http://www.naplesnews.com/story/news/crime/2016/11/07/wealthy-florida-businessmen-sentenced-10-plus-years-prison-biofuel-scam/93455268/
Wealthy Florida businessmen sentenced to 10-plus years in prison for
biofuel scam
Brett Murphy
9:22 p.m. EST November 7, 2016
A federal judge sentenced two Florida men to 10-plus years in prison for
their part in a $46 million scheme that defrauded government agencies
and the renewable energy industry in 2013 and 2014.
Federal Court Judge Sheri Polster Chappell sentenced Estero resident
Thomas Davanzo and Naples-area resident Robert Fedyna on Monday after
both had pleaded guilty to money laundering and wire fraud in June.
Part of their plea included cooperating in turning over their assets
toward restitution and potentially bringing charges against other
members of the conspiracy.
Davanzo got 11 years and Fednya 10. Both received three years'
probation, as well as more than $4 million each in restitution to the
government.
"This was sophisticated and extensive," Chappell said before handing
down her sentence. She rejected both defenses' attempts for a
substantially lower sentence. "You weren't just doctoring the books here."
Davanzo and Fednya, longtime friends and business partners who had
matching Rolex watches Fednya had bought as gifts, helped orchestrate
the conspiracy by bilking the Environmental Protection Agency and the
Internal Revenue Service through its renewable fuel credit system and
then laundering the money, according to federal court filings.
The pair created shell companies that bought and sold phony biofuel from
each other and then collected EPA incentive bonuses for each
transaction, part of a federal program to encourage petroleum producers
to buy from renewable energy producers. They hired truckers to circle
back between the fake companies to appear as if actual deliveries were
being made. The base of their operations was Washington state biofuel
company Gen-X Energy Groups.
According to an indictment filed last year, Davanzo and Fedyna scattered
these shell companies all over the country, including two with a
registered address at a suite in Coconut Point mall. The pair cycled
what they called biofuels back and forth between the paper companies.
With each cycle of the old product, Gen-X Energy Groups falsely claimed
it had generated new biofuels, receiving new alternative fuel and IRS
tax credits.
In court Monday, Assistant United States Attorney Sarah Sweeney called
it a "seriously corrosive and persistent" fraud scheme that deserved a
serious judgment given the "massive amount of effort behind it,"
regardless of each man's remorse now.
They "took advantage of this system designed to encourage the production
of renewable fuel to perfection," Sweeney wrote in a sentencing memo
last week. She said they didn't only steal but they undermined the
entire impetus behind the government's environmental programs. When
people "perpetrate fraud in these programs," Sweeney wrote, "less
renewable fuel is actually produced, thwarting Congressional intent and
requiring greater use of petroleum fuel."
Davanzo, as well as his sister, criminal psychiatrist and two daughters
gave testimony in hopes of a light sentence.
Michael Rappaport, the psychiatrist, said that in his 40-plus years of
practice he's only seen people as genuinely remorseful as Davanzo in
DUI-manslaughter trials. He also noted that Davanzo hoarded most of the
money he'd stolen. "He believed in his naive head that made him less
guilty," Rappaport told the judge.
"I truly believe my father is inherently a good person," said his eldest
daughter, taking several breaks to cry. Davanzo sobbed sitting between
his two lawyers.
His youngest daughter was the last to testify. "See the man who he is"
she pleaded with Chappell, "not just what he's done."
Sweeney pointed out that Davanzo is the only one who can bear the weight
of his family's heartache. She also noted that his remorse seemed
curiously conditional. Since his indictment, he had illegally liquidated
some assets, moved more than $1.5 million into a Panamanian bank account
and researched fake passports at various points in the last year.
It's that sort of thinking, Sweeney argued, that merits a heavy
sentence. "This was not an aberrant mistake," she said. "He did it
repeatedly for a very long period of time"
Fednya sat in the hall with his head in his hands during Davano's
sentencing. He had no family in the audience and no testimonies on his
behalf. Other than his lawyers, he was alone.
"Unfortunately I fell into a trap," he told Chappell. "It's my own fault."
Both defense attorneys declined to give comment after the hearings.
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