Owner of Biofuel Company Pleads Guilty to Conspiracy and Obstruction
The owner and manager of a New Jersey feedstock collector and processor pleaded guilty to conspiracy and obstruction for his role in a scheme that generated over $6 million in fraudulent tax credits and the U.S. Environmental Protection Agency (EPA) renewable fuels credits (RIN credits) connected to the purported production of biodiesel fuel.
Malek Jalal, 52, pleaded guilty before U.S. District Magistrate Judge Norah McCann King for the Southern District of Ohio, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, Acting U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio, Special Agent in Charge Kathy A. Enstrom for the Internal Revenue Service’s Criminal Investigation and Acting Special Agent in Charge John Gauthier of EPA’s Criminal Enforcement Program in Ohio.
According to his plea, Jalal engaged in a scheme with other coconspirators to fraudulently claim tax credits and RIN credits multiple times on the same loads of fuel. Jalal, who owned Unity Fuels, bought fuel from a New York-based company that arranged for tax credits and RIN credits to be claimed on it. Unity Fuels then blended the fuel with other material and sold it back to the New York company in order to claim tax credits and RIN credits again. Jalal also admitted to obstruction of justice for providing a federal grand jury with altered and falsified documents and to destroying other documents in connection with the subpoena.
“Congress enacted programs incentivizing the production of biofuels in order to make the United States more energy independent and to modernize our energy economy,” said Assistant Attorney General Cruden. “The fraud perpetrated by Mr. Jalal and his co-conspirators undermines these important public policies. This case demonstrates that the Justice Department will vigorously prosecute those seeking to manipulate these programs for personal gain.”
“Violations of renewable fuels laws can have serious impacts on the marketplace and hurt companies that play by the rules,” said Acting Special Agent in Charge Gauthier. “EPA and its law enforcement partners will continue to protect public health and the environment by prosecuting those who blatantly violate laws that reduce greenhouse gas emissions.”
Conspiracy is punishable by up to five years in prison. Obstruction is punishable by up to 20 years in prison. U.S. District Judge Graham will determine the sentence following a pre-sentence investigation by the court.
Assistant Attorney General Cruden and Acting U.S. Attorney Glassman commended the cooperative investigation by law enforcement, as well as Department of Justice Trial Attorney Adam Cullman, Senior Trial Attorney Jeremy Korzenik and Assistant United States Attorney J. Michael Marous, who represented the United States in this case.