Three brothers, one a resident of North Webster, have pleaded guilty to participating in a biofuels scam that federal investigators are calling “one of the largest tax and securities fraud schemes in Indiana history.”
Chad Ducey, 39, Fishers entered a guilty plea Tuesday and his two brothers, Chris Ducey, 48, North Webster, and Craig Ducey, 44, Fishers, pleaded guilty last week for their roles in fraudulently selling $145 million in biofuel to claim federal energy incentives, the U.S. Attorney’s Office announced Wednesday morning. This was a multi-state scheme.
The trio pleaded guilty to conspiracy, making false claims against the Internal Revenue Service, wire fraud and lying to the Environmental Protection Agency and the IRS.
The brothers face up to 20 years in prison and large fines on some of the charges, and will be required to provide restitution to their victims, who include U.S. taxpayers, truck stop companies, fuel traders and others.
Craig Ducey also pleaded guilty to a related $58.9 million securities fraud, which investigators say victimized more than 625 investors and shareholders of Imperial Petroleum, a publicly-traded company and the parent company of E-Biofuels LLC in Middletown.
Investigators say E-Biofuels, operated by the Ducey brothers, sold truck stops and service stations 35 million gallons of fuel over two years, charging prices well above what it was worth. The Ducey brothers claimed it was pure biofuel they made from renewables such as animal fats and vegetable oils.
Properly manufactured biodiesel was eligible for a $1-per-gallon tax credit and other incentives. The Duceys collected those incentives by claiming E-Biofuels manufactured the fuel.
The fuel, however, was an altered biofuel obtained from co-conspirators in New Jersey that had already been used to claim federal renewable energy incentives.
Investigators say those involved in the scam realized more than $55 million in gross profit from the fuel sales.
All of the co-conspirators will have to forfeit $7.5 million in seized funds as well as jewelry, artwork, cars and homes they purchased with funds obtained through the scheme.
(The information was obtained from today’s Indianapolis Business Journal)