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Ringleader in $90M fuel scam sentenced to 20 years

January 8, 2016

The ringleader of a $90 million biodiesel scam operated in central Indiana was sentenced Thursday to serve 20 years in prison and to pay more than $56 million in restitution for his role in the fraud.

Joseph Furando, 50, of Montvale, New Jersey, had pleaded guilty to 37 felony counts, including conspiracy and wire fraud, in a deal with prosecutors.

“Joseph Furando used fraud to spin biodiesel programs into a million-dollar home, high-end cars, expensive jewelry and watches and any other luxury that pleased him,” said U.S. Attorney Josh Minkler in a prepared statement Friday.  “He did so through threats, bullying, and intimidation.

“With the court’s sentence, all of that unraveled. The agencies and prosecutors who unraveled his schemes have shown how foolish it is to try to prey on these programs.”

Furando and several accomplices were accused of sending biodiesel fuel that got renewable fuel credits to a Middletown facility operated by the now-bankrupt E-Biofuels LLC, which falsely claimed it made the fuel to get more credits. Middletown is located about 50 miles east of Indianapolis.

Federal prosecutors also said they sold the fuel as 100-percent biofuel, but that it contained some petroleum diesel.

A U.S. attorney said in 2013 that the scam allowed the conspirators to charge more than what the biofuel was worth, and that they got tax credits and other benefits that they shouldn't have received. Prosecutors said customers who bought the fuel were defrauded of more than $55 million, while the IRS lost $35 million in tax breaks and renewable energy credits.

According to prosecutors, Furando had a "history of violence" that includes bending backward an employee's finger and threatening to stab and blackmail the president of the Middletown facility.

U.S. District Judge Sarah Evans Barker on Thursday ordered Furando to pay more than $56 million in restitution jointly with other defendants. Under the terms of the plea agreement, Furando was obligated to forfeit assets including a Ferrari, other cars, a million-dollar home, artwork, a piano, and two biodiesel-powered motorcycles.

In separate hearings Thursday, three corporations at the heart of the scheme also were sentenced for their joint liability in the scheme. Furando’s companies, CIMA Green LLC and Caravan Trading LLC, were both sentenced to pay $56 million in restitution. The companies are largely defunct, according to prosecutors.

The third company, E-biofuels LLC, operated by Furando’s co-defendants Craig Ducey, Chad Ducey and Chris Ducey, was also sentenced to pay the $56 million in restitution. E-biofuels is in bankruptcy, and its few remaining assets are being distributed to creditors and victims through the bankruptcy process.

All of the other defendants in this case have pleaded guilty and are awaiting sentencing, prosecutors said.
 

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