Colorado fraudster sentenced for biodiesel tax credit scheme

By U.S. Department of Justice | March 03, 2020

A Colorado resident was sentenced to 83 months in prison Feb. 28 for his role in a biodiesel tax credit fraud scheme, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to court documents and statements made in court, Matthew Taylor and his coconspirators defrauded the U.S. by filing false claims for tax credits under a federal program that encourages production and use of renewable fuels. They created a fake company, Shintan Inc., that purported to be in the business of creating renewable fuels. From 2010 to 2013, the coconspirators then sought and obtained from the Internal Revenue Service more than $7.2 million in tax credits for renewable fuel produced, of which Taylor personally received $4.5 million. In fact, Shintan produced no qualifying renewable fuel. To avoid detection, Taylor and coconspirators transferred the fraudulently obtained funds through a series of bank accounts belonging to Shintan and other shell companies.

“Filing false renewable fuel tax credit claims is not just a crime against the IRS but a crime against all taxpaying citizens,” said Andy Tsui, the IRS criminal investigation special agent in charge. “Those engaged in this fraud should stop in their tracks and look at the consequences, which include being sent to prison as a convicted felon and paying back all the taxes owed plus steep penalties and interest.”

“Friday’s sentencing shows the severe consequences for those who try to profit by defrauding renewable fuels programs,” said Lance Ehrig, acting special agent in charge of the U.S. EPA’s criminal enforcement program in Colorado. “EPA and our law enforcement partners are committed to holding accountable those who seek to defraud taxpayers for personal profit.”

On Feb. 27, 2019, Taylor pleaded guilty to one count of conspiracy to defraud the U.S., one count of conspiracy to commit money laundering, and one count of money laundering.

In addition to the term of imprisonment imposed, U.S. District Chief Judge Philip A. Brimmer ordered Taylor to serve four years of supervised release and to pay approximately $7.2 million in restitution to the U.S.

Zuckerman thanked special agents of the IRS and EPA who conducted the investigation, and trial attorneys Sarah A. Kiewlicz and Stephen K. Moulton of the tax division, who prosecuted the case.

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