HOUSTON, TX – After eight years as a federal fugitive, Yousef Ishaq Abuteir, 58, has been sentenced to 60 months in federal prison for his role in a multi-million dollar fuel excise tax scheme. Abuteir, along with co-conspirators, allegedly evaded over $3.3 million in federal taxes by falsely claiming kerosene purchased from a Louisiana refinery was intended for export, when in reality it was blended with other substances and sold as diesel fuel to retail gas stations in the Houston area.
The elaborate scheme, executed between October 2001 and November 2003, involved acquiring kerosene from Calcasieu Refinery in Lake Charles, Louisiana, without paying the required federal excise taxes. The defendants then transported the fuel to Houston where it was mixed with middle distillate oil – a byproduct of asphalt production – creating a blend deceptively sold to consumers as diesel. Retail stations, unknowingly or complicitly, collected the federal diesel fuel excise tax at the pump, while the initial tax obligation had been fraudulently avoided.
Abuteir was initially charged on July 9, 2007, and pleaded guilty on April 14, 2008. However, he fled the country before sentencing, prompting the issuance of a federal arrest warrant in February 2009 and an Interpol Red Notice. He was finally located in Israel in 2014 and extradited back to the United States to face justice. U.S. District Judge David Hittner ordered Abuteir to pay $3,328,459 in restitution to the IRS in addition to the prison sentence.
Related Investigations
Abuteir’s sentencing marks the conclusion of a series of related fuel tax investigations. Sidney Berle Baldon II and Tracy Dale Diamond, co-conspirators in the original scheme, previously pleaded guilty and received prison sentences of 60 months and 12 months plus one day, respectively, and were also ordered to pay over $3 million in restitution. A separate investigation in 2011 led to guilty pleas from Assad Boulos, Talaat Boulos, and Youssef Georges, who engaged in a similar scheme involving the same refinery, receiving probationary sentences and ordered to pay $650,000 in restitution.
Environmental Impact & Law Enforcement Collaboration
While the case originated as a tax fraud investigation, the Environmental Protection Agency (EPA) played a crucial role in Abuteir’s capture and prosecution. The EPA added Abuteir to its Most Wanted List in 2010, highlighting the potential environmental consequences of the illegal fuel blending and distribution. The agency emphasized that such actions jeopardize public health and the environment. The successful apprehension of Abuteir was a collaborative effort involving the IRS-Criminal Investigation, Immigration and Customs Enforcement, the Department of Transportation, the U.S. Marshals Service, the Travis County District Attorney’s Office, and the State of Texas Comptroller’s Agency.
Legal Ramifications
Abuteir was convicted under Title 18 U.S. Criminal Code, specifically 18 U.S.C. 371 – Conspiracy to Defraud the United States. This statute carries a maximum penalty of five years in prison. However, due to the scale of the fraud and Abuteir’s flight from justice, Judge Hittner imposed a 60-month sentence, along with the substantial restitution order. IRS-Criminal Investigation Special Agent in Charge Rick Goss stated, “The defendant and his cohorts lined their pockets and scammed the American tax payers out of millions of dollars.” EPA Special Agent in Charge Christopher Brooks added, “This case shows that EPA and its law enforcement partners are committed to making sure that fugitives who break our environmental laws are brought to justice.”
Key Facts
- Defendant: Yousef Ishaq Abuteir, 58
- Crime: Conspiracy to Defraud the United States (Fuel Tax Fraud)
- Location: Texas & Louisiana
- Years Active: 2001-2003 (scheme), 2007-2016 (legal proceedings/fugitive status)
- Amount of Fraud: Over $3.3 million in evaded federal fuel excise taxes
- Sentence: 60 months in federal prison, $3,328,459 restitution
- Statute Violated: 18 U.S.C. 371
Source: EPA ECHO Enforcement Case Database
Related Federal Cases
- Yousef Abuteir, Fuel Tax Fraud, TX 2016 · North Carolina
- Thomas Johnson, Tax Fraud, Florida 2023 · Florida
- Greensboro Tax Man Flythe, Tax Fraud, North Carolina 2023 · Alabama
- John Barry Jr, Tax Return Fraud, New Jersey 2023 · North Carolina
- Sarah J. Broussard, Wire Fraud, Tax Evasion, Louisiana 2018 · Louisiana
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