Former Oregon Department of Energy Employee Pleads Guilty to Money Laundering Conspiracy
PORTLAND, Ore. – On Thursday, March 15, 2018, Joseph J. Colello, 57, of Salem, Oregon, pleaded guilty to one count each of conspiracy to engage in monetary transactions in property derived from specific unlawful activity, conspiracy to defraud the IRS and filing a false income tax return.
According to court documents, between June 2012 and March 2015, Colello was employed as a pass-through program manager for the Oregon Department of Energy’s (ODOE) Business Energy Tax Credit (BETC) program. In his role, Colello helped owners of BETCs sell their credits by locating buyers and facilitating transfers.
In 2012, Colello and a coconspirator devised a plan whereby Colello would give the coconspirator the names of BETC sellers and interested buyers—information he had access to as an ODOE employee. Colello would then contact the sellers and buyers to negotiate credit transfers, but made it appear as though the coconspirator had brokered the deals. Colello and the coconspirator agreed to have the coconspirator create a sham company in order to receive commission payments from the sellers of the tax credits and to conceal their earned income from the IRS. Colello and the coconspirator charged sellers a 1-2% fee, undercutting brokers who typically charged a 10% fee for facilitating similar credit transfers. Colello would receive a portion of this fee as a kickback.
Between 2012 and 2015, the coconspirator deposited over $1.3 million in income from the commissions charged to sellers of BETC credits. The coconspirator would transfer a portion of these funds into a personal account from which he would purchase and issue biweekly cashier’s checks payable to Colello. Over the course of the conspiracy, the coconspirator purchased and issued approximately 58 cashier’s checks to Colello or his girlfriend. In total, Colello received more than $300,000 in bribe payments for his role in the scheme.
Colello faces a combined maximum sentence for all three charges of 28 years in prison, more than $1 million in fines and up to three years of supervised release. He will be sentenced on July 2, 2018 before U.S. District Court Judge Michael W. Mosman.
The case was investigated by IRS Criminal Investigation and the FBI and is being prosecuted by Claire M. Fay and Scott E. Bradford, Assistant U.S. Attorneys for the District of Oregon.