Houston businessman Philip Joseph Rivkin has been sentenced to over ten years in federal prison for orchestrating a multi-million dollar fraud scheme involving the nation’s renewable fuel program. Rivkin, who also operated under the alias Felipe Poitan Arriaga, was sentenced on March 7, 2016, to 121 months incarceration, three years of supervised release, and a staggering financial penalty exceeding $138 million – encompassing over $87 million in restitution and a $51 million forfeiture order.
The scheme, which began around February 2009, centered on Rivkin’s companies – Green Diesel LLC, Fuel Streamers Inc., and Petro Constructors LLC – all based in Houston, Texas. Rivkin falsely claimed to be producing millions of gallons of biodiesel at Green Diesel’s facility. This fabricated production allowed him to generate and sell Renewable Identification Numbers (RINs), credits awarded for the production of renewable fuels like biodiesel. These RINs are valuable commodities, required by other companies to meet regulatory obligations under the Energy Independence and Security Act of 2007.
However, investigators with the Environmental Protection Agency’s Criminal Investigation Division, alongside the U.S. Secret Service, IRS-Criminal Investigation, and Homeland Security Investigations, discovered that no actual biodiesel was ever produced at the Green Diesel facility. Rivkin created a phantom operation, generating over 60 million fraudulent RINs which were then sold on the open market, netting him substantial profits. The investigation revealed a complex web of false records and deliberate misrepresentations designed to conceal the scheme from regulators.
Legal Ramifications
Rivkin pleaded guilty in June 2015 to one count of mail fraud (18 U.S.C. 1341) and one count of making a false statement under the Clean Air Act (42 U.S.C. 7413(c)(2)(A)). The mail fraud charge carries a maximum sentence of 20 years, while the Clean Air Act violation carries a maximum of five years. The court ultimately imposed a 121-month sentence, reflecting the scale and brazen nature of the fraud. The substantial restitution and forfeiture orders aim to recover funds obtained through the illegal operation and compensate those harmed by the scheme.
A Blow to Renewable Energy Integrity
Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division emphasized the severity of the crime, stating Rivkin’s actions were “an abuse against the American people.” He stressed that the sentence should serve as a deterrent to others contemplating similar fraudulent schemes. Assistant Administrator Cynthia Giles of the EPA echoed this sentiment, highlighting the importance of upholding the integrity of programs designed to promote energy independence and combat climate change.
International Cooperation
The investigation wasn’t limited to domestic efforts. Federal investigators collaborated with the Guatemalan Special Investigations Unit to verify Rivkin’s citizenship, ultimately leading to his deportation back to the United States to face charges. This international cooperation proved crucial in bringing Rivkin to justice.
Key Facts
- Defendant: Philip Joseph Rivkin (aka Felipe Poitan Arriaga)
- Location: Houston, Texas
- Crime: Biodiesel Fraud, generating and selling fraudulent renewable fuel credits (RINs)
- Statutes Violated: 18 U.S.C. 1341 (Mail Fraud), 42 U.S.C. 7413(c)(2)(A) (Clean Air Act)
- Sentence: 121 months imprisonment, 3 years supervised release, $87M+ restitution, $51M forfeiture
- Fraudulent RINs Generated: Over 60 million
The case was prosecuted by Trial Attorney Leslie E. Lehnert of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, demonstrating the federal government’s commitment to pursuing and punishing environmental crimes and protecting the integrity of vital renewable energy programs.
Source: EPA ECHO Enforcement Case Database
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