Calif. man to serve 51 months in prison for renewable fuel fraud

By U.S. Department of Justice | April 24, 2018

Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney Joseph H. Harrington for the Eastern District of Washington, announced that Jin Chul “Jacob” Cha, 41, of Tustin, California, who pleaded guilty on Jan. 11 to conspiracy to defraud the government and conspiracy to commit wire fraud was sentenced April 20. U.S. District Judge Salvador Mendoza Jr. imposed a 51-month prison term to be followed by a three-year term of court supervision after he is released from prison. 

According to information disclosed during the court proceedings, Cha 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, Washington. Between October 2012 and March 2015, Cha and his co-conspirators falsely claimed the production of more than 9.4 million marketable renewable energy credits, which they then sold for more than $6 million, and filed false claims with the IRS for $2.5 million in excise credit refunds. Throughout this period, much of the renewable fuel claimed to be produced at the Gen-X facilities was either not produced or reprocessed multiple times.

“The defendant, Mr. Cha, has been sentenced to spend years in prison for his role in a multimillion dollar conspiracy to defraud the renewable fuels program,” said Wood. “This prosecution, which is part of a broader effort involving the Gen-X Energy Group, shows there are serious consequences for this kind of fraudulent conduct. I applaud the work of the federal, state and local law enforcement personnel involved in bringing down this criminal enterprise.”

“I commend the tenacious and thorough efforts of investigators from IRS-Criminal Investigation and the U.S. EPA’s Criminal Investigation Division,” Harrington said. “The U.S. Attorney’s Office will continue to work closely with our law enforcement partners to aggressively prosecute fraud and other white collar crimes in the Eastern District of Washington.”

“The defendant defrauded taxpayers and biofuels companies out of millions of dollars,” said Assistant Administrator Susan Bodine for EPA’s Office of Enforcement and Compliance Assurance. “This case shows that EPA and its law enforcement partners will prosecute those who seek to profit by breaking the law.”

“Today, Mr. Cha and the Gen-X Energy Group are being held accountable for their massive and complex $65 million fraud,” said Special Agent in Charge Darrell Waldon of IRS Criminal Investigation. “Along with our law enforcement partners, IRS Criminal Investigation will continue to vigorously investigate and prosecute white collar criminals who pursue illegal schemes to steal from the U.S. taxpayer.”

This investigation was conducted by the Internal Revenue Service Criminal Investigations, the EPA’s Criminal Investigation Division, and the U.S. Secret Service, with assistance from the Washington State Patrol and the Los Angeles Port Police Department’s Hazardous Materials Investigations Unit. The case was prosecuted by Trial Attorneys Adam Cullman and Thomas Franzinger for the Justice Department’s Environmental Crimes Section, Assistant U.S. Attorney Scott T. Jones for the Eastern District of Washington, and EPA Regional Criminal Enforcement Counsel and Special Assistant U.S. Attorney Karla G. Perrin for the Eastern District of Washington.

 
 
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