|George Bush and Ducey bros., 2007|
Image caption: ". The brothers have pleaded guilty to their role in a multimillion-dollar biodiesel fraud scheme. (Photo: Photo provided) Indianapolis Star, 4/29/2015
4/29/2015, "3 Indiana brothers plead guilty in biofuels fraud," AP via WISH TV, Indianapolis
"Brothers Chad, Chris and Craig Ducey all pleaded guilty to running the company E-biofuels LLC. The brothers resold biodiesel and then accepted federal tax incentives as if they had produced the fuel. Authorities say they had been doing for years....
The brothers would take what’s known as Renewable Identification Number and make new RINs after they bought biofuel from another producer. Craig Hatfield is the Quality Control Manager for Integrity Biofuels in Morristown, and says RINs are an important way to track the biofuel....
The government gives incentives to companies in order to help create energy independence. A former employee of E-biofuels spoke out against the brothers, which led investigators to the fraud."...
4/29/2015, "3 Indiana brothers plead guilty in biofuels fraud," AP via Huffington Post, Indianapolis
"Three Indiana brothers have pleaded guilty in a biofuels scam that bilked taxpayers and fuel buyers out of tens of millions of dollars, federal prosecutors said Wednesday.
Chad Ducey, 39, of Fishers, pleaded guilty Tuesday in U.S. District Court in Indianapolis to conspiracy, wire fraud and other charges. His brothers, Chris Ducey, 48, of North Webster; and Craig Ducey, 44, of Fishers, had pleaded guilty to the same charges late last week, prosecutors said.
The trio, who had faced a May trial, operated E-biofuels LLC from a central Indiana biofuels plant.
Craig Ducey also pleaded guilty to a related $58.9 million securities fraud scheme that prosecutors said bilked more than 600 investors and shareholders of E-biofuels' parent company, Imperial Petroleum.
The brothers sold more than 35 million gallons of biodiesel to customers in several states in the Midwest, South and East Coast, charging prices well above what it was worth by claiming it was pure biofuel made from renewables such as vegetable oils, prosecutors said. But that fuel actually contained some petroleum diesel, and during the scheme, the government paid out renewable energy tax credits and other benefits that should not have been paid because it wasn't pure biofuel.
Prosecutors said the brothers, their co-conspirators and their companies saw more than $55 million in gross profits in the scam, at the expense of customers and U.S. taxpayers.
Earlier this month, a New Jersey man also pleaded guilty in the scam, which prosecutors said is one of the largest frauds in Indiana history.
Joseph Furando of Montvale, New Jersey, pleaded guilty to all of the charges he faced, including conspiracy, wire fraud, lying to investigators and money laundering. Guilty pleas were also entered on behalf of Caravan Trading Co. and CIMA Green — two companies that Furando, 49, co-owns.
"There are opportunities in Indiana for innovators in agriculture and biofuels," U.S. Attorney Josh Minkler said. "The Duceys and their co-conspirators in New Jersey undercut those opportunities by exchanging greed and fraud for innovation."
Under his plea, Furando has agreed to pay full restitution to his victims and forfeit real estate, sports cars — including a Ferrari he bought for $247,000 — jewelry, a piano, artwork and other luxury items he bought with proceeds.
Prosecutors said the E-biofuels plant in Middletown (Ind.) could produce biodiesel, a renewable fuel, from animal fats and vegetable oils, but that between the fall of 2009 and the summer of 2011, its production equipment was hardly used. E-biofuels instead purchased biodiesel from Furando and sold it as its own as pure biofuel, allowing the defendants to illegally claim tax credits and other benefits, prosecutors said." via Free Rep.
Citation for Ducey's $25,000 donation to NRCC in 2007:
9/18/2013, "Ducey Brothers And Others Use Subsidized Biofuel Industry As A Scheme To Defraud Taxpayers and Investors," Gary R. Welsh, advanceIndiana.blogspot.com
U.S. Attorney Joe Hogsett announced charges today against three brothers and a handful of other charlatans who allegedly used the cover of operating a biodiesel plant that was supposed to be making diesel fuel from animal fat and vegetable oils to defraud the government and investors. Three brothers, Chad, Chris and Craig Ducey, along with Brian Carmichael used E-Biofuels in Middletown, Indiana as a front company to defraud taxpayers and investors out of more than $100 million through a series of criminal acts, including wire fraud, tax fraud, money laundering, securities fraud and making false statement under the federal Clean Air Act. Hogsett claims the case against those charged represents the largest tax and securities fraud claim in Indiana history.
What enticed the accused into committing their crimes, 88 charges in total, is a federally-funded program under the Energy Independence and Security Act of 2007, which provides valuable tax credits to persons who manufacture pure biodiesel to blend with petroleum diesel. The Ducey brothers and Carmichael are accused of conspiring with a New Jersey couple, Joseph Furando and Evelyn Katirina Pattison, who would purchase biodiesel fuel from third parties and then fraudulently resell it as pure biodiesel with the available tax credit. Although E-Biofuels had a refinery in Henry County where it could produce its own biodiesel fuel, it produced no fuel. Instead, it operated as a pass-through facility for fuel purchased elsewhere.
The government claims E-Biofuels delivered mislabeled fuel to customers in one of three ways. In some cases, it transported the fuel from fuel terminals to its facility in Middletown where it was unloaded into a holding tank. It would then be reloaded into tanker trucks and delivered to unsuspecting customers with paperwork that fraudulently identified it as pure biodiesel fuel. In other cases, it simply flipped a load by picking up the paperwork at the facility without unloading it and delivering it as pure biodiesel fuel. In the most egregious circumstance, it delivered so-called phantom loads directly to customers from fuel terminals to customers. The customers were paying an inflated price for fuel they believed was pure biodiesel fuel.
According to the government, the principals of E-Biofuels sold their company to Evansville-based Imperial Petroleum in 2010, which knowingly perpetuated the fraud. Imperial Petroleum's president, Jeffrey Wilson, was included in today's indictments. The principals are accused of hiding from investors, outside auditors and shareholders the fact that they were purchasing biodiesel fuel from third parties rather than producing their own from animal fat and other feedstocks as they were representing. The principals pocketed $35 million in tax credits before the company filed for bankruptcy in April, 2012. The six face up to 20 years in prison if found guilty of the charges. Carmichael has agreed to plead guilty to one charge in exchange for his cooperation in order to receive a sentence of up to five years in prison. Prosecutors claim the charged individuals paid themselves large salaries, took lavish gambling trips to Las Vegas, and purchased expensive artwork, jewelry and automobiles.
According to campaign finance records, Craig Ducey, a Fishers resident, contributed over $25,000 to the National Republican Congressional Committee when he first prepared to launch E-Biofuels in 2007. His brother Chad, also a Fishers resident, contributed over $700 to the campaign committee of former Gov. Mitch Daniels. Chad and Craig also co-founded 8CD, LLC, a business that breeds bulls for use in rodeo bull riding competitions. The photo below from the company's website shows Chad and Craig with their families and business partner, Jim Carrigan. Chad Ducey also is part of the leadership team of a local beer brewery, Scarlett Lane Brewing Company, in Fishers with several others, including his wife, Monica."
4/29/2015, "Indiana brothers admit to $145 million biofuel scheme," Indianapolis Star, Madeline Buckley
"Officials blasted the brothers for taking advantage of federal programs meant to promote environmentally friendly practices.
"This kind of criminal activity has real consequences, including undermining a law that reduces our impact on climate change," said Cynthia Giles, an assistant administrator for the Environmental Protection Agency."...