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Compared to 2015, soybean oil remained the largest feedstock for Iowa biodiesel producƟon at a steady 66 percent. Animal fats dropped slightly to 14 percent of producƟon, while corn oil held at around 10 percent. Used cooking oil and canola oil doubled their 2015 numbers, combining to account for roughly 10 percent of 2016 biodiesel producƟon in Iowa. More Prison Sentences for Fraud Jeffrey Wilson and Craig Ducey were sentenced in December to serve prison terms of 120 months and 74 months, respecƟvely, for their roles in mulƟ-million-dollar fraud schemes involving biodiesel tax credits, renewable fuel credits, and shares of Imperial Petroleum Inc. In addiƟon, Chad Ducey was sentenced to an 84-month prison term for his role in the same schemes. These defendants were the last to be sentenced from a group of seven charged co-conspirators. The others, Joseph Furando, KaƟrina Tracy, Brian Carmichael, and Chris Ducey were sentenced at prior hearings. Although charged in three separate cases, all the defendants parƟcipated in fraud involving federal incenƟves to produce renewable fuels, specifically biodiesel. The December sentences were the first to address securiƟes fraud charges leveled against Wilson and Craig Ducey. That fraud stemmed from lies those defendants told in the course of their dealings with investors, auditors, and the SecuriƟes and Exchange Commission (SEC) while represenƟng Imperial Petroleum. Wilson, president and chief execuƟve officer of Imperial Petroleum, drafted and certified the accuracy of Imperial’s quarterly and annual reports and made those reports available to the invesƟng public through filings with the SEC. He also lied to the company’s outside auditor to keep him from learning of the scheme. In April 2015, Craig Ducey admiƩed to related crimes and began cooperaƟng with United States authoriƟes; he tesƟfied at Wilson’s trial and the court recognized his assistance by giving him a lesser sentence than Wilson. The securiƟes fraud began when Wilson learned that e-biofuels LLC – a business that Wilson arranged for Imperial Petroleum to buy – was falsifying paperwork to claim incenƟves for biodiesel it had not manufactured. As e-biofuels managers fraudulently claimed millions in federal tax rebates and other incenƟves that had no basis in real manufacturing, Wilson directed the managers to move more gallons of such fuel rather than incur the cost associated with legiƟmate biodiesel producƟon. Despite their knowledge that the e-biofuels facility was dormant, Wilson and Craig Ducey told investors, auditors, and SEC that it made millions of gallons a month from raw materials like chicken fat. This defrauded biodiesel buyers – who were duped into taking bad tax credits and renewable fuel credits – and also defrauded investors. Chad Ducey was sentenced for his role in the underlying wire, tax fraud, and environmental crimes that were hidden by the securiƟes fraud (he was not charged with securiƟes fraud). He owned e-biofuels together with his brother Craig Ducey unƟl they sold it to Imperial Petroleum. Chad Ducey was inƟmately familiar with how the e-biofuels facility worked and knew that it was not manufacturing biodiesel between Continued on page 23 www.rendermagazine.com Render February 2017 17


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