US man goes to prison for biodiesel tax fraud scheme

A Washington man was sentenced this week for laundering more than $39 million for a company that bilked federal programs supporting renewable energy, according to Tri-City Herald.

Richard Estes, 77, was part of a conspiracy involving Pasco-based Gen-X Energy Group.

US District Court Judge Salvador Mendoza, Jr. sentenced him to eight years and nine months in prison after Estes previously pleaded guilty to conspiracy to commit money laundering, according to the news report.

According to Tri-City Herald, along with the prison sentence, Estes is responsible for paying more than $4.3 million (€4m) in restitution.

Federal prosecutors claimed Estes and others nationwide set up shell companies across the nation to take advantage of tax credits offered by the Internal Revenue Service.

The companies cycled the same batch of biofuels through each of the companies, according to the US Attorney’s Office in Florida. Each time a new company received the product, it would claim to have made new biofuels.

Gen-X Energy Group started making headlines in the Tri-Cities after it rented a 18,000-square-foot biodiesel facility in Burbank in 2007.

A suspicious fire damaged the facility in 2009, closing the plant for several months before it announced plans to open a plant in Richland.

The company claimed the plant’s new technology used far less energy than a traditional biorefinery plant by reusing heat produced during processing. The company even received a $720,000 American Recovery and Reinvestment Act grant to build the refinery, though it was never built.

Prior to the conspiracy being discovered, company officials claimed they generated 15 million gallons of biodiesel a year by using various new and used vegetable oils.

The company also claimed to have a biodiesel production unit in Moses Lake, and until as late as October 2015 appeared to be active, the news report stated.