Employees of a phony biofuel company dumped hazardous waste at multiple sites around the Houston, Texas, area and made $20 million by faking renewable fuels before going to prison, according to a federal watchdog.
A federal judge in Columbus, Ohio, recently sentenced New Energy Fuels owner Dean Daniels, company officer William Bradley, and employees Brenda Daniels and Richard Smith to between 12 and 63 months behind bars for conspiring to defraud the United States. Owner Dean Daniels will serve the longest sentence for also illegally dumping waste in 13 locations around Houston, including storm drains and ponds.
NEF employees bought low-grade feedstock and barely processed it to produce a low-quality fuel, telling the Environmental Protection Agency they created biodiesel. They then attached fraudulent serial numbers to their fuel batches, and sold more than $15 million worth.
They also fraudulently claimed $7 million in biodiesel tax credits from the IRS, according to the Department of Justice. EPA incentivized biodiesel creation by offering companies a $1 tax credit per gallon produced.
NEF relocated from Texas to Ohio under the name Chieftan Biofuels after the Houston Police Department’s Environmental Investigations Unit discovered the company was illegally dumping hazardous waste in August 2011.
“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent and to move our energy economy into the 21st century,” said Assistant Attorney General Cruden.
“The fraud perpetrated by the defendants threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like this one.”
The four white-collar criminals will spend 36 months in supervised release after they leave prison, and pay the federal government $23 million in restitution.
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