Camp Hill, PA – In a landmark case marking the first federal prosecution of its kind under the renewable fuels program, Keystone BioFuels Inc., along with its former executives, Ben Wootton and Race Miner, have been sentenced for a multi-million dollar fraud scheme involving the falsification of biodiesel production records. The case, originating in Shiremanstown and later Camp Hill, Pennsylvania, exposed a deliberate effort to illegally generate renewable fuel credits (RINs) and claim undeserved tax refunds.
According to court documents, Wootton, who previously served on the National Biodiesel Board, and Miner, founder and CEO of Keystone, knowingly misrepresented the quality of their fuel production. They falsely certified that their biodiesel met the rigorous standards set by the American Society for Testing and Materials (ASTM) – standards adopted by the Environmental Protection Agency (EPA) – allowing them to fraudulently obtain RINs. These credits, representing each gallon of purportedly renewable fuel, hold significant financial value within the federal renewable fuels market.
The deception extended beyond RINs. The pair also fraudulently claimed federal tax refunds through the IRS’s Biofuel Mixture Credit, a “blender’s credit” designed to incentivize the mixing of biodiesel with diesel fuel. Prosecutors proved that Keystone claimed refunds for non-qualifying fuel, and in some instances, for fuel that was never produced or mixed at all. To conceal the scheme, Wootton and Miner fabricated corporate books, records, and sham financial transactions, attempting to create a false appearance of legitimacy.
The elaborate fraud was ultimately uncovered, leading to a jury conviction in April 2019. On October 20, 2020, Wootton received a 70-month prison sentence, while Miner was sentenced to 66 months. The company, Keystone BioFuels Inc., was sentenced to five years’ probation. The court ordered both men, and the company, to pay substantial restitution totaling over $9.2 million. Specifically, $4,149,383.41 is to be paid to the IRS and $5,076,376.07 to the Pennsylvania Department of Environmental Protection.
Legal Ramifications
The defendants were convicted of violating multiple federal statutes, including 18 U.S.C. 1001 (False Statements), 26 U.S.C. 7206(2) (Fraud and False Statements), and 18 U.S.C. 371 (Conspiracy to Commit Offense or Fraud).
Key Facts
- Defendants: Ben Wootton, Race Miner, Keystone BioFuels Inc.
- Location: Shiremanstown/Camp Hill, Pennsylvania
- Fraudulent Activity: Falsifying biodiesel quality to generate Renewable Identification Numbers (RINs) and claim fraudulent tax credits.
- Restitution: Over $9.2 million to the IRS and the Pennsylvania Department of Environmental Protection.
- Sentencing: Wootton – 70 months, Miner – 66 months, Keystone – 5 years probation.
- Significance: First federal prosecution of its kind under the renewable fuels program based on fuel quality standards.
This case serves as a stark warning to those seeking to exploit the renewable fuels market. Federal authorities are increasingly scrutinizing claims of renewable fuel production, and those who attempt to defraud the system will face severe consequences. The prosecution highlights the importance of accurate reporting and adherence to quality standards within the burgeoning renewable energy sector.
Source: EPA ECHO Enforcement Case Database
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