North Webster Residents Among Those Charged in Biofuels Scam
July 28, 2016 at 4:25 p.m.
By Siara [email protected]
Brothers Craig, Chris and Chad Ducey along with their company, E-Biofuels, Middletown, face charges of conspiracy, wire fraud, obstruction of justice and engaging in prohibited financial transactions with criminal proceeds. A plea agreement for Craig Ducey was filed April 20 and he is set to stand trial May 11. The Duceys could face a sentence of 20 years in prison and pay fines and restitution for their numerous counts.
Other defendants named in the federal case are Joseph Furando and Evelyn Katirina Pattison as well as the New Jersey companies they own, Caravan Trading Co. LLC and Cima Green LLC. Craig Ducey lives in Fishers but owns a summer property at 32 EMS W30B Lane, North Webster; Chris Ducey resides at 40 EMS W30B Lane, North Webster; and Chad Ducey is a resident of Fishers.
Around November 2009, the Duceys and E-Biofuels purchased from Caravan Trading and Cima Green more than 35 million gallons of fuel and sold the same amount under the claim it was B100, or pure biofuel, that they had produced. The fuel was really B99, which is biofuel blended with petroleum, according to court documents filed in Southern District federal court in Indianapolis in September 2013.
The fraudulent sale made a $55 million profit; in addition, claiming the B99 biodiesel as B100 exposed the IRS to as much as $35 million in false claims, according to the court filing.
The company occasionally bought and processed legitimate feedstock to give customers and outsiders the false impression that biodiesel was regularly produced at the facility, the filing states.
The Ducey’s said their biodiesel was “100 percent agri-biodiesel (derived solely from virgin oils)” when they knew this was false, according to court documents. The scheme was carried out from July 2009 to May 2012.
False statements from the company’s 2011 annual report include: “We produce our biodiesel from a wide variety of feed stocks including soy oil, inedible animal fat, used cooking oil and inedible corn oil” and “We generally sell B100 to our customers.”
The report did not state that the biodiesel being sold had been fully or partially produced by someone else. They would also use false paperwork with their customers and follow-up with false invoices, according to court documents.
E-Biofuels was founded in 2006 and operates a production plant that can process animal fats and vegetable oils into renewable fuel, through a process called transesterification. Craig Ducey was the president of the company, Chad Ducey was the chief operating officer and Chris Ducey worked as the logistics manager.
In 2010 Imperial Petroleum Inc. purchased E-Biofuels, but the brothers continued to serve as paid officers, managers and consultants. Jeffrey Wilson, Evansville, served as the president and chief executive officer of Imperial Petroleum and continued with the scam from early 2010 until the end of 2011. Wilson is also facing charges in a separate case alongside Craig Ducey.
Wilson and the Ducey brothers knew E-Biofuels was purchasing and reselling biodiesel instead of producing its own fuel from virgin feedstocks, according to the filing for that case. They were also falsely representing the company to investors, shareholders and auditors.
In the summer of 2011, Craig Ducey and Wilson defrauded a hedge fund investor, according to the filing. They tried convincing a company to invest in Imperial securities and provided annual and quarterly reports with false statements and omissions.[[In-content Ad]]
Brothers Craig, Chris and Chad Ducey along with their company, E-Biofuels, Middletown, face charges of conspiracy, wire fraud, obstruction of justice and engaging in prohibited financial transactions with criminal proceeds. A plea agreement for Craig Ducey was filed April 20 and he is set to stand trial May 11. The Duceys could face a sentence of 20 years in prison and pay fines and restitution for their numerous counts.
Other defendants named in the federal case are Joseph Furando and Evelyn Katirina Pattison as well as the New Jersey companies they own, Caravan Trading Co. LLC and Cima Green LLC. Craig Ducey lives in Fishers but owns a summer property at 32 EMS W30B Lane, North Webster; Chris Ducey resides at 40 EMS W30B Lane, North Webster; and Chad Ducey is a resident of Fishers.
Around November 2009, the Duceys and E-Biofuels purchased from Caravan Trading and Cima Green more than 35 million gallons of fuel and sold the same amount under the claim it was B100, or pure biofuel, that they had produced. The fuel was really B99, which is biofuel blended with petroleum, according to court documents filed in Southern District federal court in Indianapolis in September 2013.
The fraudulent sale made a $55 million profit; in addition, claiming the B99 biodiesel as B100 exposed the IRS to as much as $35 million in false claims, according to the court filing.
The company occasionally bought and processed legitimate feedstock to give customers and outsiders the false impression that biodiesel was regularly produced at the facility, the filing states.
The Ducey’s said their biodiesel was “100 percent agri-biodiesel (derived solely from virgin oils)” when they knew this was false, according to court documents. The scheme was carried out from July 2009 to May 2012.
False statements from the company’s 2011 annual report include: “We produce our biodiesel from a wide variety of feed stocks including soy oil, inedible animal fat, used cooking oil and inedible corn oil” and “We generally sell B100 to our customers.”
The report did not state that the biodiesel being sold had been fully or partially produced by someone else. They would also use false paperwork with their customers and follow-up with false invoices, according to court documents.
E-Biofuels was founded in 2006 and operates a production plant that can process animal fats and vegetable oils into renewable fuel, through a process called transesterification. Craig Ducey was the president of the company, Chad Ducey was the chief operating officer and Chris Ducey worked as the logistics manager.
In 2010 Imperial Petroleum Inc. purchased E-Biofuels, but the brothers continued to serve as paid officers, managers and consultants. Jeffrey Wilson, Evansville, served as the president and chief executive officer of Imperial Petroleum and continued with the scam from early 2010 until the end of 2011. Wilson is also facing charges in a separate case alongside Craig Ducey.
Wilson and the Ducey brothers knew E-Biofuels was purchasing and reselling biodiesel instead of producing its own fuel from virgin feedstocks, according to the filing for that case. They were also falsely representing the company to investors, shareholders and auditors.
In the summer of 2011, Craig Ducey and Wilson defrauded a hedge fund investor, according to the filing. They tried convincing a company to invest in Imperial securities and provided annual and quarterly reports with false statements and omissions.[[In-content Ad]]
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