Showing posts with label ALLEGED MONEY LAUNDERING. Show all posts
Showing posts with label ALLEGED MONEY LAUNDERING. Show all posts

Monday, June 23, 2014

TEXAS MAN CHARGED FOR ROLE IN BIOFUELS FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Thursday, June 19, 2014
Houston Man Charged with Biofuels Fraud Scheme

A federal grand jury in Houston, Texas, today indicted Philip Joseph Rivkin, a/k/a Felipe Poitan Arriaga, for offenses involving a federal renewable fuel program that allegedly netted him more than $29 million, the Justice Department’s Environment and Natural Resources Division announced.   The 68-count indictment against Rivkin, 49, of Houston and most recently, Guatemala City, Guatemala, includes allegations of wire fraud, mail fraud, Clean Air Act false statements, and money laundering.

The indictment was unsealed late Thursday following Rivkin’s initial appearance in federal court in Houston.   He was arrested on Wednesday evening when he arrived in Houston from Guatemala, which had deported him earlier in the day after learning that he had fraudulently secured Guatemalan citizenship.

The Energy Independence and Security Act of 2007 created or extended several federally-funded programs that created monetary incentives for the production of renewable fuels, including biodiesel, and to encourage the use of such fuels in the United States.   Authorized biodiesel producers and importers could generate and attach credits—known as “renewable identification numbers” or “RINs”—to biodiesel they produced or imported.    Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value.

The indictment alleges that beginning around February of 2009, Rivkin operated and controlled several companies in the fuel and biodiesel industries, including Green Diesel LLC, Fuel Streamers Inc., and Petro Constructors LLC, all based in Houston.  It is alleged that Rivkin claimed to produce millions of gallons of biodiesel at the Green Diesel’s Houston facility and then generated and sold RINs based upon this claim. In reality, no biodiesel was ever produced at the Green Diesel facility.  The indictment alleges that this scheme allowed the defendant to generate approximately 45 million RINs that were fraudulent, which were then sold to companies that needed to obtain them and resulted in millions of dollars in sales.   Rivkin is also alleged to have caused fraudulent tax credit claims based on fictitious biodiesel production.

The indictment goes on to allege that the defendant created false records and made false statements to conceal his fraudulent claims of biodiesel production, importation and RIN generation.   Finally, the indictment alleges that the defendant laundered the proceeds of his crimes, using banking institutions and complex financial transactions to benefit from the illegal funds he received, and to attempt to protect these funds from government enforcement.  The indictment includes a notice of forfeiture to include: cash in excess of $29 million; three vehicles including a Lamborghini, Maserati, and a Bentley; a Canadair LTD airplane; and millions of dollars worth of artwork that was previously seized from Rivkin in 2012 and is now included in  a civil action for forfeiture.

An indictment is only a charge and is not evidence of guilt.   All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

The collaborative investigation that led to today’s indictment and yesterday’s arrest was the result of work by EPA’s Criminal Investigation Division, the United States Secret Service, Internal Revenue Service Criminal Investigation, and Homeland Security Investigations.  The Guatemalan Special Investigations Unit worked with federal investigators to uncover the fraudulent nature of Rivkin’s Guatemalan citizenship, which led to his deportation back to the United States.

The case is being prosecuted by Trial Attorney Leslie E. Lehnert of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.

Tuesday, October 16, 2012

TWO CHARGED WITH DEFRAUDING COMPANY USING FALSE INVOICES

FROM: U.S. DEPARTMENT OF JUSTICE

Former COO of Louisiana Construction Management Company and Brother-In-Law Charged in Fraud Scheme

Former COO Sentenced Yesterday to 60 Months in Prison for Role in Related Scheme

WASHINGTON – Mark J. Titus, former Chief Operations Officer of Garner Services Ltd. (GSL), and his brother-in-law Dominick Fazzio, have been charged in a second superseding indictment returned today by a federal grand jury in New Orleans for defrauding GSL of over $1 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

The 32-count indictment returned today in U.S. District Court in New Orleans charges Titus and Fazzio with conspiracy, mail fraud, wire fraud, money laundering and tax charges for participating in the fraud scheme. Fazzio has also been charged with a separate tax fraud scheme.

According to the second superseding indictment, between approximately May 2008 and approximately May 2011, Titus and Fazzio defrauded GSL, a construction management company based in Pascagoula, Miss., by creating and submitting fraudulent invoices for services never rendered on construction projects managed by GSL, causing payments to be made from GSL to two companies owned by Fazzio. The two defendants then allegedly laundered the money by engaging in a series of financial transactions for the purpose of concealing the illegal nature of the payments. According to the second superseding indictment, Titus and Fazzio also submitted false tax returns by improperly deducting the disbursement of their fraudulently obtained money as legitimate business activity and failing to report the money received from the fraud scheme as taxable income.

In addition, Fazzio is charged in connection with a tax fraud scheme perpetrated with Hendrikus Ton, the owner of Abe’s Boat Rentals in Belle Chase, La., and two other companies that provide services to offshore oil production facilities. Fazzio and Ton allegedly conspired to under-report income paid to employees of Ton’s by transferring taxable income from Abe's Boat Rentals to a dormant company, improperly deducting that money as legitimate business activity and using that money to pay employees of Abe’s Boat Rentals in order to conceal the actual amount of income paid to the employees, thereby reducing the tax liability of Ton’s companies by over $3.5 million. According to the second superseding indictment, Fazzio prepared the tax returns for Ton’s companies and willfully omitted wages paid out of the dormant company.

In October 2011, Titus pleaded guilty to one count of conspiracy to commit mail fraud, arising from his role in a fraud scheme allegedly related to the scheme set forth in the second superseding indictment returned today. Last month, Titus moved to withdraw his October 2011 guilty plea, but the request was denied yesterday by U.S. District Judge Ivan Lemelle in the Eastern District of Louisiana, and sentencing proceeded yesterday as scheduled. U.S. District Judge Lemelle sentenced Titus yesterday to 60 months in prison on his guilty plea. Judge Lemelle also sentenced Titus to pay a $100,000 fine and ordered Titus to pay $925,320 in restitution to GSL.

An indictment is merely a charge and is not evidence of guilt. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The case is being prosecuted by Deputy Chief Peter Koski and Trial Attorneys Brian Lichter and Menaka Kalaskar of the Criminal Division’s Public Integrity Section, as well as Assistant U.S. Attorney Gregory Kennedy of the Eastern District of Louisiana. The case is being investigated by the FBI and the New Orleans Office of the Internal Revenue Service-Criminal Investigation Division

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