St. Augustine Contractor Pleads Guilty To Failing To Pay IRS Payroll Taxes That He Withheld From Employees’ Pay
Fort Myers, FL – U.S. District Judge Sherri Polster Chappell today sentenced Andre Bernard (65, Mount Kisco, NY) to seven years and three months in federal prison for his role in a multi-state scheme to defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel credits and fraudulently claiming tax credits. As part of his sentence, the Court also entered a money judgment in the amount of $10,500,497.92, the proceeds Bernard personally received as a result of the charged criminal conduct. Two accounts previously seized accounts worth more than $1.5 million will be credited against the money judgment.
Bernard pleaded guilty on August 2, 2017.
According to court documents, Bernard and his co-conspirators engaged in a scheme to defraud biodiesel credit (known as “RIN” credits) buyers and U.S. taxpayers. The conspiracy involved having Gen-X Energy Group (Gen-X), headquartered in Pasco, Washington, and its subsidiary, Southern Resources and Commodities (SRC), located in Dublin, Georgia, generate fraudulent RINs and tax credits multiple times on the same material.
Bernard and his co-conspirators operated several shell companies that claimed to purchase and sell the renewable fuel. The co-conspirators also cycled the funds through these shell companies’ bank accounts to perpetuate the fraud scheme and conceal its proceeds.
From March 2013 to March 2014, the co-conspirators generated at least 60 million RINs that were based on fuel that was either never produced or was merely re-processed at the Gen-X or SRC facilities. The co-conspirators received at least $42 million from the sale of these fraudulent RINs to third parties. In addition, Gen-X received approximately $4,360,724.50 in false tax credits for this fuel.
“The successful prosecution of these fraudsters is a testament to our commitment to combat crime at every level,” said U.S. Attorney Chapa Lopez. “We will continue to support our investigative partners in dismantling such criminal schemes.”
“Today’s sentencing shows that the Department of Justice will continue to vigorously prosecute those who defraud the federal government and the American taxpayer through unlawful schemes,” said Acting Assistant Attorney General Wood. “We applaud the work of DOJ and EPA’s law enforcement teams that sought and obtained justice in this case.”
“Fraud against the United States and its citizens will continued to be targeted by the Secret Service,” said Resident Agent in Charge Jeff Kelly with the U.S. Secret Service. “These complex investigations are only successfully accomplished with the dedication and partnership of our partner agencies and the U.S. Attorney Office in bringing accountability.”
“We will not tolerate environmental fraud in the Renewable Fuels Program, or anywhere else.” said EPA Administrator Scott Pruitt. “This case highlights EPA's resolve in working with partners, nationally, to hold bad actors accountable."
Six of Bernard’s co-conspirators were previously sentenced for their roles in this biodiesel fraud scheme. Thomas Davanzo and Robert Fedyna were prosecuted in the Middle District of Florida and were sentenced to 10 years and 1 month imprisonment and 11 years and 3 months’ imprisonment, respectively. In the Eastern District of Washington, Scott Johnson was sentenced to 8 years and 1 month in federal prison; Donald Holmes was sentenced to 6 years and 6 months’ imprisonment; Nancy Bush-Estes received a sentence of 6 years and 1 month; and Richard Estes was sentenced to 8 years and 9 months in federal prison.
This case was investigated by the U.S. Secret Service, the Environmental Protection Agency – Criminal Investigation Division, and the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorneys Sara C. Sweeney and Megan Kistler and Trial Attorney Adam Cullman of the Environment and Natural Resources Division of the Department of Justice.