The U.S. Department of Justice on March 2 said Colorado businessman Matthew Taylor will spend the next seven years in jail for his role in a biodiesel tax credit fraud scheme.
Taylor and his co-conspirators duped the U.S. government by filing false claims for tax credits under a federal program that encourages production and use of renewable fuels.
According to the Justice Department, Taylor created the fake company, Shintan Inc., and between 2010 and 2013 obtained from the IRS more than $7.2 million in tax credits for renewable fuel production, although not a drop of biodiesel fuel was produced by the company.
“Those engaged in this fraud should stop in their tracks and look at the consequences, which include being sent to prison as a convicted felon and paying back all the taxes owed plus steep penalties and interest,” said Andy Tsui, IRS’s criminal investigation special agent, in a statement.
On February 27, Taylor pleaded guilty to one count of conspiracy to defraud the U.S. government and two counts of money laundering.
In addition to prison, U.S. District Chief Judge Philip A. Brimmer ordered Taylor to serve four years of supervised release and to pay $7.2 million in restitution to the U.S. government.
On December 20, 2019, President Trump signed a five-year extension of the $1-per-gallon biodiesel blenders tax credit program. The incentive was established in the 2004 American JOBS Creation Act and subsequently renewed in the years since.
However, over the years the program has suffered from instances of abuse and fraud.
In 2018, a federal grand jury charged CEO Jacob Kingston and CFO Isiah Kingston of Utah-based Washakie Renewable Energy for illicitly obtaining more than $511 million in biodiesel renewable tax credits from the IRS. The former company once described itself as the “largest producer of biodiesel and chemicals in the intermountain west,” the Justice Department said.