Picture credit - Hyundai Facebook Page

A Hyundai connected construction equipment company pleaded guilty and was sentenced in federal court in Georgia. The company was ordered to pay $1.95 million for fraud against the government with violations to the Clean Air Act.

The charges relate to construction equipment Hyundai imported for sale into the United States from the Republic of Korea that contained engines that did not comply with air emissions standards under the Clean Air Act.

Hyundai imports construction and other equipment into the United States, which it sells to its dealer network. During a phase-in period for new air emissions standards, Hyundai opted to participate in a transition program that allowed it to import limited numbers of engines not in compliance with the new standards.

As part of the program, Hyundai had to report the number of imported noncompliant engines to the U.S. Environmental Protection Agency. Hyundai’s imports of noncompliant engines substantially exceeded its allowance.

A consultant retained by Hyundai to provide advice about complying with the requirements warned the company that it was out of compliance and that it risked a substantial penalty. The consultant advised Hyundai to stop importing and notify the EPA.

Nonetheless, Hyundai continued to import the noncompliant engines, and its employees conspired to lie to the EPA and to impede EPA’s ability to enforce emissions standards. Ultimately, Hyundai submitted a report that intentionally understated the number of noncompliant engines it had imported from Korea.

“This case underscores the necessity for foreign companies that opt to do business in the United States to comply with our Nation’s laws developed to protect human health and the environment,” said Assistant Attorney General Jeffrey Bossert Clark for the Environment and Natural Resources Division. “A self-reporting regime, such as the one here, depends upon the honesty and integrity of the regulated parties. We hope that this case will chart a new course for Hyundai, and serve as a lesson for all companies that interact with our regulatory agencies.”

“Hyundai Construction Equipment Americas tried to increase its profits by illegally importing diesel engines that did not comply with U.S. Clean Air Act regulations,” said EPA Office of Enforcement and Compliance Assurance Assistant Administrator Susan Bodine. “This case shows that EPA and our law enforcement partners will not allow importers to gain a competitive advantage or risk the health and safety of our communities by evading U.S. environmental laws.”

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