FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY RENEWABLE
Bio-diesel Fuel Company Owner Sentenced to 188 Months in Federal Prison for Crimes Connected to Illegal Fuels Scheme
Jeffrey Gunselman also fined $175,000 and ordered to pay nearly $55 million in restitution
WASHINGTON — Jeffrey David Gunselman, 30, was sentenced today by U.S. District Judge Sam R. Cummings to 188 months in federal prison, fined $175,000 and ordered to pay more than $54.9 million in restitution, following his guilty plea in December 2012 to an indictment charging 51 counts of wire fraud, 24 counts of money laundering and four counts of making false statements in violation of the Clean Air Act.
"Today’s sentence is the second significant penalty against an alleged bio-diesel producer who in fact produced no fuel at all," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "These cases demonstrate that EPA and our law enforcement partners have and will catch criminals who defraud federal programs and the American people by falsely selling renewable fuel credits."
"I commend the excellent investigative work done by special agents and investigators with EPA’s Criminal Investigation Division and the U.S. Secret Service in this complex fraud case," said U.S. Attorney Sarah R. Saldaña.
Gunselman admitted that from September 2010 to October 2011, he devised a scheme to defraud the Environmental Protection Agency (EPA) by falsely representing that he was in the business of producing bio-diesel fuel, yet Gunselman did not have a bio-diesel fuel-producing facility. Instead, Gunselman’s business operation consisted of falsely generating renewable fuel credits and selling them to oil companies and brokers. He instructed purchasers to wire payments to a bank account he solely controlled, and as a result, approximately $41,762,236 was deposited into that account.
Gunselman was the owner of Absolute Fuels, LLC, dba Absolute Fuels, LLC (Absolute Fuels), which he formed in April 2009. He was also named as Governing Person and/or as Registered Agent for other business entities associated with Absolute Fuels, LLC, including Absolute Fuels, LLC; Absolute Milling, LLC; Ellipse Energy, LLC; 21 Investments, LLC; and YGOG Holdings, LLC. However, Gunselman admitted that these entities are solely alter egos of himself, as an individual, as he alone owns, manages, directs and controls each of them and each has no separate and distinct existence from him.
From September 2010 to mid-October 2011, Gunselman conducted 51 fraudulent transactions, which were transmitted by wire communications, that represented to the EPA that bio-diesel fuel had been produced at the Absolute Fuels facility in Anton, Texas, when in fact, no bio-diesel fuel had been produced. This ultimately resulted in Gunselman requesting and receiving payments, by electronic funds transfer, of approximately $41,762,236.
During the same time period, Gunselman engaged in monetary transactions in criminally derived property by purchasing real and personal property valued at approximately $12 million with the funds derived from the wire fraud. Included in that property are: several vehicles, including a Bentley, Mercedes-Benz, Lexus, Cadillac and Shelby Cobra; a Patton Military Tank; a Gulfstream airplane, professional basketball season tickets and corporate sponsorship; and agricultural, business and residential real estate.
The false statements convictions stem from Gunselman making material false statements to the EPA, falsely claiming and representing that bio-diesel fuel, a renewable fuel, had been produced, generating renewable fuel credits, when Gunselman well knew that no bio-diesel fuel had been produced.
The case was investigated by the EPA Criminal Investigation Division and the U.S. Secret Service.
