updated 3/22/2007 4:28:29 PM ET 2007-03-22T20:28:29

Twelve whistleblowing crew members each were awarded $437,500 Wednesday as part of a $37 million settlement, the largest ever, involving deliberate ocean pollution from ships.

U.S. District Judge Reginald Lindsay agreed to the awards and imposed the sentence Wednesday in a plea agreement reached in December between Overseas Shipholding Group Inc. and federal prosecutors. OSG must pay $27 million for violations in Boston, Portland, Maine, Los Angeles, San Francisco and Wilmington, N.C.

OSG, one of the world's largest publicly traded oil tanker companies, agreed to pay another $10 million in January after pleading guilty to additional charges in Beaumont, Texas. The sentence there has not yet been imposed.

The company admitted to systematically dumping hundreds of thousands of gallons sludge and waste oil into the ocean and deliberately altering logbooks to conceal the illegal discharge.

The violations came to light after the whistleblowers were outraged by the systematic dumping, prosecutors said. In one case, a fitter allegedly was threatened with firing if he did not make a bypass pipe to facilitate the polluting. He responded by keeping a secret record of the dates of the oil discharges, prosecutors said.

Another whistleblower, a second engineer, called a Coast Guard hot line to report that ship officers were "tricking" an oil sensor by flushing it with fresh water.

"There should be no tolerance for those who deliberately despoil the environment," Lindsay said during the sentencing. The charges covered a pattern of actions stretching over five years, from 2001 to 2006.

OSG operations head Robert Johnston expressed regret on behalf of the company.

"What transpired is not in line with our company's core values and I want to assure you that we are working very hard to ensure this never happens again," he said in a statement he read in court.

The plea agreements in Boston and Texas require OSG to serve probation for three years, during which a federal monitor and outside auditing group will track the shipper's activities.

U.S. Attorney Michael Sullivan's office said the money collected from OSG will be divided among the districts affected by the dumping. At least $9 million will be earmarked to fund marine environmental projects.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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