Jury finds Keystone Biofuels owners guilty of fraud, false claims

By U.S. Department of Justice | April 25, 2019

Following a 14-day jury trial in Harrisburg, Pennsylvania, Ben T. Wootton, of Enola, Pennsylvania, and Race A. Miner, of Buena Vista, Colorado, were found guilty of one count of conspiracy to make false statements to the U.S. EPA, six counts of making false statements to the EPA, one count of conspiracy to defraud the Internal Revenue Service, and one count of aiding and assisting in the filing of a false claim with the IRS. The jury also found the corporation, Keystone Biofuels Inc., guilty of conspiring to make false statements to the EPA and six counts of making false statements to the EPA. 

According to the evidence presented at trial, Wootton and Miner co-owned and operated Keystone, originally in Shiremanstown, Pennsylvania, and later in Camp Hill, Pennsylvania. Keystone purported to be a producer and seller of biodiesel. From August 2009 through September 2013, Wootton and Miner participated in a conspiracy to fraudulently generate renewable fuel credits, identified by renewable identification numbers (RINs) on Keystone fuel and, through January 2012, to fraudulently claim tax refunds based on the Biodiesel Mixture Tax Credit, a federal excise tax credit for persons or businesses who mix biodiesel with petroleum and use or sell the mixture as a fuel.

“Abuse of biodiesel fuel credits harms law abiding renewable fuel producers and the U.S. government,” said Principal Deputy Assistant Attorney General Zuckerman.

“The defendants in this case participated in a criminal scheme that struck directly at the heart of a government program that was created to benefit both honest business owners and the community at large by encouraging the development and use of clean biodiesel fuel,” said U.S. Attorney David J. Freed.  “Instead, the defendants defrauded their fellow citizens to the tune of more than $4 million. Working with our partners, we will not rest in pursuing cases that target our shared financial resources.”

According to evidence presented at trial, as part of the conspiracy, Wootton and Miner caused inflated fuel amounts to be reported to the IRS. The inflated fuel numbers supported their fraudulent claims for tax refunds on fuel Keystone was not producing. To account for the inflated fuel amounts, Wootton and Miner created false books and records and engaged in a series of sham financial transactions intended to mirror the false books and records. In addition, Miner doctored fuel samples and test results to fraudulently claim tax refunds and RINs on fuel that did not meet the requisite quality standards to qualify for the tax refunds and RINs. It is estimated that more than $10 million was generated from the fraudulent RIN sales, and the total tax loss to the government resulting from the defendants’ conduct is more than $4 million.

Wootton and Miner face a statutory maximum sentence of five years in prison on each conspiracy count, each false statement to the EPA count, and three years in prison on the count of filing a false tax claim with the IRS, as well as periods of supervised release, restitution and monetary penalties.

 

 
 
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