Fraudster Sentenced to 51 Months in Federal Prison
Spokane, WA - Joseph H. Harrington, United States Attorney for the Eastern District of Washington, announced that Jin Chul “Jacob” Cha, age 41, of Tustin, California, who pleaded guilty on January 11, 2018 to Conspiracy to Defraud the Government and Conspiracy to Commit Wire Fraud, was sentenced today. United States District Judge Salvador Mendoza, Jr. imposed a 51–month term of imprisonment to be followed by a three-year term of court supervision after he is released from Federal prison. Judge Mendoza will determine restitution at a later date.
According to information disclosed during the court proceedings, Cha was a member of a conspiracy involving Gen-X Energy Group, Inc. (Gen-X), a renewable energy company formerly located in Pasco and Moses Lake, Washington. Between October of 2012 and March of 2015, Cha and his co-conspirators falsely claimed the production of more than 9,400,000 marketable renewable energy credits, which they then sold for more than $6,000,000, and filed false claims with the IRS for $2,506,094 in excise credit refunds. Throughout this period, much of the renewable fuel claimed to be produced at the Gen-X facilities was either not produced or re-processed multiple times.
“The defendant, Mr. Cha, has been sentenced to spend years in prison for his role in a multi-million dollar conspiracy to defraud the renewable fuels program,” said Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division. “This prosecution, which is part of a broader effort involving the Gen-X Energy Group, shows there are serious consequences for this kind of fraudulent conduct. I applaud the work of the federal, state, and local law enforcement personnel involved in bringing down this criminal enterprise.”
Joseph H. Harrington said, “I commend the tenacious and thorough efforts of investigators from IRS-Criminal Investigation and the Environmental Protection Agency’s Criminal Investigation Division. The United States Attorney’s Office will continue to work closely with our law enforcement partners to aggressively prosecute fraud and other white collar crimes in the Eastern District of Washington."
"Today Mr. Cha and the Gen-X Energy Group are being held accountable for their massive and complex $65 million fraud," said Darrell Waldon, Special Agent in Charge of IRS Criminal Investigation." Along with our law enforcement partners IRS Criminal Investigation will continue to vigorously investigate and prosecute white collar criminals who pursue illegal schemes to steal from the U.S. taxpayer."
“The defendant defrauded taxpayers and biofuels companies out of millions of dollars,” said Susan Bodine, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “This case shows that EPA and its law enforcement partners will prosecute those who seek to profit by breaking the law.”
This investigation was conducted by the Internal Revenue Service-Criminal Investigations, the Environmental Protection Agency’s Criminal Investigation Division, and the United States Secret Service, with assistance from the Washington State Patrol and the Los Angeles Port Police Department Hazardous Materials Investigations Unit. The case was prosecuted by Scott T. Jones, Assistant United States Attorney for the Eastern District of Washington; Karla G. Perrin, EPA Regional Criminal Enforcement Counsel and Special Assistant United States Attorney for the Eastern District of Washington; and Adam Cullman and Thomas Franzinger, Trial Attorneys, Environmental Crimes Section, United States Department of Justice.