EPA says owner of Absolute Fuels LLC was involved in multiple federal charges surrounding the false claim the company produced biodiesel fuel.
Jeffrey David Gunselman, the owner of Absolute Fuels LLC has been sentenced 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, according to the U.S. EPA. The company was formed in April 2009.
Gunselman 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, EPA says that Gunselman admitted that these entities were 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.
The EPA says that Gunselman admitted that from September 2010 to October 2011, he devised a scheme to defraud the EPA by falsely representing that he was in the business of producing biodiesel fuel, yet Gunselman did not have a biodiesel 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.
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 Absolute Fuels’ facility in Anton, Texas, when no bio-diesel fuel had been produced. This ultimately resulted in Gunselman requesting and receiving payments of about $41.7 million.
During the same time, Gunselman engaged in monetary transactions in criminally derived property by purchasing real and personal property valued at about $12 million with the funds derived from the wire fraud.
The case was investigated by the EPA Criminal Investigation Division and the U.S. Secret Service.
“Today’s sentence is the second significant penalty against an alleged bio-diesel producer who in fact produced no fuel at all,” says 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,” says U.S. Attorney Sarah R. Saldaña.