Coast Guard seeks record $80,000 penalty for Chicago charter operator

Coast Guard officials in Chicago are seeking $80,000 in penalties against a Lake Michigan charter operator who they say persisted in for-hire cruises despite repeated warnings that he was violating regulations.

Robert Glick of Chicago, who owns the 37’ Sea Ray cabin cruiser Allora and the 35’ pontoon vessel Fun, operating as Offshore 312, was cited for violating three separate federal regulations for each boat while operating a business that involved transporting paying passengers.

If the Coast Guard Marine Safety Unit Chicago makes the complaints stick it would be “the largest civil penalty ever handed down by the Coast Guard to a recreational boat owner for operating as an illegal commercial passenger vessel business,” according to the Coast Guard.

The case is part of a broad enforcement crackdown on illegal charter operations in the Lake Michigan region that has brought 21 cases against vessels and actions against mariners’ credentials, said Lt. Katharine Woods, chief of the inspections division for the Chicago MSU.

The Allora, a 37' Sea Ray, was operated as an illegal charter vessel on Lake Michigan, according to Coast Guard officials. Offshore 312 photo

The Allora, a 37′ Sea Ray, was operated as an illegal charter vessel on Lake Michigan, according to Coast Guard officials. Offshore 312 photo

“We have yet to find a bareboat operator in our area who’s doing it correctly,” said Woods. They are conducting business like commercial vessels, but failing to meet regulatory requirements such as documentation, vessel inspection, stability letters and crew qualifications, she said.

Since 2015 the national Coast Guard effort to enforce charter rules has brought more scrutiny to so-called bareboat charters, where recreational vessels are available for hire and customers can hire a captain. Offshore 312 advertises its services as 12-passenger bareboat charters on Lake Michigan.

Such “12 pack” charters, on a vessel with no crew provided or specified by the owner, and less than 100 tons, may be exempted from the Coast Guard’s Small Passenger Vessel Regulations under a narrow provision in the rules.

But on Lake Michigan, “what we’re seeing is owners don’t want to relinquish control of the vessel,” who choose the captains those customers can hire, and impose restrictions on use of the vessel, said Woods. The Coast Guard has a substantial education and outreach program to the boating public on illegal charters, but the problems persist, she said.

In April 2016 Coast Guard officials heard about Offshore 312 and sent an “education letter” advising of the requirements for legal charter operations, said Woods.

But between June 2017 and June 2018 the Allora and Fun were stopped several times by Coast Guard teams and Illinois Department of Natural Resources officers who found the boats with documentation and safety violations.  The violations are a familiar list from the Coast Guard’s enforcement blitz, including operating vessels without certificates of inspection, without an alcohol and drug testing program for crew members, and failure to have vessel stability letters.

“So it was the totality of the violations that led us to enforcement action,” said Woods. Offshore 312 did not respond when contacted by WorkBoat for comment.

The Coast Guard can advise vessel operators what they need to do for running a legal passenger vessel business, “but we can’t give you the cookbook for running a bareboat charter,” said Woods.

Woods likens the difference to that between being a residential landlord, compared to the gray area between rentals and hotels where Airbnb operates – and where state and local governments are demanding the same hotel regulations for fire and safety.

“When you step out in the hallway, you see fire exits and fire extinguishers, whether it’s in a budget hotel on the highway or a four-star hotel downtown,” said Woods. “Commercial vessels are inspected in the same way.

“We’ve decided as a government since the 1860s that we need to protect people from shady boat owners who will take their money and put their lives in danger.”

A week before the Chicago action was announced, a Florida man who operated his 147’ yacht as an illegal passenger charter vessel near Miami during summer 2018 was sentenced to three years of probation, including six months of home confinement, and a criminal fine of $4,000.

Randy Postma, 71, of Davie, Fla., had been the highest-profile case in the Coast Guard Seventh District’s aggressive campaign to stop charter operators it says are violating the law. Postma’s 147’x28’9” motor yacht Golden Touch II was stopped by the Coast Guard near Miami on Aug. 19, 2018, and found to be overloaded with passengers and lacking a certificate of inspection.

The motor yacht Golden Touch II underway on Aug. 19, 2018, in the vicinity of Nixon Beach, Fla. Coast Guard photo.

The motor yacht Golden Touch II underway on Aug. 19, 2018, in the vicinity of Nixon Beach, Fla. Coast Guard photo.

Within a few days the Coast Guard issued Postma a Captain of the Port order, directing him to cease passenger vessel operations until he came into compliance with all federal laws and regulations. Despite a warning that violating the order could subject him to civil penalties and even imprisonment, the Coast Guard learned that the Golden Touch II was still being used commercially on Sept. 1.

Postma subsequently entered a guilty plea to violating the order. The U.S. Attorney’s Office for Southern Florida and the Coast Guard announced the sentence, stressing they are serious about enforcing requirements for charter operators to operate within the law.

“Those who seek to dodge federal regulations and take shortcuts by operating illegally, willfully put their passengers at risk and will be held accountable,” said Capt. Ladonn Allen, chief of the Coast Guard Seventh District Prevention Department in Miami.

About the author

Kirk Moore

Associate Editor Kirk Moore was a reporter for the Asbury Park Press for over 30 years before joining WorkBoat in 2015. He wrote several award-winning stories on marine, environmental, coastal and military issues that helped drive federal and state government policy changes. He has also been a field editor for WorkBoat’s sister publication, National Fisherman, for almost 25 years. Moore was awarded the Online News Association 2011 Knight Award for Public Service for the “Barnegat Bay Under Stress,” 2010 series that led to the New Jersey state government’s restoration plan. He lives in West Creek, N.J.

2 Comments

  1. Avatar

    Thank you fellow Coasties for being out there to make the waters safer. I understand that you may not be able to provide a “cookbook” for operating charter business but I hope there has been support for outreach in the area to let paying passengers and the operators of everyones responsibilities…. Thank you again for your service, – Fellow USCG ret

  2. Avatar

    Once again, are these crackdowns because there have been a rash of accidents or because someone didn’t fill out the right paperwork to keep the clerks at the Coast Guard busy? $80,000 seems like a bit of government over reach to put a feather in someones cap.

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