKid / CC by-SA 3.0

Authorities say James Powers defrauded investors and exposed workers to asbestos during a project to convert the historic Friendship House, in Washington D.C., into condominiums.

According to the case documents, asbestos—a once-popular fireproofing insulation and building material—is known to cause lung cancer, asbestosis and mesothelioma in people who inhale the fibers released when the material is disturbed.

Congress has determined that there is no “safe level” of exposure to asbestos, authorities say.

Defrauding Investors

The case stems from a development project converting the historic Friendship House in Washington into condominiums, known as The Maples.

Authorities say that in March 2010, Powers formed a partnership with a local real estate development firm to purchase and renovate the Friendship House. Originally designed in 1795, the Georgian home is described as the oldest privately owned residence existing on Capitol Hill. It was added to the National Register of Historic Places in 1973.

Case documents say that an asbestos survey conducted at the residence documented the material's presence throughout the property, including in floor tiles, wall board and pipe insulation. After the survey, the partnership received bids from licensed professional asbestos abatement and renovation firms in the area.

asbestos hazard sign
© iStock.com / shank_ali

The Clean Air Act requires that renovation in asbestos-containing properties follow specific protocols designed to safely remove the hazardous material from the property prior to any renovation or demolition activity.

However, prosecutors say that despite receiving those bids and knowing that the building contained asbestos, Powers hired Larry Miller, 58, of Palmetto, GA, a general contractor with no training, certification, or experience in asbestos abatement, to conduct interior demolition and renovation of the building.

Powers allegedly told his business partners that a qualified entity would conduct appropriate asbestos abatement at the property and emailed them a proposed contract, but the contract was with a corporation that, unbeknownst to his partners, was an alter-ego for Powers, prosecutors said.

Endangering Workers

The indictment further alleges that Miller and his crew of workers conducted interior demolition at The Maples during September and October 2011, without any asbestos abatement having occurred.

Even after an inspection by local environmental authorities discovered asbestos in the building, Powers had the workers continue demolition, according to authorities.

Over the course of the project, the workers disturbed substantial quantities of asbestos, exposing themselves to a substantial risk of serious illness later in life, prosecutors maintain.

Capitol Hill
© iStock.com / Aleksander Mirski

The project at the center of this case involves converting the oldest privately owned residence on Capitol Hill.

After the acts described in the indictment, a licensed asbestos abatement firm conducted proper abatement at The Maples. The District of Columbia Department of the Environment subsequently conducted inspections and found the property to be free of all asbestos-containing materials.

Contractor Pleaded Guilty

For his involvement, Miller was charged with one count of negligent endangerment under the Clean Air Act.

He pleaded guilty on Nov. 19, 2015 and is awaiting sentencing by the Honorable Amy Berman Jackson in the U.S. District Court for the District of Columbia.

The charge carries a maximum sentence of not more than one year of imprisonment, a fine of up to $100,000, and a term of supervised release and/or probation.

Clean Air Act

“This businessman is accused of endangering his own work crew by not taking the proper steps to renovate a building containing asbestos,” said U.S. Attorney Channing D. Phillips. “The indictment in this case reflects our determination to enforce the federal Clean Air Act and other laws that protect the health and safety of workers and citizens in the District of Columbia.”

The Clean Air Act requires that renovation in asbestos-containing properties follow specific protocols designed to safely remove the hazardous material from the property prior to any renovation or demolition activity, so as not to expose workers to the risk of deadly respiratory diseases.

If convicted, Powers faces up to five years in prison and a fine of up to $250,000 or twice the gross gain or loss to victims under the Clean Air Act, and a maximum of 20 years in prison and a fine of up to $250,000 or twice the gross gain or loss to victims under the wire fraud statute.

   

Tagged categories: Asbestos; Condominiums/High-Rise Residential; Developers; Ethics; Health and safety; Historic Structures; Multifamily; Renovation

Comment from M. Halliwell, (5/18/2016, 11:51 AM)

Hmmmm...I'm a little appalled by the charges. I'd say Powers should be hit with at least a negligent endangerment charge per exposed worker, not one for the entire crew. Other than the timeline (i.e. he didn't kill the crew then and there), if any of the crew develop an incurable asbestos related illness I'd say this could (and maybe should) qualify as manslaughter. After all, Powers may very well have killed members of this crew while committing another crime.


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