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After dumping chemicals into the Cape Fear River for years, American Distillation Inc. avoided a $500,000 fine, and its owner secured a delay in reporting to prison.
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American Distillation pleaded guilty in December 2025 to knowingly discharging pollutants into the Cape Fear River over four years. Under its plea agreement, the company faced a fine of up to $500,000 and agreed to establish and enforce an environmental compliance plan.
The company intended to meet those obligations when it signed the agreement, its attorney wrote in August. But its “current financial circumstances are such that the company does not have the funds to pay a fine and may not be able to afford to implement the ECP,” the filing states.
Prosecutors sought the maximum fine during Friday’s sentencing hearing in the federal Eastern District of North Carolina, but U.S. District Judge Louise Flanagan declined to impose one, U.S. Attorney Ellis Boyle said.
Instead, Flanagan gave the company 90 days to submit its environmental compliance plan and retain an independent environmental consultant, according to the U.S. Attorney’s Office for the federal Eastern District of North Carolina. If the company fails to do so, it will face a $100,000 fine. The company was also sentenced to five years probation, allowing the court to supervise the implementation of the plan. Other conditions include providing financial information on request, submitting to inspections of its books and records and questioning of corporate officers, according to the U.S. Attorney’s Office.
Boyle told The News & Observer that the compliance plan should help ensure that the company follows environmental laws moving forward.
“We believe in having a safe environment and clean water, and the federal government is paying attention and we’ll catch you if you do the bad thing,” Boyle said. “We just ask that people do the right thing and don’t pollute our beautiful rivers and waterways.”
The company’s owner, Andrew Simmons Jr., 83, was scheduled to report to prison Thursday to begin his 10-month sentence for not paying his taxes.
On Sunday, he asked for a three-month delay, but the prosecutor objected. As the company’s sole owner, Simmons said he needed the time to help develop a court-ordered environmental compliance plan and pursue discussions about new ownership.
Flanagan extended Simmons’ reporting date to Oct. 13.
The company’s uncertain future follows four years of illegal discharges into the Cape Fear River.
For 34 years, American Distillation has used its facility west of Wilmington to blend industrial-grade alcohol under an EPA permit that set discharge limits and established monitoring and reporting requirements.
In court documents, federal investigators contend that around 2019, company officials accepted more chemicals than they could safely dispose of and secretly discharged the byproducts into the Cape Fear River.
During the company’s distillation process, the byproducts — a mix of tert-butyl hydroperoxide, isopropyl alcohol, acetone and water — were stored in a 250,000-gallon tank.
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Up to six times per year between 2020 and 2024, Barry White, the company’s production manager, connected a hose to the tank storing the byproduct, turned a valve, and let about 2,500 gallons of polluted wastewater flow into a pipe that led to the river, the criminal complaint states.
White, the company, and its owner Simmons were all charged in the same indictment and pleaded guilty to different crimes.
Like the company, White pleaded guilty to knowingly discharging a pollutant into federal waters. He was sentenced in June to two years’ probation, including up to eight months of home confinement.
Simmons pleaded guilty to failing to pay 2023 income taxes. A judge sentenced him to 10 months in prison and ordered him to pay more than $112,000 to the IRS.
More than two decades earlier, Simmons and another company that he led were convicted of polluting the Cape Fear River and evading federal taxes.
In 2003, Simmons pleaded guilty to environmental and tax violations involving High Rise Services Co., which refined used oil into usable products and cleaned storage tanks on the same property as American Distillation. In 2003, Simmons pleaded guilty to environmental and tax violations involving High Rise Services Co. Simmons was sentenced to two years in prison and fined $50,000.
High Rise Services was ordered to pay more than $1 million to the federal government. The company’s bookkeeper and tank farm foreman were also convicted in the scheme.
American Distillation’s illegal discharges added to decades of industrial pollution in a river that supplies water to nearly a million people.
“That section of the Cape Fear River, around that facility and downstream of that facility, has been just really abused over the last 100 years or so,” said Kemp Burdette, head of the Cape Fear River Watch. “They are discharging into a waterway that already has a lot of serious pollution issues, and also has a lot of folks who fish there for consumption.”
American Distillation is in Leland and sits just upstream of Navassa, a town outside of Wilmington that’s home to about 2,000 residents and several popular fishing spots. Exposure to water contaminated with these chemicals doesn’t pose an immediate danger, but research shows it can cause damage to the liver and kidneys over time.
While the EPA doesn’t regularly test the Cape Fear River for the pollutants American Distillation was dumping, routine monitoring has shown that the company violated requirements for managing and reporting hazardous waste several times over the past six years.
The EPA fined the company $39,500 in 2022. It has continued to violate hazardous waste requirements well into 2026, federal records show.
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This story was originally published September 9, 2026 at 2:31 PM.