3 Indiana brothers plead guilty in biofuels fraud

(File Photo)

INDIANAPOLIS (WISH) — Millions of tax payer dollars stolen and now the company responsible will have to pay for their actions. Investigators say three brothers who ran E-biofuels LLC, out of Muncie, are behind the scheme and it was one of the largest fraud busts in Indiana history.

United States Attorney Josh Minkler announced the charges with members from the FBI, EPA and IRS.

Brothers Chad, Chris and Craig Ducey all pleaded guilty to running the company E-biofuels LLC.

The brothers resold biodiesel and then accepted federal tax incentives as if they had produced the fuel. Authorities say they had been doing for years.

“The $145 million worth of fuel wasn’t fuel made by E-biofuels it was made by other companies,” Senior Litigation Counsel Steven DeBrota said. “The federal incentives had already been taken. The tax payers had already paid $35 million to have that fuel exist.”

The brothers would take what’s known as Renewable Identification Number and make new RINs after they bought biofuel from another producer.

Craig Hatfield is the Quality Control Manager for Integrity Biofuels in Morristown, and says RINs are an important way to track the biofuel.

“Overall it makes us an economically viable business to operate and make our margin large enough to sustain this facility and these local jobs,” Hatfield said.

The government gives incentives to companies in order to help create energy independence.   A former employee of E-biofuels spoke out against the brothers, which led investigators to the fraud.

“This is an example of a program under stress and it depends on trust and this isn’t the only company that has violated that trust that the taxpayers and the public put in that program,” said Debrota.

Police seized $7.5 million in funds jewelry artwork and cars.  The Ducey brothers face up to 20 years in prison for some of the charges.

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