SPOKANE, Wash --- A Pasco native is sentenced to seven years in jail and fined almost $16 million for fraud in a lawsuit Thursday.
Scott Johnson plead guilty to conspiracy to defraud the government and conspiracy to commit wire fraud in 2015 and was sentenced today. Johnson will serve 97 months in jail with three years of court supervision after that, and is ordered to pay $9.5 million in restitution to the U.S. taxpayers and an additional $6 million to the victims of his fraud.
According to information from the court proceedings, Johnson was a member of a conspiracy involving Gen-X Energy Group, Inc. It is a renewable energy company formerly located in Pasco and Moses Lake, Washington. Between 2012 and 2015 the conspirators falsely claimed production of more than 72 million marketable renewable energy credits that they sold for more than $57 million and filed false claims with the IRS for around $9.5 million in credit refunds. During this time, much of the renewable fuel claimed to be produced at the Gen-X facilities was either not produced or re-processed multiple times.
“The United States Attorney’s Office for the Eastern District of Washington is, and will continue to be, committed to prosecuting aggressively and seeking appropriate punishment for white collar crimes. I commend the tenacious and thorough efforts of the IRS-Criminal Investigation and the Environmental Protection Agency’s Criminal Investigation Division,” said acting U.S. Attorney Joseph Harrington.
“American taxpayers and the biofuels industry were defrauded more than $65 million as a result of this massive and elaborate scheme,” said Jeanne M. Proctor, Special Agent in Charge of EPA’s criminal program in Washington State. Proctor went on to state: “EPA is committed to ensuring a level playing field for biofuels companies that play by the rules and pursuing those that blatantly disregard the law.”
The investigation was conducted by the Internal Revenue Service-Criminal Investigation, the Environmental Protection Agency’s Criminal Investigation Division and the U.S. Secret Service with assistance from the Washington State Patrol.