William Letona, Obstruction of a Federal Grand Jury Investigation, Ohio 2017

CINCINNATI, OH – William Letona, an employee of now-defunct Unity Fuels, was sentenced in May 2017 to six months of community confinement followed by six months of home detention for his role in obstructing a federal grand jury investigation. The case, stemming from a complex Renewable Identification Number (RIN) fraud scheme involving the mislabeling of non-renewable biomass as “recycled vegetable oil,” highlights the lengths to which company insiders will go to cover up illicit activity.

According to court documents, Unity Fuels, co-owned by Malek Jalal, collected used cooking oil and sold it to biodiesel producers. However, beginning in 2011, Jalal allegedly conspired with others to fraudulently inflate profits by purchasing unprocessed “biomass” and then illegally selling it as recycled vegetable oil to “Company A.” This deceptive practice allowed the company to generate and claim multiple RINs – credits used for compliance with the Renewable Fuel Standard – and corresponding tax credits on the same material, effectively doubling their profits. The scheme involved knowingly misrepresenting the source and nature of the fuel to regulatory bodies.

The scheme began to unravel in June 2014 when Jalal received a subpoena duces tecum, a legal order compelling the production of documents. Rather than complying with the investigation, Jalal allegedly ordered the alteration and falsification of records related to Unity’s biomass purchases. Letona directly assisted in this obstruction, actively participating in the destruction of crucial evidence following the receipt of the subpoena. This attempt to impede the grand jury’s inquiry formed the basis of Letona’s criminal charge.

Federal investigators from the IRS Criminal Investigation and the U.S. Environmental Protection Agency (EPA) Criminal Investigation Division uncovered the scheme. The investigation revealed a deliberate effort to deceive biodiesel producers and the government, capitalizing on a system designed to promote renewable energy. Jalal’s actions not only defrauded companies like Pasadena Refining and Hess Corporation but also undermined the integrity of the RIN system itself.

Jalal, the principal architect of the fraud, received a harsher sentence in April 2017 – 60 months of incarceration, three years of supervised release, a $12,500 fine, and $1,017,087 in restitution. The restitution is to be divided among the defrauded companies and the IRS. Letona’s sentence, while significantly lighter, reflects his acknowledged participation in the cover-up. He was also ordered to perform 100 hours of community service.

Key Facts

• Defendant: William Letona
• State: Ohio
• Year: 2017
• Statutes Violated: 18 U.S.C. 371 (Conspiracy), 18 U.S.C. 1519 (Obstruction of Justice)
• Penalty (Letona): 6 months community confinement, 6 months home detention, 3 years supervised release, 100 hours community service.
• Penalty (Jalal): 60 months incarceration, 3 years supervised release, $12,500 fine, $1,017,087 restitution.
• Scheme Involved: Mislabeling of biomass as recycled vegetable oil to fraudulently claim RINs and tax credits.

This case serves as a stark reminder that environmental crimes, particularly those involving fraudulent schemes, are taken seriously by federal authorities. The investigation and subsequent prosecutions demonstrate a commitment to upholding the integrity of renewable fuel programs and ensuring accountability for those who attempt to manipulate the system for personal gain. The EPA’s Criminal Investigation Division continues to work with the Department of Justice to pursue perpetrators of environmental fraud nationwide.

Source: EPA ECHO Enforcement Case Database

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