The Herald Bulletin

Morning Update

Local Business

October 5, 2013

Biofuel equipment sold from company accused of historic fraud scheme

Former town official says he does not believe company planned to defraud anyone

MIDDLETOWN — This week buyers removed truckloads of alternative fuel processing equipment from a former biodiesel plant.

“It’s being piecemealed out,” said Matthew DelGuidice, vice president of US Operations at Maynards Industries, in Chicago.

The equipment was sold during a live webcast with more than 100 bidders, said DelGuidice. Maynards, an industrial asset auction, appraisal and liquidation company, purchased the equipment after E-Biofuels, LLC filed for bankruptcy in 2012.

“Everything sold,” he said. “There were no surprises and everything sold at what we thought it would sell for or above.”

When E-Biofuels began production of biodiesel in 2007, officials were eager to welcome the cutting edge fuel plant to the close-knit community.

Today, those former officials and many residents are wondering what went so wrong in what is now being called the largest tax and security fraud scheme in Indiana’s history.

In September, the U.S. Attorney brought charges against Craig Ducey, Chad Ducey, Chris Ducey, and Brian Carmichael, who operated E-Biofuels, a company which claimed to produce biodiesel from “feedstocks” including animal fat and vegetable oils. Joseph Furando and Evelyn Katirina Pattison — executives of a related New Jersey-based company — are being charged with assisting the officials at E-Biofuels in passing off fuel which had been purchased at other facilities as its own.

There are 88 counts against the defendants, including allegations of conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering and securities fraud. The allegations claim that customers were defrauded of more than $55 million and the Internal Revenue Service was exposed to as much as $35 million in false claims.

The charges allege that in July 2009, E-Biofuels sold more than 35 million gallons that had been stripped of renewal identification numbers (RINs). In order to encourage the production of renewable fuel, the RINs, which are special tax incentives, are attached to the sale of each gallon of biodiesel produced.

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