Terminix will pay $9.2 million in criminal fines tied to the company’s use of a banned pesticide that nearly killed a Delaware family vacationing in the Caribbean in March 2015, according to the federal Justice Department.
The company was sentenced Monday, two years after the Esmond family fell ill. Federal prosecutors said Memphis-based Terminix admitted to using a pesticide called methyl bromide at 14 locations — including at the Sirenusa condominium resort in St. John, Virgin Islands, where the Esmonds were vacationing.
“An entire family suffered horrendous and life-altering injuries. We will continue to aggressively enforce environmental laws to help prevent something like this from ever happening again,” Joycelyn Hewlett, attorney for the District of the Virgin Islands, said in a news release.
The federal Environmental Protection Agency has banned the pesticide, which is odorless and can severely damage the central nervous and respiratory systems, for residential use since 1984. Methyl bromide is effective against powderpost beetles, which destroy wood similarly to termites and are prevalent on the islands.
A Terminix worker sprayed the pesticide in the condo below where the family — Steve Esmond, then head of The Tatnall School’s middle school in Wilmington; his wife, Dr. Theresa Devine; and their two sons — was staying for eight nights in March 2015. They fell ill and had seizures two days later.
Months later, the governor of the U.S. Virgin Islands said Esmond and his sons were in serious to critical condition and had suffered neurological damage.
Terminix will pay $8 million in fines and $1 million in restitution to the Environmental Protection Agency for response and clean-up costs at the St. John resort, according to the Justice Department. The plea agreement initially was revealed in the 2016 annual report of Memphis-based ServiceMaster Global Holdings (SERV), Terminix’s parent company, and in January could have cost the company up to $10 million.
Terminix also will perform community service related to training commercial pesticide applicators in fumigation practices and create a separate health services training program, prosecutors said.
Almost a year ago, the U.S. Virgin Islands Department of Justice filed a civil suit against Terminix in Virgin Islands Superior Court, and ServiceMaster in its annual report said it has not yet recorded any charges in that case.
It is unclear how much the Esmonds have received from the company. The sentencing announcement said “full restitution” had been made to the family.
Financial filings from Terminix’s parent company last year suggested a settlement nearing $90 million was in the works. Attempts to reach Esmond family were unsuccessful.
Last month Dudley & Shanley LLC hedge fund increased its stake in ServiceMaster by almost 5% as its stock price declined while markets rallied, according to the Miami-based investor website BZWeekly. ServiceMaster stock is up about a third from a year ago, and at midday it was down less than 1% from its opening price of $47.42.