Tanker repair company owner pleads guilty to HMTA, OSHA violations

Tanker repair company owner pleads guilty to HMTA, OSHA violations
Loren Kim Jacobson, owner of KCCS Inc., pleaded guilty to charges of making an illegal repair of a tanker that led to an explosion and the injury of an employee, as well as lying to the Occupational Safety and Health Administration.

POCATELLO, Idaho – The owner of a tanker testing and repair company has pleaded guilty to making an illegal repair to a cargo tanker in violation of the Hazardous Materials Transportation Act (HMTA) and then lying to the Occupational Safety and Health Administration (OSHA), according to Acting U.S. Attorney Rafael M. Gonzalez Jr.

Loren Kim Jacobson, 65, of Pocatello, Idaho, is the owner of KCCS Inc., a tanker testing and repair company. The case arose from an explosion that occurred at KCCS during a cargo tanker repair on August 14, 2018, severely injuring a KCCS employee.

According to the plea agreement, the KCCS employee’s welder flame pierced the skin of the tanker, which contained residual flammable material, resulting in the tanker exploding. After the explosion, an OSHA investigator interviewed Jacobson about the circumstances surrounding the accident, as part of an investigation into whether Jacobson had violated OSHA safety standards for cargo tanker repair work. Jacobson made a materially false statement to the OSHA investigator during that interview — namely that the employee was merely an “observer,” not an employee, and that KCCS did not have any employees. OSHA requirements only apply to “employers.”

According to a statement released by the U.S. Attorney’s Office for the district of Idaho, Jacobson lied about not having employees to evade legal repercussions and penalties for his violation of various OSHA safety standards during the repair that resulted in the explosion.

“The terrible injuries involved this case are a stark reminder of the need for workplace safety requirements and enforcement,” said Gonzalez. “I commend the investigators at OSHA, the Department of Transportation and the Environmental Protection Agency (EPA) for uncovering the evidence in this case. Working with our partners, our office will continue to hold employers accountable for criminally endangering their employees.”

Jacobson admitted in the plea agreement that he did not possess the necessary certification to conduct the cargo tanker repairs that he regularly conducted. Under the HMTA, all repairs to the skin of a cargo tanker require that the repairperson hold an R-stamp, which can be obtained only after meeting training requirements. The purpose of this requirement is to ensure that those conducting repairs on cargo tankers — which often haul flammable materials — have adequate training and the expertise to do so.

Jacobson admitted he had a regular practice of making repairs requiring an R-stamp — knowing he did not have one — and that he would send employees into the cargo tankers to weld patches from the inside of the tanker so the illegal repairs would not be visible from the outside.

Jacobson did not follow OSHA safety standards for protecting employees from such dangerous “confined space entries.” According to the plea agreement, Jacobson directed his employee to conduct a hidden repair of this type on the tanker that exploded, in violation of both OSHA safety standards and the R-stamp requirement.

“The Environmental Crimes Section’s Worker Safety Initiative is designed to make sure that employers like Loren Jacobson, who shirk safety requirements and put their employees, customers, and the public at risk, are held accountable for their actions,” said Acting Assistant Attorney General Jean Williams for the Justice Department’s Environment and Natural Resources Division. “We are committed to protecting the lives and health of those who do the important work of keeping safe cargo vehicles on the road. This prosecution makes clear to others who might be tempted to ignore these certification and safety programs that they will face felony consequences for putting their employees and the public in danger.”

Jacobson is scheduled to be sentenced on Aug. 25, 2021 before U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.

Both the HMTA violation and the false statement offenses that Jacobson pleaded guilty to are punishable by up to five years in prison, up to three years of supervised release, and a fine of up to $250,000.

“Today’s guilty plea is a sober reminder that endangering the health and safety of commercial industry workers and the public by violating federal hazardous materials transportation requirements will not be tolerated,” said Cissy Tubbs, special agent in charge of the Department of Transportation Office of Inspector General. “We offer our sincerest condolences to the victim of the August 2018 explosion and remain steadfast in our commitment to working with our law enforcement and prosecutorial partners to hold accountable those who flaunt federal requirements to place financial gain above public safety.”

Trial Attorney Cassandra Barnum of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorney Josh Hurwit of the District of Idaho are prosecuting this case. The investigation was handled by the Department of Transportation, the EPA, and OSHA.

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