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Securities fraud related to biodiesel fraud scheme convicted

Staff Writer |
U.S. Attorney Josh J. Minkler for the Southern District of Indiana announced the guilty verdict after an eight-day jury trial of Jeffrey Wilson of Evansville, In.

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Wilson who was charged with securities fraud related to a massive multi-state fraud scheme

Wilson’s crimes centered on the e-biofuels biodiesel business in Middletown, Indiana, which was a wholly-owned subsidiary of Imperial Petroleum.

Wilson, CEO and president of Imperial Petroleum, was convicted in federal court before U.S. District Judge Sarah Evans Barker for the Southern District of Indiana for securities fraud, filing false reports with the Securities and Exchange Commission (SEC), falsely certifying reports to the SEC, lying to the company’s outside auditor and lying to federal investigators.

The verdict in the securities fraud was directly related to wire fraud crimes committed by Craig Ducey, Chad Ducey of Fishers, Indiana, and Chris Ducey of North Webster, Indiana; Joseph Furando and Katirina Tracy of Park Ridge, New Jersey; and Brian Carmichael of Bend, Oregon.

The Ducey brothers, Furando, Tracy and Carmichael were charged with conspiracy to commit wire fraud, tax fraud, false statements to the Environmental Protection Agency (EPA) and other crimes in a separate indictment in September 2013.

They all pleaded guilty prior to Wilson’s trial: Carmichael in September 2013, Tracy in July 2014, Furando in April 2015 and the Ducey brothers in April 2015.

The companies CIMA Green, Caravan and e-biofuels have all pleaded guilty as well. Carmichael is serving a five year prison sentence for his role in the fraud. Chris Ducey has begun a six year sentence. And Joseph Furando, the leader of the New Jersey part of the conspiracy, has been sentenced to twenty years imprisonment. The other defendants have yet to be sentenced.

The underlying fraud involved Furando and Tracy purchasing biodiesel through their New Jersey companies CIMA Green and Caravan Trading. The conspirators knew that this biodiesel had already been used to claim tax credits and an EPA credit associated with renewable fuel, known as a “renewable identification number” (RIN).

Furando and Tracy would sell this biodiesel to Carmichael and the Ducey brothers, who used the e-biofuels facility in Middletown, Indiana, to pretend to manufacture what they had bought and then illegally reassigned the tax credit and the RIN.

On average, the conspirators added in excess of $1.60 per gallon for doing nothing to the biodiesel other than move it around.

All told, the underlying fraud involved more than $140 million in revenue and $56 million in criminal profits.

The securities fraud case tried over the last eight days involved over $20 million in loss to investors and a $25 million attempted fraud that was foiled by a due diligence team inspecting the e-biofuels facility.

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