David Dunham, the owner of a biofuel company was sentenced to seven years in prison for defrauding multiple federal agencies and customers. Dunham, owner of Smarter Fuel LLC in Wind Gap, Pennsylvania and co-owner of Greenworks Holdings LLC of Allentown, Pennsylvania, was convicted of conspiracy to commit wire fraud and defraud the United States; wire fraud; filing false tax documents and obstruction of justice.
His prison sentence will be followed by a three-year term of supervised release and ordered to pay $10,207,000 in restitution for defrauding multiple federal agencies and customers.
According to the Department of Justice (DOJ), Dunham planned and executed a scheme to defraud the Environmental Protection Agency (EPA), the IRS, the U.S. Department of Agriculture (USDA), and his customers, to obtain renewable fuel credits in his “green energy” business.
To carry out his green energy scam, according to the DOJ, from 2010 to 2015 Dunham fraudulently applied for, received, and sold EPA “credits” for producing biofuels that he, in fact, did not produce and, in many instances, had never possessed in the first place. Dunham also sought and received millions of dollars from the IRS and the USDA based on the same falsehoods. All told, based on the repeated falsehoods he told the federal agencies, Dunham obtained nearly $50 million in fraudulent revenue. In carrying out this massive fraud, Dunham used his businesses, Smarter Fuel, which he owned, and Greenworks Holdings, which he operated with his co-defendant, Ralph Tomasso, who previously pleaded guilty to conspiracy to defraud federal programs.
The evidence at trial also showed that Dunham engaged in multiple cover-ups designed to hide his crimes from authorities. These included altering his accounting records the day before an IRS audit in 2010, and providing a USDA auditor with dozens of falsified records, which Dunham had ordered an employee to produce, during a 2012 audit.
The case was investigated by the EPA’s Criminal Investigation Division, the IRS Criminal Investigation, and the USDA’s Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Mary E. Crawley and Trial Attorney Adam Cullman of the Environment and Natural Resources Division.