UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE

 

 

AT KNOXVILLE
UNITED STATES OF AMERICA, 

Plaintiff, 
Case No: 3:17-cr? 
v. 
Judges: Va, do in 1m lieu
BERTHOLD TECHNOLOGIES KJ
U.S.A., LLC 

Defendant. 

PLEA AGREEMENT

The United States of America, by the United States Attorney for the Eastern District of
Tennessee, and the defendant, BERTHOLD TECHNOLOGIES, USA (hereinafter 
or ?the defendant?), by and through its authorized representative, General Manager Jon
Buchanan, and its attorney, Wade V. Davies, have agreed upon the following:

1. The defendant agrees to plead guilty to the Information ?led in the above-
captioned case, which is incorporated herein by reference, charging violations of 49 U.S.C. 
5124(a), knowingly violating 49 U.S.C. 5104(a) by misrepresenting that package complied
with requirements for transportation of hazardous materials. The punishment for this offense is a
?ne of up to $500,000 and a special assessment of $400.00 per count.

2. The defendant has read the Indictment and understands the crimes charged. The
defendant is pleading guilty because the defendant is in fact guilty. In order to be guilty, the
defendant agrees that each of the following elements of the crime must be proved beyond a
reasonable doubt:

a. The defendant, by and through its employees or officers or others

authorized to act on its behalf and within their scope of employment, made a

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3.

representation, by marking or otherwise, that a package, component of a package,
or packaging for transportation of hazardous material met the requirements of the
applicable regulation or regulations, to wit, that the package had been subjected

to water spray, free drop, stacking, and penetration testing pursuant to 49 CPR. 

173 .465;
b. such representation was false; and
c. the defendant acted knowingly, in that it had actual knowledge of the

facts giving rise to the Violation, or a reasonable person acting in the
circumstances and exercising reasonable care would have the knowledge of the
Violation.

In support of the defendant?s guilty plea, the defendant agrees and stipulates to the

following facts, which satisfy the offense elements. These are the facts submitted for purposes

of the defendant?s guilty plea. They do not necessarily constitute all of the facts in the case.

Other facts may be relevant to sentencing. Both the defendant and the United States retain the

right to present additional facts to the Court to ensure a fair and appropriate sentence in this case

a. BERTHOLD USA is a limited liability c01poration registered in the State
of Tennessee. BERTHOLD principal business address is 99 Midway
Lane, Oak Ridge, Tennessee. BERTHOLD USA is a wholly-owned subsidiary of
Berthold Technologies, Co. (hereinafter ?Berthold located in Bad
Wildbad, Germany. BERTHOLD USA is a ?person? as that term is used in the
statutes referenced herein.

b. The Pipeline and Hazardous Materials Safety Administration (hereinafter

of the United States Department of Transportation regulates the

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packaging requirements for the transportation of hazardous materials, including
certain radioactive materials pursuant to 49 CPR. Part 178, Subpart K, and

49 CPR. Part 173, Subpart I. These regulations require, among other things, that
the packaging for ?Class 7? radioactive materials, which includes Cesium 137,
meet certain design and performance requirements as provided in 49 C.F.R.

173 .465, including water spray, free drop, stacking, and penetration testing.

6. BERTHOLD USA developed a density measuring device, known as the
Berthold Technologies LB8010 Heavy Duty Source Shield (hereinafter 
for measuring ?uid density to be used in the oil and gas ?fracking?
industry to measure the density of ?uids being injected into underground wells.
The LB8010 employed a gamma particle emitter that contained Cesium-137, and
was subject to the Type A packaging requirements under 49 C.F.R. Part 173,
Subpart I. The applicable regulations required that the US LB8010 be subjected
to water spray, free drop, stacking, and penetration testing as set forth in 49
CPR. 173.465. The LB8010 was to be manufactured in the United States.

d. Berthold DE had previously produced a device (hereinafter ?the DE

LB 8010?) similar to the US. however, there were signi?cant and
material design differences between the design and construction of the

US LB8010 and ofthe DE LB8010.

e. The DE LB 8010 was safety tested according to the International Atomic
Energy Agency standards for Class 7 radioactive materials and, as such, could be
used to transport the DE LB8010 in the United States See 49C.F.R. 

