Fraudulent Biodiesel Producer Gets Prison Term
The company of a fraudulent biodiesel manufacturer has been sentenced to 188 months in federal prison, fined $175,000 and ordered to pay more than $54.9 million in restitution following a guilty plea to 51 counts of wire fraud, 24 counts of money laundering and four counts of making false statements in violation of the Clean Air Act.
Jeffrey David Gunselman, 30, admitted that from September 2010 to October 2011, he devised a scheme to defraud the Environmental Protection Agency (EPA) by falsely representing that he was in the business of producing biodiesel fuel though he did not have a biodiesel production 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, and as a result, approximately $41,762,236 was deposited into that account.
Gunselman was the owner of Absolute Fuels LLC, which he formed in April 2009. He was also named as governing person and/or as registered agent for other business entities associated with Absolute Fuels LLC, including Absolute Milling LLC, Ellipse Energy LLC, 21 Investments LLC, and YGOG Holdings LLC. Gunselman admitted that those 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.
From September 2010 to mid-October 2011, Gunselman conducted 51 fraudulent transactions, which were transmitted by wire communications, that represented to the EPA that biodiesel fuel had been produced at the Absolute Fuels facility in Anton, Texas, when no biodiesel fuel had been produced. During the same time period, Gunselman engaged in monetary transactions in criminally derived property by purchasing real and personal property valued at approximately $12 million with the funds derived from the wire fraud. Included in that property are: several vehicles, including a Bentley, Mercedes-Benz, Lexus, Cadillac and Shelby Cobra; a Patton tank; a Gulfstream airplane, professional basketball season tickets and corporate sponsorship; and agricultural, business and residential real estate.
The case was investigated by the EPA Criminal Investigation Division and the U.S. Secret Service.