Eugene con man sentenced in $1.4 million biodiesel fraud scheme
On May 5, U.S. District Court Judge Anna J. Brown sentenced Jack Holden, 76, of Eugene, Oregon, to 87 months in prison, restitution of $1,410,760, and a special assessment of $1,500 for his role in a fraudulent biodiesel scheme that spanned three continents. Holden was convicted of conspiracy to commit mail and wire fraud, conspiracy to commit money laundering, mail and wire fraud, and money laundering, after a three-week federal trial in October 2015. His codefendant, Lloyd Benton Sharp, aka Kevin Thomas, 81, pled guilty to conspiracy to commit mail and wire fraud Nov. 19, 2014, and was sentenced to 60 months in prison on April 17, 2015.
Between July 2007 and September 2013, Holden and coconspirator Sharp conspired to defraud 12 investors in a project to produce biodiesel fuel in the West African nation of Ghana. When the investment project failed, Holden and Sharp continued to defraud the same investors by soliciting additional funds for a nonexistent project to transport biodiesel fuel from Argentina to Chile, and to build biodiesel refineries in Chile. Holden and Sharp targeted a Christian men’s group in West Linn, Oregon as part of the fraud scheme.
Holden and Sharp falsely told investors that $350,000 was needed to set up a biodiesel plant in Ghana, purchase feedstock for the plant, and bring in an engineer to oversee the operation. They falsely promised that the Ghana refinery would be up and running within two months of receiving the investment funds. Holden and Sharp falsely told investors that if they each made a $50,000 investment, they would each receive a return of $7,000 per month for an indefinite period of time as soon as the biodiesel refinery was operational. They also told victims that their investments would help fund humanitarian projects, like building roads and schools in the poor nation of Ghana. Investors were promised that they could get 100 percent of their money back at any time. The victims in this case sent investment funds to Holden and Sharp via mail or interstate wire transfers. Rather than using the investment funds to produce and sell biodiesel fuel in Ghana as promised, Holden and Sharp spent the money on their personal expenses.
When investors inquired of Holden and Sharp why the Ghana refinery was not operating, the two claimed they had a more promising investment opportunity in Chile, and that a successful investment in Chile would provide sufficient funds to get the Ghana refinery operational. Holden and Sharp solicited and received additional funds from investors for the Chile projects by falsely promising that for $100,000 they would double their investment and receive a return of funds within 120 days. After the Chile investments were made, Holden and Sharp stole the money, and again used it for their personal benefit.
Between the Ghana and Chile projects, 12 investors lost approximately $1.47 million. U.S. Attorney Billy J. Williams said, “Individuals who use deception to bilk investors out of their hard-earned money in fraud schemes such as this will be prosecuted to the full extent of the law. We are grateful to the U.S. Postal Inspection Service and the Oregon Division of Financial Regulation for their vigilance in prosecuting this case and in protecting the public from fraud.”
Tony Galetti, Inspector in Charge, Seattle Division, U.S. Postal Inspection Service stated, “The U.S. Postal Inspection Service makes consumer fraud investigations one of our top priorities. The cooperation between the Oregon Division of Financial Regulation, the U.S. Attorney’s Office, and the U.S. Postal Inspection Service in the prosecution of Holden and Sharp resulted in a great victory for Oregon consumers. The fraud perpetrated by the defendants in this case is the worst kind of fraud, in that they exploited the trust of innocent victims, in some cases stealing life savings. The U.S. Postal Inspection Service continues, in collaboration with our regulatory and law enforcement partners, to tirelessly identify and root out consumer fraud involving the U.S. Mail which affects the American public.”
The case was investigated by the U.S. Postal Inspection Service and the Oregon Division of Financial Regulation (formerly DFCS). Assistant U.S. Attorneys Claire M. Fay and Donna B. Maddux prosecuted the case.