A man arrested in Houston one year ago pleaded guilty Tuesday to a Clean Air Act false statement and mail fraud as part of his role in a scheme to defraud the EPA by falsely representing he was producing millions of gallons of biodiesel fuel.
Philip Joseph Rivkin, a.k.a. Felipe Poitan Arriaga, 50, faces more than 10 years in prison and will be responsible for $51 million in restitution to help reimburse victims, according to the terms of the plea agreement.
“These crimes are a serious threat to an important program that helps combat climate change,” said Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance at the U.S. Environmental Protection Agency (EPA). “For undermining the Renewable Fuels Standard, Mr. Rivkin will pay substantial fines and restitution, and he also faces significant prison time. Companies and individual managers should get the message that there are serious consequences for breaking the rules and undermining the integrity of this program.”
In the plea agreement, Rivkin admitted from July 2010 to July 2011, he devised the biodiesel fraud scheme as his business operation falsely generated renewable fuel credits, known as renewable identification numbers (RINs), and sold them to oil companies and brokers for more than $29 million.
On April 30, 2012, EPA issued Houston-based Green Diesel, LLC a Notice of Violation (NOV). The NOV said the company generated more than 60 million invalid biomass-based diesel RINs without producing any qualifying renewable fuel, and transferred the majority of these invalid RINs to others.
On June 18, 2014, two U.S. Secret Service Agents arrested Rivkin in Houston after Guatemala expelled him for having fraudulently secured Guatemalan citizenship.
The next day, a 68-count indictment ended up handed down against Rivkin for charges including Clean Air Act false statements, wire fraud, mail fraud, and for engaging in monetary transactions in property derived from unlawful activity. The indictment included a notice of forfeiture to include: Cash in excess of $29 million; three vehicles including a Lamborghini, Maserati, and a Bentley; a Canadair LTD airplane; and millions of dollars worth of artwork previously seized from Rivkin in 2012 and included in a civil action for forfeiture.
The Clean Air Act requires EPA to set annual volume targets for four categories of biofuels to ensure transportation fuel sold in the United States contains a minimum volume of renewable fuel. By displacing fossil fuels, biofuels help reduce greenhouse gas emissions and help strengthen energy security.
The U.S. EPA-Criminal Investigation Division, U.S. Secret Service, IRS-Criminal Investigation, with assistance from the Houston Area Fraud Task Force, Houston Ship Channel Initiative and Texas Environmental Crimes Task Force investigated the case. Leslie Lehnert, trial attorney, U.S. Department of Justice-Environmental Crimes Section, with assistance from J.T. Morgan, Attorney, U.S. EPA-Legal Counsel Division prosecuted the case.