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Michigan Biodiesel Dealer Accused of Tax Fraud
A Bloomfield, Michigan, biodiesel fuel dealer has pleaded guilty to filing a false income tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Tax Division and U.S. Attorney Matthew Schneider of the Eastern District of Michigan.
Chandra Yarlagadda, 54, owned and operated Alpha Bioenergy LLC (Alpha), formerly known as Naturol Bioenergy LLC, which purchased and sold biodiesel fuel. As part of his plea, Yarlagadda admitted that he substantially overstated expenses associated with the purchase of Renewable Identification Numbers (RINs) on Schedules C attached to his personal income tax returns.
Yarlagadda falsely reported RIN expenses totaling more than $14.2 million for the years 2009, 2010, and 2011. In fact, he was only entitled to claim approximately $80,000 in RIN expenses for those years. By claiming these inflated deductions, Yarlagadda avoided paying an additional $2.3 million in federal income taxes that was due.
U.S. District Judge Gershwin A. Drain set sentencing for March 19, 2020. Yarlagadda faces a maximum term of imprisonment of three years, as well as a term of supervised release and a fine. As part of his plea agreement, Yarlagadda agreed to pay restitution to the Internal Revenue Service (IRS) in the amount of $2,310,948.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Schneider thanked special agents of IRS Criminal Investigation, the U.S. Environmental Protection Agency – Criminal Investigation Division, and Homeland Security Investigations, who conducted the investigation, and Trial Attorneys Melissa S. Siskind and Sarah C. Ranney of the Tax Division who are prosecuting the case, and Assistant United States Attorney Stephen Hiyama of the Eastern District of Michigan who provided substantial assistance in this matter.
The case is a reminder of the importance of accurate tax reporting and the consequences of attempting to cheat the system. As the investigation and prosecution of tax crimes continue, the Tax Division remains committed to holding individuals accountable for their actions.
The Tax Division’s enforcement efforts can be found on their website.
Key Facts
- State: Michigan
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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