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Utah: BP Amoco filed fraudulent cleanup claims

Published: Tuesday, Dec. 4 2012 11:25 a.m. MST

SALT LAKE CITY — Yet another big oil company has landed in the crosshairs of Utah environmental regulators and the Utah Attorney General's Office because of alleged fraud that topped more than $1 million over 12 years.

A suit filed in 3rd District Court asserts that BP Amoco received nearly $1.5 million from the state's Petroleum Storage Tank Fund to pay for leaks when it had its own insurance to cover the costs of cleaning up contaminated soil and groundwater.

The fraudulent claims, alleged to have been submitted to Utah from 1995 to 2007, covered costs of cleanup at BP Amoco service stations, even though the company had its own private pollution liability coverage.

Established by the Utah Legislature in 1989, the Petroleum Storage Tank Fund is designed to provide help to owners and operators of gas stations to cover costs when a tank has a release of petroleum. Members of the fund are assessed a surcharge on the petroleum products dispensed from their gas stations to help pay for the expenses of cleanup if a leak happens.

Under the provisions of the fund, gas station operators pay the first $10,000 of the costs associated with cleanup, and then the fund will pay up to $1 million or $2 million in costs, depending on when the leak happened.

According to the complaint lodged against BP Amoco, the company failed to disclose its private coverage to the state, which made it ineligible to receive reimbursement.

In 2011, BP and its subsidiaries — including Amoco — were sued by Montana on similar allegations of double-dipping that stretched into the millions.

Earlier this year, nearly $1 million in fines against BP Amoco were upheld by the Michigan Court of Appeals after the state environmental agency there said the company failed to adequately address pollution from leaking underground storage tanks at seven contaminated sites.

This latest suit against an oil company brought on behalf of the Utah Division of Environmental Remediation and Response is the second one Utah has initiated.

In the earlier action filed in July, petroleum giant ConocoPhillips is alleged to have used false insurance claims to take $25 million from Utah over 14 years, misrepresenting it had no other insurance to pay for cleanup of leaky underground storage tanks.

E-mail: amyjoi@desnews.com, Twitter: amyjoi16

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