f. BERTHOLD USA produced, marketed, and sold the US LB08010

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throughout the United States and represented that it was manufactured in
Germany and had been tested and conformed to the DOT Type A Package testing
requirements; however, in truth and in fact, at the relevant times set forth herein,
the US LB8010 was manufactured in Oak Ridge, Teimessee, and had not been
subjected to the requisite water spray, free drop, stacking, and penetration safety
testing as set forth in 49 C.F.R. 173.465.
g. BERTHOLD USA af?xed a label plate to the US LB8010 that falsely and
fraudulently represented that the device had been manufactured in Germany.
h. On or about March 21, 2014, BERTHOLD USA sold and shipped two of
the above-described US LBSOIOS from the Eastern District of Tennessee to a
business located in Midland, Texas.
i. On or about October 21, 2014, BERTHOLD USA sold and shipped three
of the above?described US LBSOIOS from the Eastern District of Tennessee to El
Reno, Oklahoma.
4. The defendant understands that by pleading guilty the defendant is giving up

several rights, including:
a. the right to be indicted by a grand jury;
b. the right to plead not guilty;
c. the right to a speedy and public trial by jury;
d. the right to assistance of counsel at trial;
e. the right to be presumed innocent and to have the burden of proof placed
on the United States to prove the defendant guilty beyond a reasonable doubt;

f. the right to confront and cross-examine Witnesses against the defendant;

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g. the right to testify on one?s own behalf, to present evidence in opposition
to the charges and to compel the attendance of witnesses; and
h. the right not to testify and to have that choice not used against the
defendant.

5. The parties agree that the appropriate disposition of this case would be the

following as to each count:

a. The Court may impose any lawful fines and any lawful term of probation
up to the statutory maximums.
b. The Court will impose special assessment fees as required by law; and
c. No promises have been made by any representative of the United States to
the defendant as to what the sentence will be in this case. Any estimates or 
predictions made to the defendant by defense counsel or any other person
regarding any potential sentence in this case are not binding on the Court, and
may not be used as a basis to rescind this plea agreement or withdraw the
defendant?s guilty plea. The defendant understands that the sentence in this case
will be determined by the Court after it receives the presentence investigation
report from the United States Probation Of?ce and any information presented by
the parties. The defendant acknowledges that the sentencing determination will
be based upon the entire scope of the defendant?s criminal conduct, the
defendant?s criminal history, and pursuant to other factors and guidelines as set
forth in the Sentencing Guidelines and the factors set forth in 18 U.S.C. 3553.

6. Pursuant to Rule of the Federal Rules of Criminal Procedure, the

defendant and the United States agree to recommend that the Court impose the sentence set forth

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below. In the event that the Court declines to accept the parties? position on the recommended
sentence, the defendant will not have a right to withdraw the defendant?s guilty pleas:
a. On or before the date of entry of defendant?s guilty plea, the defendant
shall pay $50,000 to the Clerk, United States District Court for the Eastern
District of Tennessee, which shall be credited toward the full ?ne amount to be
paid at sentencing, as set forth below;
b. The sentencing of this matter shall be set approximately 18 months after
the entry of the defendant?s guilty plea. Prior to sentencing, the defendant shall
undertake remediating, re-packaging, or otherwise curing any packaging
deficiencies with the US LB 80105 that the defendant sold or placed into
commerce between April 1, 2007 and December 31, 2016, as required by
PHMSA (hereinafter ?remedial measures?), and submit documentation of
expenditures for such remedial measures to the United States Attorney?s Office
and United States Probation Of?ce for the Eastern District of Tennessee;
0. The minimum ?ne to be paid by the defendant shall be $50,000, paid upon

entry of the defendant?s guilty plea, as set forth above;

d. The total combined cost of the ?ll ?ne and the remedial measures to be

paid by the defendant shall be $500,000;

e. The defendant shall pay the $800.00 special assessment on the day of
sentencing;
f. In the event that the defendant has not completed the remedial measures

prior to the sentencing, the defendant shall be placed on probation for a period of

time, up to two years, suf?cient to complete the remedial measures; ?rrthermore,

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the computation of the total amount of ?ne to be paid shall be based upon the
costs of the remedial measures as of the date of sentencing. If the defendant has
completed the remedial measures and ful?lled its ?nancial obligations hereunder
at the time of sentencing, the defendant shall not be placed on probation; and

g. In the event that the ownership of Berthold USA is sold or transferred to
another party, defendant shall notify the representatives of any successor owner of
Berthold USA of terms of this Plea Agreement, including but not limited to the
remedial measures and payment of the ?ne amount as set forth above, prior to the
sale.

