As a Coolant Is Phased Out, Smugglers Reap Profits Elisabeth Rosenthan and Andrew W. Lehren - Star Advertiser
go to original September 8, 2012

The chief executive of the century-old company from America's heartland shifted nervously on the witness stand here as he tried to explain how a trusted senior vice president had been caught on a wiretap buying half a million dollars in smuggled merchandise, much of it from China.

But the contraband purchased by Marcone, a St. Louis-based company that claims to be the nation's largest authorized source for appliance parts, was not counterfeit handbags or fake medicines. It was a colorless gas that provides the chill for air conditioners and refrigerators from Miami to Mumbai, India, from Bogota, Colombia, to Beijing.

Under an international treaty, the gas, HCFC-22, has been phased out of new equipment in the industrialized world because it damages the earth's ozone layer and contributes to global warming. There are strict limits on how much can be imported or sold in the United States by U.S. manufacturers.

But the gas is still produced in enormous volumes and sold cheaply in China, India and Mexico, making it a profitable if unlikely commodity for international smugglers.

So in 2009, Carlos Garcia, the Marcone vice president, generated big business for his company's growing air-conditioning operation by selling smuggled foreign gas to repairmen at rock bottom prices in a promotion called Freaky Freon Fridays, drawing on a brand name that many use as a synonym for coolants.

Although it has been illegal to sell new air conditioners containing HCFC-22 in the U.S. since 2010, vast quantities of the gas are still needed to service old machines. Importing HCFC-22 without the needed approvals, as Marcone did, violates international treaties and U.S. law and regulations.

Yet for a long time, "Mr. Garcia was a hero to his company" for the profits his Freaky Freon Friday campaign generated, an assistant U.S. attorney, Thomas A. Watts-FitzGerald, told a rapt federal courtroom here in April.

On June 26, Garcia was sentenced to 13 months in federal prison.

Read more at The Star Advertiser

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