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SALT LAKE CITY — A central Utah oil company sold bad diesel fuel to Amtrak that caused eight trains to break down after leaving Salt Lake City in 2011 and cost taxpayers tens of thousands of dollars, the government claims.
The U.S Attorney's Office alleges in a civil complaint filed in federal court Friday that Sevier Valley Oil Co. breached its contract with Amtrak and is seeking more than $400,000 in compensation and damages.
The Richfield-based company denied the allegations through its lawyer, who called the lawsuit "insulting."
In one instance in May 2011, an Amtrak train was stranded without electrical power about 100 miles east of Elko, Nevada, after one of two locomotives began losing power, billowing smoke, and shooting flames and sparks out of its exhaust.
Both locomotives, which had been refueled in Salt Lake City a few hours before, later stopped and could not be restarted. Amtrak leased a locomotive from Union Pacific to tow the stranded train to Elko, where passengers were taken by bus. Some passengers were taken to the hospital because their medical devices were without power while they were on the stranded train, according to the U.S. Attorney's Office.
Amtrak later determined that contaminated fuel, which clogged the locomotives’ fuel injectors, caused all of the engine failures, the complaint says.
Matt Osborne, an attorney for Sevier Valley Oil, said the company "vehemently" denies knowingly or unknowingly delivering tainted fuel to Amtrak.
"Someone has to ask the rhetorical question, 'If the United States government believed, was sincere in its belief, that Sevier Valley Oil knowingly delivered it bad fuel, why did it continue to do business with it for nearly three years after?'" he said.
Sevier Valley, he said, provided fuel for all Amtrak trains running through the Salt Lake station for more than a decade, and the allegations are 5 years old.
Amtrak suspended Sevier from fuel deliveries after the incident involving the stranded train near Elko and asked Sevier to provide information about its refinery sources, according to the U.S. Attorney's Office.
Osborne called that statement "deceptive or uninformed." He said the suspension lasted a short time, and the government "knew darn well" that Sevier Valley continued to provide fuel to Amtrak until January 2014, when the oil company decided to no longer bid on the contract.
Sevier Valley provided Amtrak with refinery test results from Silver Eagle, Tesoro, Holly and Sinclair. But the company did not disclose that it had obtained fuel from Rock Canyon Oil Co. in American Fork, which blended diesel fuel with refined used oil, according to the complaint.
Osborne said refinery records and delivery tickets show none of the fuel on the dates cited in the lawsuit came from Rock Canyon.
As part of its contract with Amtrak, Sevier Valley agreed to provide diesel fuel that would be free from grit, acid, microbial growth and other foreign material likely to clog pipes and strainers or damage injectors, the complaint says.
The federal government filed the lawsuit in U.S. District Court in Salt Lake City on behalf of Amtrak, which receives federal money and is governed by Congress. It seeks $242,452 for breach of contract, $144,245 in treble damages in fuel cost and up to $11,000 for each violation of the False Claims Act.