Former biodiesel CEO gets 10 years in prison for fraud

Source: Amanda Reilly, E&E News reporter • Posted: Wednesday, December 7, 2016

A federal court sentenced a former CEO of an Indiana biodiesel company Friday to 10 years in prison for his role in a massive fraud scheme that bilked investors and generated $56 million in criminal profit.

Jeffrey Wilson of Evansville, former CEO of Imperial Biodiesel, was convicted last July after an eight-day trial in the U.S. District Court for the Southern District of Indiana.

Along with sentencing Wilson, the court last week also sentenced Indiana brothers Chad and Craig Ducey to 84 months and 74 months, respectively, for their roles in the scheme. Three other participants are already currently serving prison sentences ranging from five to 20 years, while a seventh conspirator faces up to five years.

In 2013, Indiana officials called the scheme involving Wilson and the six others the state’s largest case of tax and securities fraud.

According to the Justice Department, companies in Indiana purchased biodiesel through two New Jersey companies. Biodiesel is a renewable fuel made from used cooking grease and soybean oil.

The Indiana companies then pretended to manufacture the biodiesel themselves in order to claim more tax incentives and federal renewable fuel credits known as Renewable Identification Numbers, or RINs.

Wilson entered the scheme in 2010, according to DOJ, when Imperial Petroleum purchased e-Biofuels LLC, one of the companies that received biodiesel from New Jersey, from the Ducey brothers.

When Wilson learned about the fraud either shortly before or after the purchase, he tried to cover it up by filing reports containing false information to the Securities and Exchange Commission. DOJ says Wilson’s actions resulted in a $20 million loss for investors.

The jury in July found Wilson guilty of securities fraud for his part in trying to hide the scheme from federal regulators. The jury also found that Wilson lied to an outside auditor and federal investigators.

Wilson had asked for leniency in sentencing. Last Monday, he told the court he was a cancer survivor and that his imprisonment would have an “extraordinary impact” on his friends and family.

The government, on the other hand, had argued for a steep penalty. Along with serving time in prison, the court also required Wilson to pay $16 million in restitution.