01/24/2020 | Press release | Distributed by Public on 01/24/2020 16:45
A Richland, Washington couple and their companies, HTG Trucking LLC and Freedom Fuel Inc., were sentenced yesterday in federal court in Richland, Washington for fraud and false statement charges in connection with a renewable energy fraud scheme, announced Assistant Attorney General Jeffrey Bossert Clark of the Justice Department's Environment and Natural Resources Division and U.S. Attorney for the Eastern District of Washington William D. Hyslop.
Hector Garza Jr., 49, was sentenced to two years in prison to be followed by a three-year term of supervised release. Tammy Garza, 38, was sentenced to four months in prison and one year of supervised release. HTG Trucking LLC and Freedom Fuel Inc. were placed on probation for three years. All of the defendants were ordered to pay restitution to the U.S. Treasury of $284,546 and a $100,000 fine. The defendants had previously pled guilty on June 6, 2019, before the Honorable Salvador Mendoza Jr.
Hector and Tammy Garza and their companies, HTG Trucking and Freedom Fuel, were participants in a conspiracy involving Gen-X Energy Group Inc. (Gen-X), a renewable energy company formerly located in Pasco and Moses Lake, Washington. Between January 2013 and April 2013, Hector Garza and his co-conspirators falsely claimed the production of hundreds of thousands of marketable renewable energy credits, which they then sold for more than $296,000, and filed false claims with the IRS for $284,546 in excise credit refunds. Throughout this period, much of the renewable fuel claimed to be produced at the Gen-X facilities was either not produced or it was re-processed multiple times.
Hector Garza, HTG Trucking and Freedom Fuel pled guilty to conspiring to defraud the United States with respect to the false claims made to the IRS, through the use of the Garzas' companies, which were used to 'round' supposed renewable fuel by driving the same material back and forth between Gen-X's Moses Lake facility and the Garzas' businesses in Othello, Washington. This activity enabled the conspirators to generate fraudulent renewable energy credits and tax credits each time the material was 'rounded.' Tammy Garza pled guilty to a separate offense of aiding and abetting the use of false statements in connection with the renewable energy credits that were claimed and sold as part of the scheme.
Several conspirators have previously pled guilty and been sentenced in connection with their role in the fraud. In June 2017, Scott Johnson, the former CEO of Gen-X, was sentenced to 97 months in prison in connection with his role in the fraud scheme. In December 2017, Donald Holmes, the former vice president of Gen-X, was sentenced to 78 months of imprisonment. In June 2018, Jin Chul 'Jacob' Cha of Tustin, California, was sentenced to 51 months in prison in connection with his role in the fraud.
The case was prosecuted by Assistant U.S. Attorney Dan Fruchter of the Eastern District of Washington; EPA Regional Criminal Enforcement Counsel and Special Assistant U.S. Attorney Karla G. Perrin for the Eastern District of Washington and Senior Trial Attorney Jennifer Leigh Blackwell of the Environment and Natural Resources Division's Environmental Crimes Section. The IRS-Criminal Investigation and the Environmental Protection Agency's Criminal Investigation Division investigated the case.