A former vice president of an electronic recycling firm operating in Ladysmith has been sentenced to federal prison followed by supervised release for her role in a scheme to hide hazardous waste from state regulators and federal auditors.
Bonnie Dennee, 66, of Phillips, was sentenced last Tuesday by U.S. District Judge William M. Conley to five months in federal prison, followed by a three-year term of supervised release, for conspiracy to store and transport hazardous waste without required permits and manifests, in violation of the Resource Conservation and Recovery Act (RCRA). Dennee pled guilty to this charge last October.
Dennee’s co-defendant, James Moss, 61, pled guilty to this charge last Sept. 1, and was sentenced to 18 months in prison. Co-defendant Thomas Drake, 80, signed a plea agreement to this charge on Dec. 31, 2019, which was filed on May 21, 2020. Finally, co-defendant Kevin Shibilski was indicted by a grand jury last Sept. 10. The indictment against Shibilski included a hazardous waste storage charge, as well as eight counts of wire fraud, and conspiracy to defraud the IRS by not paying employment taxes and income taxes.
Dennee worked for 5R Processors Ltd. based in Ladysmith. 5R was a Wisconsin-based corporation involved in recycling electronic equipment, appliances and other assets. Dennee pled guilty to a criminal complaint, charging that from 2011 to 2016, Dennee, Moss, Drake and others conspired to knowingly store hazardous waste such as broken and crushed CRT glass that contained lead at unpermitted facilities in Catawba, Glen Flora and Morristown, Tenn.; knowingly transport the hazardous waste without a required manifest and conceal these violations from state regulators in Wisconsin and Tennessee as well as auditors with a nationwide recycling certification program called R2.
At her plea hearing, Dennee admitted to attempting to conceal the illegal storage and transport of the crushed leaded glass from state regulators by various means, including:
• Changing the date labels on the containers;
• Hiding the containers by putting them inside semi-trailers and locking the trailer doors;
• Moving the containers to the back of the warehouse and stacking other pallets in front of them, making it impossible for regulators to see the boxes or inspect them;
• Storing the containers at a warehouse on Artisan Drive in Glen Flora known as the “Sunshine Building” and not disclosing the existence of this warehouse, or its contents, to state regulators or R2 auditors;
• Storing the containers at 5R’s plant in Morristown, Tenn., in two warehouse spaces that did not have electricity or power, and which were referred to by 5R employees as the “dark side” and the “dark-dark side;” and
• Providing the state regulators with inaccurate inventory and shipping records for the leaded glass.
At last week’s sentencing, Judge Conley told Dennee that once she left 5R in 2016, she could have reported the criminal conduct to regulators at the Wisconsin Department of Revenue, but she chose not to make such a disclosure. Conley pointed out her inaction, “let the community down.” Dennee agreed with the court’s assessment, adding she could not provide a good reason why she did not come forward after she left the company.
Nonetheless, Conley praised Denee for ultimately doing the right thing and cooperating with the government to help explain and unravel the criminal conspiracy, but noted that Dennee, “still needed to pay a price.”
Conley added, “I hope this sentence also delivers a message to others who wish to commit this same conduct.”
The charges against Dennee were the result of an investigation conducted by the Wisconsin Department of Natural Resources, Bureau of Law Enforcement; the U.S. Environmental Protection Agency, Criminal Investigation Division; and IRS Criminal Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Daniel J. Graber.
Last July, Shibilski, a former democratic Wisconsin State Senator from Wisconsin’s 24th Legislative District, filed civil fraud and conspiracy claims against Moss, Drake, and other former business partners, including Ladysmith Federal Savings & Loan. In 2013, Shibilski took over as 5R’s Chief Executive Officer. He alleged he was the victim of a scheme to defraud him and personally saddle him with 5R’s debts.
This week, Conley entered a judgement dismissing this case. In dismissing, Conley wrote, Shibilski has failed to adequately allege even one act to support his argument that defendants engaged in a pattern of racketeering.
“Further, because plaintiff’s Racketeer Influenced and Corrupt Organizations Act claims provide the only basis for this court’s exercise of original subject-matter jurisdiction, the court will decline to exercise supplemental jurisdiction over plaintiff’s remaining state law claims and will dismiss his complaint in its entirety,” Conley stated.
Conley also wrote, “ ... dismissal is proper when the allegations in a complaint, however true, could not raise a claim of entitlement to relief. While a complaint generally “does not need detailed factual allegations, it must be enough to raise a right to relief above the speculative level. In other words, a complaint must be ‘plausible,’ it must plead sufficient factual content to allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Last September, a federal grand jury returned an indictment against Shibilski alleging illegal storage and disposal of hazardous waste, multiple counts of wire fraud and a conspiracy to evade paying employment taxes. The 19-page document alleges Shibilski illegally stored and disposed of broken and crushed glass from cathode ray tubes that was hazardous due to lead-toxicity at facilities in Wisconsin and Tennessee.
The indictment also charges Shibilski with eight counts of wire fraud by taking in over $5.76 million from clients but failing to recycle more than 8.3 million pounds of their crushed glass from cathode ray tubes that had lead in them and instead stockpiling it at 5R Processors’ warehouses in Wisconsin and Tennessee. The final count in the indictment alleges Shibilski conspired to defraud the United States by the nonpayment and evasion of more than $850,000 in employment and income taxes for 5R Processors and its nominee entities.
Shibilski, who now lives in Merrill, served as a Wisconsin State Senator from 1995 to 2002.