Australian Man Guilty of RIN Fraud

STREATOR, Ill. (DTN) -- Nathan Stoliar, 64, of Australia, pleaded guilty in federal court in Las Vegas, Nevada, on Tuesday, July 22, to five felonies for his role in schemes worth more than $41 million to generate fraudulent biodiesel Renewable Information Numbers and export biodiesel to the United States.

Stoliar is required by the plea to forfeit $4 million and pay $1 million in restitution. He faces a maximum sentence of 20 years in prison and a $500,000 fine for each of the counts of conspiracy to engage in money laundering and wire fraud or another $1 million, five years in prison and a $250,000 fine for conspiracy, and two years in prison and a $250,000 fine for making false statements under the Clean Air Act.

According to a news release issued Tuesday by the U.S. Justice Department, Stoliar and another defendant had been charged in January in a 57-count indictment alleging conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering.

Following his indictment, Stoliar's arrest was sought by the U.S. Located in Poland, Stoliar returned in early February to the U.S. to surrender for arrest. Stoliar pleaded guilty Tuesday to one count of conspiracy, one count of conspiracy to engage in money laundering, two counts of wire fraud and one count of making false statements under the Clean Air Act.

"Stoliar and his co-conspirator perpetrated a massive fraud against a renewable fuels program created to protect our nation's energy security and independence," said Sam Hirsch, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division. "The Justice Department will continue to pursue fraudsters at home and abroad and protect the integrity of federal programs as it protects the environment."

"By rooting out fraud, EPA is committed to achieving the environmental goals that Congress envisioned when it created the Renewable Fuel Standard," said Cynthia Giles, the U.S. Environmental Protection Agency's assistant administrator for Enforcement and Compliance Assurance. "This case, like other recent ones, supports legitimate businesses and makes clear to potential violators that EPA and its partners will fight to protect the program's integrity."

"With this guilty plea, the defendant admitted that he participated in a conspiracy to defraud the United States government, specifically the EPA, and that he personally gained more than $7 million from the scheme," said Dan Bogden, U.S. Attorney for the District of Nevada. "These types of schemes are complex and require an enormous expenditure of resources to investigate and prosecute. Because of the tremendous work of the investigators and prosecutors on this case, we were also able to seize and forfeit from the defendant millions of dollars from bank accounts, as well as real property in Nevada and California, jewelry and other assets."

Under the Energy Independence and Security Act of 2007, U.S. biodiesel producers and importers generate and attach RIN credits to the gallons of biodiesel they produce or import. Because obligated parties -- refiners, blenders and importers -- need RINs to comply with regulatory renewable fuel blending obligations, RINs have market value. In addition, anyone who exports biodiesel is required to obtain these RINs for all exported gallons and provide the RINs to EPA.

Stoliar admitted that beginning around September of 2009, he and co-defendant James Jariv operated and controlled a company -- City Farm Biofuel in Vancouver, British Columbia, Canada -- that represented itself as a producer of biodiesel from "feedstocks" such as animal fat and vegetable oils. Stoliar and Jariv also formed a company called Canada Feedstock Supply -- that represented itself as City Farm's supplier of feedstocks necessary to produce biodiesel. Jariv operated and controlled a company based in Las Vegas called Global E Marketing or GEM.

"Using these three and other closely-held companies, Stoliar and his codefendants claimed to produce biodiesel at the City Farm facility and to import and sell biodiesel to GEM, and then generated and sold RINs based upon this claimed production, sale and importation," the news Justice Department said.

"In reality, no biodiesel produced at City Farm was ever imported and sold to GEM as claimed," Justice added.

(BM/AG)

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