7. Given the defendant?s agreement to plead guilty, the United States will not
oppose a two?level reduction for acceptance of responsibility under the provisions of Section
3E1.l(a) of the Sentencing Guidelines. Further, if the defendant?s offense level is 16 or greater,
and the defendant is awarded the two?level reduction pursuant to Section 3E1 . 1 the United
States agrees to move, at or before the time of sentencing, the Court to decrease the offense level
by one additional level pm?sua'nt to Section 3E1.l(b) of the Sentencing Guidelines. Should the
defendant engage in any conduct or make any statements that are inconsistent with accepting
responsibility for the defendant?s offenses, including the commission of additional offenses prior
to sentencing, the United States will be free not to make silch motion or to withdraw such motion
if already made, and will be free to recommend to the Court that the defendant not receive any
offense level reduction for acceptance of responsibility under Section 3131.1 of the Sentencing
Guidelines.

8. Financial Obligations. The defendant agrees to pay all ?nes imposed by the Court

to the Clerk of Court. The defendant also agrees to tender the full ?ne amount to the Clerk of

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Court on the date of sentencing.

9. The defendant acknowledges that the principal bene?ts to the United States of a
plea agreement include the conservation of limited government resources and bringing a certain
end to the case. Accordingly, in consideration of the concessions made by the United States in
this agreement and as a further demonstration of the defendant?s acceptance of responsibility for
the offense committed, the defendant voluntarily, knowingly, and intentionally agrees to the
following:

a) The defendant will not file a direct appeal of the defendant?s conviction or
sentence.

b) The defendant will not, whether directly or by a representative, request or
receive from any department or agency of the United States any records pertaining to the
investigation or prosecution of this case, including, without limitation, any records that may be
sought under the Freedom of Information Act, 5 U.S.C. 552, or the Privacy Act of 1974,

5 U.S.C. 552a.

10. This agreement becomes effective once it is signed by the parties and is not
contingent on the defendant?s entry of a guilty plea. If the United States violates the terms of
this agreement, the defendant will have the right to withdraw from this agreement. If the
defendant violates the terms of this agreement in any way (including but not limited to failing to
enter guilty pleas as agreed herein, moving to withdraw guilty pleas after entry, or by violating
any court order or any local, state or federal law pending the resolution of this case), then the
United States will have the right to void any or all parts of the agreement and may also enforce
whatever parts of the agreement it chooses. In addition, the United States may prosecute the

defendant for any and all federal crimes that the defendant cormnitted related to this case,

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including any charges that were dismissed and any other charges which the United States agreed
not to pursue. The defendant expressly waives any statute of limitations defense and any
constitutional or statutory speedy trial or double jeepardy defense to such a prosecution. The
defendant also understands that a violation of this plea agreement by the defendant does not
entitle the defendant to withdraw the defendant?s guilty plea in this case.

11. This plea agreement and the supplement constitute the full and complete
agreement and understanding between the parties concerning the defendant?s guilty plea to the
above-referenced charges, and there are no other agreements, promises, undertakings, or
understandings between the defendant and the United States. The parties understand and agree
that the terms of this plea agreement can be modi?ed only in writing signed by all of the parties
and that any and all other promises, representations, and statements whether made before,

contemporaneous with, or after this agreement, are null and void.

 

 

 

NANCY STALLARD HARR
UNITED STATES ATTORNEY
. 
mwoa 20/ 7 By: W7 
Date 0 I Matthew T. Mon'is

Assistant United States Attorney

July ?JZor] 

 

 

Date Ber-Mid Techologies, U.S.A., LLC
Defendant

By: General Manager I on Buchanan
Authorized Representative

7/6/2017 

Date Wade V. Davies
Attorney for the Defendant

 

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