FBI: Freedom Industries President Committed Criminal Fraud in West Virgina Chemical Spill

The former president of Freedom Industries, the company responsible for a massive chemical spill in West Virginia in January, lied to investigators about his involvement with the company to protect his personal wealth, the FBI has said.

In a complaint (pdf) unsealed Monday, the agency officially charged Gary Southern with bankruptcy fraud, false oath, and wire fraud, allegations which stem from a lengthy investigation into his involvement with Freedom prior to the spill which saw 10,000 gallons of hazardous waste dumped into West Virginia's Elk River from two faulty tanks on January 9, contaminating drinking water for 300,000 people.

Southern developed a scheme to distance himself from Freedom in order to deflect blame for the spill and protect himself from lawsuits filed against the company, FBI special agent James Lafferty stated.

With nearly $8 million in assets at stake, Southern had "substantial motive" to mislead investigators on his knowledge of the chemical storage facility's conditions, as well as his role in the sale of Freedom to another company weeks before the spill, Lafferty wrote in his affidavit. He added that Southern's statements to investigators are "either outright lies, or are, at the very least, misleading."

"Shortly after the leak and discharge of MCHM into the Elk River was discovered on January 9, 2014, Southern engaged in a pattern of deceitful behavior, which included numerous false and/or fraudulent statements about his role at Freedom, his role in the sale of Freedom to Chemstream, and his knowledge about conditions at the Etowah Facility," Lafferty continued.

In one particularly egregious lie, Southern claimed on more than one occasion that he did not work for Freedom prior to its 2013 sale to Chemstream, except briefly as a "financial consultant." In actuality, he had joined the company in 2009 as Chief Operating Officer, and remained on the board of directors from 2010 to 2013, the affidavit states.

Lafferty also discovered that Southern lied on documents to bankruptcy courts, indicating that he had only been president of Freedom Industries for six days when the spill occurred, and thus could not be held liable for the company's actions or the conditions of its storage facilities.

There is "probable cause to believe that Southern devised a scheme to defraud that began shortly after January 9, 2014, and is in fact ongoing," Lafferty wrote.

West Virginia Citizen Action Group development director Karan Ireland toldThinkProgress that the charges were a welcome development.

"As a citizen that was impacted by the leak, I'm happy to see that he is going to face criminal charges," Ireland said. "What most of us believe is that [Freedom was] criminally negligent, and so for us there's a sense of being vindicated."

"[I]t's a great day when people are held accountable," Ireland added. "This is something we can point to and say, when you're vigilant, and outspoken, things can happen. There are people who are working to see that justice prevails."

U.S. Attorney Booth Goodwin told the Charleston Gazette that the charges were not the end of the investigation into the leak.

"I do anticipate there will be further results very soon," Goodwin said. "This was a necessary and appropriate action taken in the course of our ongoing investigation into the chemical leak from Freedom Industries."