James Jariv, 64, of Las Vegas, Nevada, was sentenced in
federal court in Las Vegas today to ten years in prison for his role in illegal
schemes to generate fraudulent biodiesel credits and to export biodiesel
without providing biodiesel credits to the United States. Jariv was also ordered to make restitution in
the amount of $6,345,830.91 and to forfeit between $4 to $6 million in cash and
other assets.
Jariv was the second defendant to be sentenced for the
scheme. Nathan Stoliar, 64, of Australia,
was sentenced to two years in prison in April for his role in the conspiracy
and ordered to pay more than $1.4 million in restitution and to forfeit of $4
million in cash. In addition, in court
papers unsealed last week, Alex Jariv, 28, also of Las Vegas, pleaded guilty in
the scheme and his sentencing was scheduled for Aug. 18, 2015.
James Jariv and Stoliar both pleaded guilty to one count of
conspiracy, one count of conspiracy to engage in money laundering, two counts
of wire fraud and one count of making false statements under the Clean Air
Act. Alex Jariv pleaded guilty to one
count of conspiracy to commit wire fraud, make false statements and launder
monetary instruments.
“This was an egregious scheme to defraud fuel suppliers, the
United States, and a program designed to strengthen our nation’s petroleum
independence and improve our air quality” said Assistant Attorney General John
C. Cruden for the Justice Department’s Environment and Natural Resources
Division. “We will not tolerate such fraud
and will vigorously prosecute those who put their own enrichment above our
nation’s interests.”
“Mr. Jariv and his co-defendant defrauded the United States
government of millions of dollars through this biodiesel fraud scheme,” said
U.S. Attorney Daniel Bogden for the District of Nevada. “They used a Las Vegas company and Las Vegas
bank accounts to facilitate the scheme.
Fortunately, in addition to convicting both defendants, we were able to
seize and forfeit millions of dollars from numerous bank accounts, as well as
real property in Nevada and California, jewelry and other assets.”
“EPA's criminal enforcement program goes after the most
egregious offenders,” said Assistant Administrator Cynthia Giles for
Enforcement and Compliance Assurance at EPA. “For his role in undermining the Renewable
Fuel Standard, developed to reduce the nation’s impact on climate change and
lessen our dependence on foreign oil, Mr. Jariv is going to prison. Let today’s sentence send a clear message to
others who engage in biofuel fraud that EPA takes seriously its responsibility
to bring violators of this important program to justice.”
The Energy Independence and Security Act of 2007 created a
number of federally-funded programs that provided monetary incentives for the production
and use of renewable fuels such as biodiesel in the United States. Biodiesel producers and importers can
generate and attach credits known as renewable identification numbers (RINs) to
the gallons of biodiesel they produce or import. Because certain companies (such as companies
that sell transportation fuel in the United States) need RINs to comply with
regulatory obligations, RINs have significant market value. They are routinely bought and sold in the marketplace. In addition, to ensure that RINs are
generated for renewable fuel used only in the United States and in order to
create an incentive for biodiesel in the United States to be used here, anyone
who exports biodiesel is required to obtain these valuable RINs for all
exported gallons and provide the RINs to EPA.
Beginning around September of 2009, James Jariv and Stoliar
operated and controlled a company -- City Farm Biofuel in Vancouver, British
Columbia, Canada -- that represented itself as a producer of biodiesel from
“feedstocks” such as animal fat and vegetable oils. James Jariv and Stoliar also formed a company
called Canada Feedstock Supply – that represented itself as City Farm’s
supplier of feedstocks necessary to produce biodiesel. James Jariv operated and controlled a company
based in Las Vegas called Global E Marketing (GEM).
Alex Jariv worked for and on behalf of these companies. Using these three and other closely-held
companies, the three defendants claimed to produce biodiesel at the City Farm
facility and to import and sell biodiesel to GEM and then generated and sold
RINs based upon this claimed production, sale and importation. In reality, no biodiesel produced at City
Farm was ever imported and sold to GEM as claimed. The Jarivs and Stoliar used GEM to claim to
blend the biodiesel with petroleum diesel, allowing them to sell the RINs
separately from any actual biodiesel.
Using this scheme, the three men falsely claimed to import, purchase and
blend more than 4.2 million gallons of biodiesel. They then sold the RINs, and fraudulently
generated more than $7 million.
James Jariv and Stoliar also purchased and resold RIN-less
B-99 biodiesel as B-100 biodiesel, which allowed them to charge substantially
more for this product than if it has been accurately labeled. They exported significant amounts of the
RIN-less B-99 they bought in the United States to Canada and Australia. They then sold the biodiesel in those
countries and conspired to not acquire and provide RINs to the United States
for these exports as they were required to do by law. In doing so, James Jariv and Stoliar failed
to give to the United States RINs worth in excess of $34 million, keeping this
money for themselves instead.
Finally, James and Alex Jariv and Stoliar conspired to
launder the proceeds of their crimes, utilizing foreign banking institutions
and complex financial transactions to promote their illegal schemes and
distribute the proceeds of their crimes.
Accounts were utilized in Canada, Nevada and Australia and transactions
between the defendants’ closely-held companies were described as other
legitimate transactions involving biodiesel, when in reality they were not.
The investigation into the Jarivs’ and Stoliar’s activities
was the result of collaborative work by the EPA’s Criminal Investigation
Division and the FBI, with assistance from the United States Secret Service,
the Internal Revenue Service-Criminal Investigations, the Department of
Homeland Security and the Royal Canadian Mounted Police.
The case was prosecuted by Wayne D. Hettenbach of the
Environmental Crimes Section, U.S. Department of Justice, Assistant U.S.
Attorneys Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s
Office in Nevada and Assistant Deputy Chief Darrin L. McCullough of the Justice
Department’s Criminal Division, Asset Forfeiture and Money Laundering Section,
with the assistance of the Justice Department’s Office of International Affairs
and the U.S. Attorney’s Office for the Southern District of Texas.
No comments:
Post a Comment