(July 31, 2014) — Nathan Stoliar, 64, of Australia, pleaded guilty in federal court in Las Vegas on July 29 to five felonies for his role in multiple schemes, worth in excess of $41 million, to generate fraudulent biodiesel credits and to export biodiesel without providing biodiesel credits to the United States as required by law.
Stoliar and fellow defendant James Assi Jariv, who is also awaiting trial on timeshare resale fraud charges in Houston, TX, were charged in January 2014 in a 57-count indictment alleging conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering. Following his indictment, Stoliar’s arrest was sought by the United States. Located in Poland, Stoliar returned in early February to the United States to surrender for arrest. Stoliar pleaded guilty Tuesday to one count of conspiracy, one count of conspiracy to engage in money laundering, two counts of wire fraud and one count of making false statements under the Clean Air Act. Stoliar is required by the plea to forfeit $4 million and pay $1 million in restitution. He faces a maximum sentence of 20 years in prison and a $500,000 fine for each count of conspiracy to engage in money laundering and wire fraud, five years in prison and a $250,000 fine for conspiracy, and two years in prison and a $250,000 fine for making false statements under the Clean Air Act.
“With this guilty plea, the defendant admitted that he participated in a conspiracy to defraud the United States government, specifically the EPA, and that he personally gained more than $7 million from the scheme,” said Dan Bogden, U.S. Attorney for the District of Nevada. “These types of schemes are complex and require an enormous expenditure of resources to investigate and prosecute. Because of the tremendous work of the investigators and prosecutors on this case, we were also able to seize and forfeit from the defendant millions of dollars from bank accounts, as well as real property in Nevada and California, jewelry and other assets.”
Stoliar admitted that beginning around September of 2009, he and co-defendant James Jariv operated and controlled a company — City Farm Biofuel in Vancouver, British Columbia, Canada — that represented itself as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. Stoliar and Jariv also formed a company called Canada Feedstock Supply – that represented itself as City Farm’s supplier of feedstocks necessary to produce biodiesel. Jariv operated and controlled a company based in Las Vegas called Global E Marketing (GEM). Using these three and other closely-held companies, Stoliar and his codefendants claimed to produce biodiesel at the City Farm facility and to import and sell biodiesel to GEM, and then generated and sold RINs based upon this claimed production, sale and importation. In reality, no biodiesel produced at City Farm was ever imported and sold to GEM as claimed. Stoliar and his codefendants used GEM to claim to blend the biodiesel with petroleum diesel, allowing them to sell the RINs separately from any actual biodiesel. Using this scheme, Stoliar and his co-defendants falsely claimed to import, purchase and blend more than 4.2 million gallons of biodiesel. They then sold the RINs, and fraudulently generated more than $7 million.
The indictment also alleges that, beginning around the same time period and continuing through Dec. 31, 2013, Stoliar and Jariv, using their company MJ Biodfuel, bought over 23 million gallons of RIN-less biodiesel that had been blended with small amounts of petroleum diesel to form B-99. The defendants bought the B-99 from unrelated companies in the United States, and this B-99 had been used by other companies to generate and separate RINs from the fuel. Because B-99 cannot be used to again generate a RIN, and because it cannot be used for other tax-related incentives, B-99 sells for substantially less than 100 percent biodiesel (known as B-100). Stoliar sold some of this biodiesel to purchasers in the United States, claiming it was B-100 produced at the City Farm facility and imported into the United States. By claiming this biodiesel was B-100 and not RIN-less B-99, Stoliar marketed the fuel as eligible to be used by purchasers to generate credits and incentives, and Stoliar was able to sell the fuel for as much as $2.30 per gallon more than he otherwise would have been able.
Stoliar and his co-defendants also exported significant amounts of the RIN-less B-99 they bought in the United States to Canada. Stoliar then sold the biodiesel in Canada, and conspired with his co-defendants to not acquire and provide RINs to the United States for these exports as they were required to do by law. In doing so, Stoliar and Jariv failed to give to the United States RINs worth in excess of $34 million, keeping this money for themselves instead.
Finally, Stoliar and Jariv conspired to launder the proceeds of their crimes, utilizing foreign banking institutions and complex financial transactions to promote their illegal schemes and distribute the proceeds of their crimes. Accounts were utilized in Canada, Nevada and Australia, and transactions between the defendants’ closely-held companies were described as other legitimate transactions involving biodiesel, when in reality they were not.
Sentencing for Stoliar has been set for Oct. 30, 2014 in Las Vegas, Nevada.
It remains to be seen if Jariv will also plead guilty to any of the charges in Las Vegas or if he will go forward to trial. No trial date has yet been set in the biofuels fraud case, though the case in Houston is scheduled for trial on December 7, 2014. Jariv and three other defendants in that case each face a four-count indictment alleging conspiracy, wire and mail fraud and money laundering. They allegedly scammed approximately 1000 victims and deposited into eight bank accounts approximately $6,925,137.04 in fraudulently obtained timeshare owner funds.
Five other defendants in that case have already pled guilty to various charges.
PRIMARY SOURCE: Nevada Attorney General’s Office