A Pasco businessman was sentenced to eight years in federal prison for defrauding the government out of millions of dollars in tax credits.
Scott Johnson, 43, of Pasco, was sentenced after having previously pled guilty on Nov. 24, 2015, to conspiracy to defraud the government and conspiracy to commit wire fraud.
U.S. District Judge Salvador Mendoza Jr. ordered Johnson’s federal prison sentence to be followed by three years of court supervision after he is released.
In addition, Mendoza ordered him to pay $9.5 million in restitution to U.S. taxpayers and an additional $6.2 million in restitution to the victims of his fraud.
Johnson was a member of a conspiracy involving Gen-X Energy Group, a renewable energy company formerly located in Pasco and Moses Lake, according to information disclosed during the court proceedings.
Between October 2012 and April 2015, Johnson and his co-conspirators falsely claimed the production of more than 72 million marketable renewable energy credits, which they then sold for more than $57 million. They also filed false claims with the Internal Revenue Service for more than $9.5 million in excise credit refunds.
Throughout this period, much of the renewable fuel claimed to be produced at the Gen-X facilities was either not produced or re-processed multiple times.
“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 the Environmental Protection Agency’s criminal program in Washington. “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.”
“This is a classic case of an individual who allowed his own unfettered greed to guide his duplicitous actions,” said Special Agent in Charge Darrell Waldon of IRS Criminal Investigation.
This investigation was conducted by the IRS-Criminal Investigation, the EPA’s Criminal Investigation Division and the U.S. Secret Service, with assistance from the Washington State Patrol.
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