75 year old Donald Holmes of Westport was sentenced on Wednesday for Conspiracy to Defraud the Government and Conspiracy to Commit Wire Fraud.
The United States Attorney’s Office announced that Holmes previously pled guilty on November 23, 2015, and District Judge Salvador Mendoza, Jr. sentenced Holmes to 78-months in federal prison and three years supervision after he is released.
In addition, Judge Mendoza ordered Holmes to pay $9,517,412.50 in restitution to taxpayers and an additional $6,175,929.17 in restitution to the victims of his fraud.
According to a release, the crimes were related to the Energy Independence and Security Act of 2007, which required the EPA and IRS to encourage the production and use of renewable fuel in the United States.
Agencies administered tax credits to ensure an increase in the amount of renewable fuel, allowing companies to purchase renewable energy credits from fuel producers.
According to court proceedings, Holmes was a member of a conspiracy involving Gen-X Energy Group, Inc. (Gen-X), a renewable energy company formerly located in Pasco and Moses Lake.
Between October of 2012 and April of 2015, Holmes and his co-conspirators falsely claimed they produced more than 72,000,000 marketable renewable energy credits, which they then sold for more than $57,000,000, and filed false claims with the IRS for $9,517, 412.50 in excise credit refunds.
Prosecutors found that much of the renewable fuel claimed to be produced by Gen-X was either not produced or re-processed multiple times.
Acting United States Attorney Harrington stated, “The United States Attorney’s Office for the Eastern District of Washington is, and will continue to be, committed to prosecuting aggressively and seeking appropriate punishment for white collar crimes. The prison term imposed and the amount of restitution ordered reflect the seriousness of Holmes’ criminal conduct. I commend the tenacious and thorough efforts of the Environmental Protection Agency’s Criminal Investigation Division and the IRS-Criminal Investigation.”
“American taxpayers and the biofuels industry were defrauded $65 million as a result of this massive and elaborate scheme,” said EPA Administrator Scott Pruitt. “EPA is committed to working with its law enforcement partners to prosecute those who blatantly disregard the law.”
“The IRS, along with our law enforcement partners, vigorously pursue corporate officers who commit fraud and violate the public trust,” said Assistant Special Agent in Charge Troy Burrus of IRS Criminal Investigation. “Mr. Holmes sentence today sends a clear message that the government is committed to investigate and prosecute those who violate our tax laws.”
This investigation was conducted by the Internal Revenue Service-Criminal Investigation, the Environmental Protection Agency’s Criminal Investigation Division, and the United States Secret Service, with assistance from the Washington State Patrol.
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