A federal judge recently ruled that Kevin Shibilski, a former executive at 5R Processors, was appropriately sentenced. | Proxima Studio/Shutterstock
A federal judge recently rejected an appeal by the leader of failed Wisconsin e-scrap firm 5R Processors, who is currently serving a sentence for tax crimes.
In a June 10 decision, the U.S. Court of Appeals for the Seventh Circuit affirmed the sentence of Kevin Shibilski, a former executive at 5R Processors. 5R was a longtime e-scrap processor with sites in Wisconsin and Tennessee, and in 2020 the company’s leaders were hit with numerous charges alleging they violated regulations covering the storage and transportation of CRT materials.
Shibilski, a former Wisconsin state senator, had joined the company in 2011 as a financial consultant and later took on an ownership role, according to court documents. He wasn’t initially charged along with the other executives and in fact sued his fellow executives shortly after their guilty pleas, claiming he had been duped into investing in the company. But a short time later Shibilski himself was facing similar federal charges stemming from 5R’s CRT management and tax avoidance.
Shibilski in 2022 pleaded guilty to one count of failing to pay taxes to the IRS. As part of the plea deal, prosecutors dropped the CRT storage-related charges. Sentencing “proved to be protracted,” the judges noted in the recent appeal decision, because Shibilski objected to various recommendations made by the court in its sentencing guidelines.
To resolve the objections, the judge set a two-day hearing in February 2023 where, despite Shibilski’s protestations, a judge sentenced him to 33 months in prison and three years of supervised release. The judge also ordered Shibilski to pay $100,000 in cleanup costs for the Wisconsin sites and $100,000 towards a separate cleanup effort at a former 5R site in Tennessee.
Shibilski began serving his sentence at a minimum security prison camp in Duluth, Minnesota. He then appealed the sentence, arguing in the Seventh Circuit Court of Appeals in January that the judge made procedural errors, didn’t take into account Shibilski’s acceptance of responsibility and prevented his attorney from presenting certain evidence. In a June 10 opinion authored by Chief Judge Diane Sykes, the court rejected Shibilski’s appeal, finding that the sentencing judge considered all relevant information and applied an appropriate sentence.
However, the opinion also indicated the sentencing judge was willing to take two months off the sentence, taking into account “retroactive amendments to the sentencing guidelines.” And a lawyer for Shibilski submitted a court brief in May, prior to the appeal ruling, noting that “during the pendency of his appeal, he accumulated significant good behavior credits” and was coming up for eligibility for home confinement.
Prison records currently show Shibilski is in a residential reentry management program.
Wisconsin cleanup reaches $2.2 million price tag
Meanwhile, cleanup efforts at the 5R locations played out separate from the legal drama, and the bills added up quickly. 5R had one location in Morristown, Tennessee, and a half dozen sites in Wisconsin, in the towns of Ladysmith, Glen Flora, Catawba and West Bend.
In Tennessee, the property owner for 5R’s former warehouse in 2019 paid $1.1 million to clean up e-scrap materials the processor abandoned.
In Wisconsin, cleanup efforts took place throughout 2023, according to E-Cycle Wisconsin, which detailed the project in its annual report.
Funded primarily by tax dollars allocated by state lawmakers, the cleanup occurred in two phases. In the first, from March 6 to May 5, 2023, hazardous waste collector Veolia was contracted to remove 965,000 pounds of CRT glass and mixed e-scrap from a former 5R warehouse in Glen Flora and from nine trailers in Ladysmith.
Then, from June 12 through Sept. 14, 2023, cleanup crews focused on 5R’s former location in Catawba. There they removed 490,000 pounds of CRT glass, 261,000 pounds of mixed e-scrap and 183,000 pounds of plastic.
To date, the Wisconsin cleanups cost nearly $2.2 million, with $100,000 coming from restitution from the former executives and the remainder coming from public funds.
A Wisconsin Department of Natural Resources spokesperson previously stated the public funds were able to be used because the properties were owned by public entities, in some cases through foreclosure processes. The West Bend facility was privately owned as of 2023, and its cleanup status is unclear.