Hector Garza Jr., Renewable Energy Fraud, Washington 2019

A Richland couple and their companies, HTG Trucking LLC and Freedom Fuel Inc., were sentenced yesterday in federal court in Richland, Washington for fraud and false statement charges in connection with a renewable energy fraud scheme.

Hector Garza Jr., 49, was sentenced to two years in prison to be followed by a three-year term of supervised release. Tammy Garza, 38, was sentenced to four months in prison and one year of supervised release. HTG Trucking LLC and Freedom Fuel Inc. were placed on probation for three years. All of the defendants were ordered to pay restitution to the U.S. Treasury of $284,546 and a $100,000 fine.

The Garza couple and their companies were participants in a conspiracy involving Gen-X Energy Group Inc. (Gen-X), a renewable energy company formerly located in Pasco and Moses Lake, Washington. Between January 2013 and April 2013, Hector Garza and his co-conspirators falsely claimed the production of hundreds of thousands of marketable renewable energy credits, which they then sold for more than $296,000, and filed false claims with the IRS for $284,546 in excise credit refunds.

During this period, much of the renewable fuel claimed to be produced at the Gen-X facilities was either not produced or it was re-processed multiple times.

Hector Garza, HTG Trucking and Freedom Fuel pled guilty to conspiring to defraud the United States with respect to the false claims made to the IRS, through the use of the Garzas’ companies, which were used to “round” supposed renewable fuel by driving the same material back and forth between Gen-X’s Moses Lake facility and the Garzas’ businesses in Othello, Washington.

This activity enabled the conspirators to generate fraudulent renewable energy credits and tax credits each time the material was “rounded.” Tammy Garza pled guilty to a separate offense of aiding and abetting the use of false statements in connection with the renewable energy credits that were claimed and sold as part of the scheme.

The case was prosecuted by Assistant U.S. Attorney Dan Fruchter of the Eastern District of Washington; EPA Regional Criminal Enforcement Counsel and Special Assistant U.S. Attorney Karla G. Perrin for the Eastern District of Washington and Senior Trial Attorney Jennifer Leigh Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section.

The IRS-Criminal Investigation and the Environmental Protection Agency’s Criminal Investigation Division investigated the case.

Source: https://www.justice.gov/archives/opa/pr/washington-state-couple-and-companies-sentenced-fraud-and-false-statement-connection