Washakie Renewable Energy Tax Fraud: False Fuel Claims and the CEO’s Coverup

Washakie Renewable Energy’s tax fraud scheme ran from 2010 to 2018 and sought more than $1 billion in refundable renewable fuel credits, according to the Justice Department’s account of the criminal trial and guilty pleas. The IRS paid more than $511 million to the Utah biodiesel company. The same criminal account describes transport documents that turned finished biodiesel into apparent raw material, false production records and invoices created to support the claims. If you worked with the fuel, the shipments or the books, that gap between what moved and what the paperwork said is the part you may recognize.

Our broader fuel tax credit fraud page explains the different schemes built around fuel and refund records. This page follows Washakie’s owners by role, the production story they sold to the government and the records they later concealed or destroyed.

Washakie’s IRS Claims and EPA Credits

Washakie’s claims targeted a program that could pay money directly to a fuel business. As the Justice Department explained in its announcement of the criminal indictment, the IRS administered renewable fuel tax credits designed to increase renewable fuel production and use in the United States. It paid those credits regardless of whether the taxpayer owed other taxes.

The false production story also reached the Environmental Protection Agency’s Renewable Fuel Standard program. The Justice Department’s later criminal case account says Washakie fraudulently obtained millions of renewable identification numbers, commonly called RINs, and sold them for approximately $65 million. Those sales gave the false fuel records another source of revenue alongside the IRS payments.

Finished Biodiesel Came Back as Feedstock

The Justice Department’s account of the criminal trial describes Washakie passing off already-produced biodiesel as material from which it supposedly made new biodiesel. Participants bought that fuel from the East Coast of the United States, where other producers had already claimed the renewable fuel tax credit. Participants exported that fuel to foreign countries, including Panama, then doctored the transport documents to disguise the returning biodiesel as feedstock.

In that account, Washakie used the paperwork to claim it had produced biodiesel from the feedstock. Later, participants bought millions of gallons of biodiesel and rotated it through the U.S. shipping system to create the appearance that Washakie was producing and selling qualifying fuel. We see the shipping label doing the manufacturing.

False Invoices Gave the Claims a Business History

False production and transportation records supported Washakie’s claims to both programs, according to the Justice Department’s account of the criminal trial. Its later account identifies the work behind some of that paperwork: the company’s special-projects manager and another employee backdated documents and created fake invoices to support the false claims.

The bank activity helped make the business story look real. The trial evidence described participants cycling fraud proceeds through more than $3 billion in financial transactions across multiple bank accounts to create the appearance of legitimate business dealings.

For an accounting insider, an invoice and a corresponding transfer may seem to tell the same story. In Washakie’s criminal case, the participants arranged both the paperwork and the movement of money to make false fuel transactions look genuine. We would connect the invoice and transfer to the production or shipment they supposedly represented.

The CEO’s Coverup Reached the Hard Drives

Washakie’s co-owner and CEO participated in the false fuel claims and then admitted trying to conceal the evidence. The indictment identified him and the CFO as equal owners of the company. The Justice Department’s trial account described the CEO and the California fuel company owner shipping biodiesel abroad and back, and doctoring production and transportation records to support the claims.

The CEO’s July 2019 guilty plea supplies the coverup account. As the Justice Department reported it, he admitted agreeing with family members to hide evidence and replace computer hard drives after learning of an impending search warrant. He also admitted obstruction involving attempts to bribe government officials and tamper with witnesses.

That admission connects the false claims to a later decision about the records behind them. If your work involved the computers, the stored invoices or the production files, you may know which records changed and who directed the change. We examine that knowledge alongside what the business told the IRS.

The CFO’s Role in the Same False Records

Washakie’s co-owner and CFO also admitted conduct involving the financial records and their concealment. The Justice Department’s later account of his guilty plea identifies assistance in filing false partnership tax returns, money laundering, and obstruction through concealing and destroying records. His role put the company’s financial side inside the same criminal case as the production story.

The staff’s document work matters alongside those admissions. In the special-projects manager’s plea agreement, as described by the Justice Department, she admitted creating false invoices, backdating documents and concealing records before a federal search warrant. For an employee who handled those documents, who supplied an invoice’s date or description may be as revealing as the finished invoice itself.

Where the Washakie Proceeds Went

IRS Criminal Investigation, the Environmental Protection Agency’s Criminal Investigation Division and the Defense Criminal Investigative Service investigated the case, whose money trail extended to companies overseas. According to the Justice Department’s trial account, the CEO and CFO transferred over $134 million in fraud proceeds to companies in Turkey and Luxembourg at the California participant’s direction. He falsely promised protection from prosecution through corrupt law enforcement personnel, and the transfers were purported payments for that protection.

The same account traced proceeds through NOIL Energy Group to a home in Sandy, Utah, and through SBK Holdings USA to a home in Huntington Beach, California. An employee who understands the accounts and the reason given for a transfer can help explain a payment that looks ordinary when viewed apart from the business behind it.

What the Washakie Records Can Show an Insider

Strong tax fraud evidence connects the physical fuel with its description, the claim that description supported and the money paid on it. Washakie’s criminal case gives that connection a concrete shape: finished biodiesel described as feedstock, false production and transport records, backdated invoices, bank transactions arranged to look like fuel business, and records hidden or destroyed. You may understand one part of that sequence because it was your job to handle it.

We work from that particular knowledge. A shipping employee may recognize returning fuel, a plant employee may know what the business actually produced, and an accounting employee may know who supplied the invoice or directed the transfer. Those explanations help us connect the documents to the people making the decisions and the government money at issue.

A whistleblower case under a qualifying state False Claims Act can pay 15% to 30% of what the government recovers. For Washakie’s federal fuel tax claims, we assess the award opportunity through the IRS whistleblower award program. We work with you to connect what you know about the false credit claim to the potential recovery.

You Know Which Record Changed

If you saw finished biodiesel become feedstock on paper, or watched the records behind a claim disappear, tell our whistleblower experts what changed. We bring in tax fraud whistleblower lawyers who understand false credit claims and stay beside you as we build your strongest case around your knowledge of the fuel and the money.