ORLANDO, FL – Andre Bernard, of Mount Kisco, New York, has confessed to his role in a brazen, multi-state biodiesel fraud scheme that bilked buyers and U.S. taxpayers out of at least $42 million. The guilty plea, entered today, pulls back the curtain on a sophisticated operation involving phantom fuel and a network of shell companies designed to launder illicit profits.
Federal prosecutors revealed Bernard conspired with Thomas Davanzo, of Estero, Florida; Robert Fedyna, of Naples, Florida; and Scott Johnson of Pasco, Washington. The quartet allegedly used Gen-X Energy Group (Gen-X), based in Pasco, Washington, and its subsidiary, Southern Resources and Commodities (SRC) in Dublin, Georgia, as the central hubs for the fraud. They repeatedly generated Renewable Identification Number (RIN) credits – and subsequently, tax credits – on the same batches of material, effectively creating money from nothing.
The scheme, operating from March 2013 to March 2014, revolved around a series of shell companies established by Bernard and his co-conspirators. These entities falsely claimed to be purchasing and selling renewable fuel, masking the true nature of the transactions and funneling the stolen funds through a complex web of bank accounts. The goal? To perpetuate the fraud and hide the enormous sums being illegally generated.
Investigators determined the group manufactured at least 60 million fraudulent RINs based on fuel that was either never produced or simply re-processed at Gen-X and SRC facilities. These bogus credits were then sold to unsuspecting third parties, netting the co-conspirators a staggering $42 million. Adding insult to injury, Gen-X also pocketed approximately $4,360,724.50 in false tax credits, directly draining resources from American taxpayers.
The U.S. Secret Service took the lead on the investigation, working in tandem with the Environmental Protection Agency Criminal Investigation Division and the Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Sara C. Sweeney of the Middle District of Florida, along with Trial Attorney Adam Cullman of the Department of Justice’s Environment and Natural Resources Division, spearheaded the prosecution, meticulously building the case against Bernard and his accomplices.
While Bernard has now admitted his guilt, the investigation remains ongoing. Sources close to the case indicate further charges and potential convictions are likely as authorities continue to untangle the full scope of this elaborate and costly fraud. The Justice Department has yet to announce sentencing details for Bernard, but the scale of the deception suggests a substantial prison term is forthcoming.
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Key Facts
- Agency: U.S. Secret Service
- Category: Fraud & Financial Crimes
- Source: Official Press Release
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