April 7, 2017 / 9:21 PM / 3 years ago

N.J. man sentenced to five years prison for biodiesel fraud

WASHINGTON (Reuters) - The owner of a New Jersey feedstock processor was sentenced to five years in prison for his role in a scheme that generated fraudulent tax and renewable fuel credits, the U.S. Department of Justice said on Friday.

In addition to the prison term, Malek Jalal, owner of Unity Fuels, was ordered to pay more than $1 million in restitution in a scheme that involved more than $7 million worth of fraudulent tax credits and renewable fuel credits known as RINs, the Justice Department said.

Jalal pleaded guilty in September.

According to his plea, Jalal engaged in a scheme with other co-conspirators to fraudulently claim RINs multiple times on the same fuel. Jalal bought fuel from a company based in New York, blended it with other materials and then sold it back to the same company, the Justice Department said.

Jalal also modified and destroyed records after receiving a grand jury subpoena from a court in Ohio. He directed a worker at Unity Fuels to fabricate false records in an attempt to hide the scheme, according to his plea.

The U.S. government’s renewable fuels programme requires certain amounts of biodiesel to be blended into the country’s motor fuel each year. Under the programme, biofuel companies can generate RINs credits they can sell to other companies who need them to meet their fuel requirements.

“Unlawful acts like those at issue in this case defraud the U.S. government, harm American taxpayers and consumers, and undermine energy and environmental laws enacted by Congress,” said General Wood, the Justice Department’s acting assistant attorney general for the Environment and Natural Resources Division.

Reporting by Timothy Gardner; Editing by Lisa Shumaker and Bill Trott

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