Lupo, Employee Expected to Testify at Appeal Hearing

The owner of the Youngstown company facing federal charges for ordering chemically-laced oilfield waste dumped down a storm sewer that led into the Mahoning River and an employee facing similar charges are among the 12 people expected to testify at a hearing in two weeks that will decide if the company’s permits should remain inactive or be reinstated.

Ben Lupo, 62, of Poland, and Michael Guessman, 34, of Cortland, are among a list of people expected to be called to testify in D&L Energy’s May 22 appeal hearing in front of the state’s Oil and Gas Commission, according to case filings.

Lupo stepped down as the company’s president after federal and state investigators and inspectors caught the company illegally dumping waste in February and retained an 81 percent ownership in the companies, according to records.

Lupo and Guessman are facing federal illegal dumping charges in U.S. Northern District Court in Cleveland that carry a maximum three year prison sentence.

The Oil and Gas Commission on April 25 denied D&L’s request for a restraining order allowing the permits to remain active until the appeal is decided.

The Ohio Department of Natural Resources revoked six permits for brine injection wells, denied three pending injection well applications and ordered operations to stop at three temporary storage containers for Lupo-owned companies.

Lupo and Guessman were named as witnesses that attorneys for the ODNR expect to call. Both could testify about their relationship and involvement in the company and knowledge of illegal dumping and improper brine handling, the filings say.

ODNR also expects to the Division of Oil and Gas Resources Management deputy chief, Robert Worstall, three of the division’s mineral resources inspectors, an underground injection control geologist and the state Environmental Protection Agency on-scene coordinator.

D&L expects to call Nicholas Paparodis, the companies’ CEO and president, to testify about D&L’s business’ history, the actions of the companies’ board of directors and “factual issues” regarding ODNR’s permit revocation order.

Kathie Kaniclides, D&L’s secretary and treasurer, could also be called by the company to testify about the business’ records and history, as could William Hayes, a former dispatcher for Hardrock Excavating and Mohawk Disposal Management,  both owned by Lupo, could be called to testify about Hardrock leasing trucks from Mohawk for brine hauling. The state has said Hardrock failed to receive permits for brine hauling.

Division of Oil and Gas Resources Management chief Richard Simmers could also be called by D&L attorneys, filings say.

D&L also owned an injection well that was found to be the cause of 11 earthquakes in late 2011 and early 2012 in the Youngstown area. Those injection wells were shut down by the state. The company was cited for more than 50 violations in Ohio since the 1980s, but ODNR granted Lupo a permit for a new injection well on Jan. 7, according to records obtained by WKBN.COM.

The company has filed for Chapter 11 bankruptcy. Filings say D&L owns assets totaling more than $50 million and expects to make more than $2 million this year. Lupo resigned his position as president of the company the day after he was indicted, but kept an 81 percent ownership in the company filings say. His wife, Holly Serensky Lupo, owns four percent and Susan Faith, of Girard, owns the remaining 15 percent.

Bankruptcy filings also say officials may have improperly diverted funds from D&L to other companies the group owns and operates.

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