The New Jersey-based homebuilder K. Hovnanian Enterprises is under investigation by the Department of Justice for possible violations of the Clean Water Act.
Hovnanian, which has been fighting for almost a decade to construct the Four Seasons development on Kent Island on Maryland’s Eastern Shore, is being investigated for storm water discharge practices at several of its mid-Atlantic development sites, according to a Securities and Exchange report the company filed in June.
The inquiry into Hovnanian, one of the nation’s 10 largest builders, is for storm water runoff from construction activities, which can have a significant impact on water quality. As rain water flows over a construction site, it can pick up pollutants including chemicals, debris, and sediment. Without controls and barriers, the runoff often washes into the nearest waterway where it can harm or kill fish and other wildlife, in addition to causing erosion.
According to the report, the Department of Justice began looking into the company’s storm water discharge practices after a series of inquiries by the Environmental Protection Agency in connection with homebuilding in the agency’s Region 3, which includes Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia. Hovnanian has developments in each of those states, but its filing mentioned only two EPA notices of violations, both related to projects in Pennsylvania.
“We have no further comment beside what is in the SEC filing,” said Doug Fenichel, a K. Hovnanian spokesman.
While officials from both the EPA and the Justice Department said they do not release information or comment on ongoing investigations, Mark Pollins, director of the EPA’s Water Enforcement Division, said the Justice Department generally becomes involved in the more egregious and complex cases, which are likely to result in larger penalties.