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Biodiesel Mogul Sentenced for Tax Fraud
A Bloomfield, Michigan, businessman, Chandra Yarlagadda, has been sentenced to 30 months in prison for filing a false income tax return.
Yarlagadda owned and operated Alpha Bioenergy LLC, a biodiesel fuel company that purchased and sold biodiesel fuel. Under the Clean Air Act and related federal regulations, companies like Alpha that exported biodiesel fuel were required to purchase and retire Renewable Identification Numbers (RINs) for any volume of renewable fuel they exported.
According to court documents, Yarlagadda reported income and expenses associated with Alpha on Schedules C attached to his personal income tax returns. However, he substantially overstated expenses associated with the purchase of RINs on his 2009, 2010, and 2011 tax returns.
Yarlagadda admitted as part of his plea that he reported RIN expenses totaling more than $14.2 million, when, in fact, he was only entitled to claim approximately $80,000 in RIN expenses for those years. He admitted that if he had not claimed these false deductions, he would have owed an additional $2.3 million in federal income taxes.
U.S. District Judge Gershwin A. Drain also ordered Yarlagadda to serve one year of supervised release and pay restitution to the IRS in the amount of $3,285,303.
Acting Deputy Assistant Attorney General Stuart M. Goldberg and Acting U.S. Attorney Saima S. Mohsin made the announcement. The investigation was conducted by IRS Criminal Investigation, the U.S. Environmental Protection Agency – Criminal Investigation Division, and U.S. Immigration and Customs Enforcement – Homeland Security Investigations.
Yarlagadda’s case was prosecuted by Trial Attorneys Melissa S. Siskind and Sarah C. Ranney of the Tax Division, with the assistance of Assistant U.S. Attorney Stephen Hiyama of the Eastern District of Michigan.
Key Facts
- State: Michigan
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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