Camp Hill, PA – In a landmark case highlighting fraud within the renewable fuels industry, Keystone BioFuels Inc., along with its former executives, Ben Wootton and Race Miner, were sentenced in October 2020 following a jury conviction in April 2019. The case, prosecuted in Pennsylvania, marks the first federal prosecution centered on fraudulent claims under the nation’s renewable fuels program involving fuel that failed to meet required quality standards.
The scheme, perpetrated by Wootton, Miner, and the company, revolved around the false representation of biodiesel production capabilities. They claimed to manufacture fuel meeting the stringent requirements set by the American Society for Testing and Materials (ASTM) and adopted by the Environmental Protection Agency (EPA). This allowed Keystone to illegally generate Renewable Identification Numbers (RINs) – credits assigned to each gallon of renewable fuel produced – and sell them within the federal renewable fuels market. These RINs, along with the fuel itself, hold significant financial value.
Beyond the fraudulent RIN claims, Wootton and Miner were convicted of defrauding the Internal Revenue Service (IRS) by falsely claiming biofuel mixture credits. These “blender’s credits” are intended for businesses that mix biodiesel with conventional diesel fuel. However, the pair submitted claims based on non-qualifying fuel and, in some instances, fuel that was entirely fictitious or never actually mixed. To conceal the operation, they fabricated corporate records and engaged in sham financial transactions, attempting to create a veneer of legitimacy for their illicit activity.
Race Miner, founder and CEO of Keystone BioFuels, and Ben Wootton, the company’s president and a former member of the National Biodiesel Board, knowingly misled regulators and investors. The company initially operated out of Shiremanstown, Pennsylvania, before relocating to Camp Hill. Their actions not only defrauded the federal government and the Pennsylvania Department of Environmental Protection, but also undermined the integrity of the renewable fuels program, designed to promote sustainable energy sources.
Legal Ramifications
Ben Wootton received a 70-month prison sentence, while Race Miner was sentenced to 66 months. Both were ordered to pay a combined restitution of $4,149,383.41 to the IRS and $5,076,376.07 to the Pennsylvania Department of Environmental Protection. They will also serve a three-year term of supervised release following their incarceration. Keystone BioFuels Inc. itself was sentenced to five years of probation and ordered to pay the same restitution amounts to both the IRS and the Pennsylvania DEP.
The legal violations included 18 U.S.C. 1001 (false statements), 26 U.S.C. 7206(2) (fraudulent tax claims), and 18 U.S.C. 371 (conspiracy to commit fraud). This case serves as a stark warning to others operating within the renewable fuels sector, demonstrating that fraudulent activity will be vigorously prosecuted.
Key Facts
- Defendant: Keystone BioFuels Inc., Ben Wootton, Race Miner
- Location: Shiremanstown/Camp Hill, Pennsylvania
- Crime: Fraudulent claims related to biodiesel production and renewable fuel credits (RINs).
- Sentencing (Wootton): 70 months incarceration, restitution of $9,225,759.48, 3 years supervised release
- Sentencing (Miner): 66 months incarceration, restitution of $9,225,759.48, 3 years supervised release
- Company Penalty: 5 years probation, restitution of $9,225,759.48
- Laws Violated: 18 U.S.C. 1001, 26 U.S.C. 7206(2), 18 U.S.C. 371
- Significance: First federal prosecution of its kind under the renewable fuels program.
Source: EPA ECHO Enforcement Case Database
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