Federal authorities nail another diesel engine plant with $10 million fine for removing emissions equipment

The U.S. federal government has made it clear: Violating the Clean Air Act means big trouble. Diesel truck tuners have learned that the hard way over the past three years, paying huge criminal and civil fines that regularly reach seven figures. As it turns out, the Environmental Protection Agency and the Department of Justice are willing to go even further, having nailed down a North Carolina repair facility for $10 million.

The Justice Department issued a press release earlier this week naming Rudy’s Performance Parts and its owner Aaron Rudolf as responsible for manufacturing, selling and installing the emission-reducing devices. Rudy’s pleaded guilty and was sentenced Tuesday, Sept. 10, to pay a $2.4 million fine for conspiring to violate the CAA. This follows an earlier conviction and fine in April in which Rudolf was ordered to pay $600,000 and serve three years of probation from the organization.

By far the largest monetary penalty comes from a civil lawsuit the feds filed against Rudy and Rudolf, which the Justice Department filed on behalf of the EPA for helping the defendants provide defeat devices to customers when they “failed to adequately respond to EPA’s formal requests for information.” The result was a $7 million consent decree filed July 29.

“For too many years, companies like Rudy’s have installed illegal adulteration devices to circumvent the public health protections of the Clean Air Act, harming communities across America,” said Deputy Administrator David M. Uhlmann of the EPA’s Office of Enforcement and Compliance Assurance. “Today’s announcement demonstrates that EPA will vigorously pursue criminal and civil penalties until this egregious illegal conduct ends.”

There is no doubt that $10 million is a huge amount. It is the largest fine and penalty in any case I have discussed involving independent diesel repair shops. However, according to the DOJ and EPA findings, Rudy’s generated tens of millions of dollars in revenue from the sale of software tuning devices alone. There is a lot of money involved at every level of this situation.

Court documents say Rudy’s best-selling product was the Mini-Maxx tuner, a part manufactured by another entity referred to as “Company A.” Rudy’s also sold XRT Pro tuners, which were also manufactured by Company A. It’s worth noting that H&S Performance, another aftermarket parts manufacturer that was ordered to pay for violating the CAA, manufactured products with the same name. The DOJ press release says that after Company A discontinued production of the Mini-Maxx and XRT Pro, Rudy’s conspired with others to produce fake tuners that were falsely branded. This was initially done through an agreement with a software technician who agreed to work with Rudy’s, and the arrangement lasted from July 2015 to December 2016.

Rudy’s then began counterfeiting these tuners in-house. This involved purchasing an $850,000 laptop, as the computer contained software to convert other tuners to Mini-Maxxes and XRT Pros. By July 2018, when the company went out of business, Rudy’s had sold nearly 44,000 counterfeit tuners and generated about $33 million in revenue from them. All of this is consistent with DOJ reports.

The consent decree further requires Rudy’s and Rudolf’s to cease providing technical support for the defeat devices, deny all warranty claims and instruct authorized dealers to do the same, among other things. There can be no sale or transfer of intellectual property related to the defeat devices, and all marketing materials must remove any information about emission control manipulation. All remaining aftermarket defeat devices, if any, in the possession of Rudy’s and Rudolf must be forfeited.

This shows that as long as the Environmental Protection Agency and the Department of Justice have the blessing of the current administration, they will continue to impose fines and penalties for Clean Air Act violations with full force.

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