Houston, 27 August (Argus) — A Texan accused of defrauding energy companies and traders of more than $40mn in a fraudulent biodiesel scheme has returned more than $15mn to federal officials, according to court filings.
Prosecutors say Jeffrey Gunselman, 30-year-old founder of Absolute Fuels, sold more than 48mn renewable identification numbers (RINs) between September 2010 and 2011. Fuel producers and importers use RINs under a system created by the US Environmental Protection Agency to track specific gallons of biodiesel and show compliance with US biofuel mandates.
Unlike a prior biodiesel fraud case, Absolute Fuels did have the equipment required to create biodiesel. But investigators say Absolute Fuels generated 48mn RINs without producing a drop of the fuel.
Gunselman faces 79 charges of wire fraud, money laundering and false statements under the Clean Air Act. Most of the money comes from assets seized by the government, as well as $10,000 in cash, according to court documents.
“The United States would state that the $15mn is but a fraction of the millions of dollars associated with the fraud and still unaccounted,” prosecutors said in a filing urging the US District Judge Sam Cummings keep Gunselman in jail prior to trial.
Gunselman and his companies are working to sell the Texas biodiesel assets, as well as collect on sales of real biodiesel to replace RINs to certain companies, according to court documents. His attorneys were also trying to demonstrate he was not a flight risk as prosecutors sought to keep him detained behind bars before trial.
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