Bio-diesel Fuel Company Owner Sentenced To 188 Months In Federal Prison On Wire Fraud, Money Laundering And False Statements Convictions
Jeffrey Gunselman Also Fined $175,000 and Ordered to Pay Nearly $55 Million in Restitution
LUBBOCK, Texas — Jeffrey David Gunselman, 30, was sentenced today by U.S. District Judge Sam R. Cummings to 188 months in federal prison, fined $175,000 and ordered to pay $54,973,137 in restitution, following his guilty plea in December 2012 to an Indictment charging 51 counts of wire fraud, 24 counts of money laundering and four counts of making false statements in violation of the Clean Air Act. Gunselman has been in custody since July 2012. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
“I commend the excellent investigative work done by special agents and investigators with EPA’s Criminal Investigation Division and the U.S. Secret Service in this complex fraud case,” said U.S. Attorney Saldaña.
“Congress created the Renewable Fuel Standard to ensure that transportation fuel sold in this country contains a minimum amount of renewable fuel,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Texas. “Today’s judicial action demonstrates the consequences for exploiting the Renewable Fuels program in order to steal millions of dollars from customers and taxpayers.”
Gunselman was the owner of Absolute Fuels, LLC, dba Absolute Fuels, LLC (Absolute Fuels), which he formed in April 2009. He was also named as Governing Person and/or as Registered Agent for other business entities associated with Absolute Fuels, LLC, including Absolute Fuels, LLC; Absolute Milling, LLC; Ellipse Energy, LLC; 21 Investments, LLC; and YGOG Holdings, LLC. However, Gunselman admitted that these entities are solely alter egos of himself, as an individual, as he alone owns, manages, directs and controls each of them and each has no separate and distinct existence from him.
Gunselman admitted that from September 2010 to October 2011, he devised a scheme to defraud the Environmental Protection Agency (EPA) by falsely representing that he was in the business of producing bio-diesel fuel, yet Gunselman did not have a bio-diesel fuel-producing facility. Instead, Gunselman’s business operation consisted of falsely generating renewable fuel credits and selling them to oil companies and brokers. He instructed purchasers to wire payments to a bank account he solely controlled, and as a result, approximately $41,762,236 was deposited into that account.
From September 2010 to mid-October 2011, Gunselman conducted 51 fraudulent transactions, which were transmitted by wire communications, that represented to the EPA that bio-diesel fuel had been produced at the Absolute Fuels facility in Anton, Texas, when in fact, no bio-diesel fuel had been produced. This ultimately resulted in Gunselman requesting and receiving payments, by electronic funds transfer, of approximately $41,762,236.
Regarding the money laundering convictions, during the same time period, Gunselman engaged in monetary transactions in criminally derived property by purchasing real and personal property valued at approximately $12 million with the funds derived from the wire fraud. Included in that property are: several vehicles, including a Bentley, Mercedes-Benz, Lexus, Cadillac and Shelby Cobra; a Patton Military Tank; a Gulfstream airplane, professional basketball season tickets and corporate sponsorship; and agricultural, business and residential real estate.
The false statements convictions stem from Gunselman making material false statements to the EPA, falsely claiming and representing that bio-diesel fuel, a renewable fuel, had been produced, generating renewable fuel credits, when Gunselman well knew that no bio-diesel fuel had been produced.
The case was investigated by the EPA Criminal Investigation Division and the U.S. Secret Service.
Assistant U.S. Attorneys Paulina Jacobo and Justin Cunningham, of the U.S. Attorney’s Office in Lubbock, were in charge of the prosecution. Assistant U.S. Attorney John J. de la Garza handled the forfeiture.