North American Power Group, Ltd. And Michael Ruffatto Agree to Pay $14.4 Million to Resolve Alleged False Claims for Department of Energy Cooperative Agreement Funds
PITTSBURGH - North American Power Group, Ltd. (NAPG) and its owner and president, Michael Ruffatto, have agreed to pay the United States $14.4 million to resolve allegations that they violated the False Claims Act by submitting fraudulent claims under a cooperative agreement with the Department of Energy (DOE) National Energy and Technology Laboratory (NETL), located in Pittsburgh, Pennsylvania, U.S. Attorney Scott W. Brady announced today.
Based in Greenwood Village, Colorado, NAPG develops, owns, operates and manages energy-related projects. On December 8, 2009, NETL awarded a $14 million cooperative agreement to NAPG for a Carbon Site Characterization Project to collect and analyze data, as well as to design and implement carbon sequestration wells at the Two Elk Energy Park (TEEP) located in Campbell County, Wyoming. Between December 2009 and January 2012, Ruffatto served as NAPG’s representative for the cooperative agreement and was responsible for authorizing the submission of the company’s invoices associated with the project to NETL for payment. In that time, NAPG submitted more than $7 million in claims for reimbursement under the cooperative agreement, of which approximately $5.7 million was reimbursed by NETL. A federal investigation revealed that the $5.7 million paid by DOE to NAPG for costs supposedly related to the NETL project were actually used by Ruffatto to pay legal fees, car payments, jewelry, international travel, and other personal items unrelated to the scope of work under the cooperative agreement. The DOE suspended the cooperative agreement in January 2012 after discovering the fraudulent claims.
On October 21, 2016, Ruffatto entered a plea of guilty in the U.S. District Court for the Western District of Pennsylvania to a felony count of intentional submission of false claims under 18 U.S.C. § 287. He was sentenced on June 27, 2018, to 18 months in prison, three years supervised release, a $50,000 fine and was directed to pay $2 million dollars more in restitution as the remainder of the civil settlement.
"This $14.4 million False Claims Act settlement is the largest NETL settlement in the history of western Pennsylvania," said U.S. Attorney Scott W. Brady of the Western District of Pennsylvania. "Protecting taxpayer funds is an important priority of our office and this settlement, along with yesterday’s sentence, demonstrate we will use every tool in our arsenal to prevent and deter wrongful expenditures of government monies."
The settlement was the result of a joint investigation conducted by the DOE Office of Inspector General, the Civil Division of the Department of Justice, and the U.S. Attorney’s Office for the Western District of Pennsylvania. Senior Trial Counsel Donald J. Williamson of the Department of Justice’s Civil Frauds Section and Assistant United States Attorney Paul E. Skirtich handled the investigation that led to this civil settlement on behalf of the United States.