Trucking Company Owners Plead Guilty To Fraud After Caught In Tax Scheme
Spokane, Washington – A couple from Richland, Washington who own a trucking company pleaded guilty to fraud and false statements charges in connection with a renewable energy fraud scheme, according to prosecutors for the Eastern District of Washington.
Hector M. Garza, Jr., 48, and his wife, Tammy L. Garza, age 37, entered the guilty pleas on behalf of themselves and their companies HTG Trucking, LLC, and Freedom Fuel, Inc.
According to information disclosed during the court proceedings, Hector Garza, 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 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 upon the IRS, through the use of the trucking 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, and generating fraudulent renewable energy credits and tax credits each time the material was “rounded.”
Tammy Garza pled guilty to 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, a separate offense.
Joseph H. Harrington, United States Attorney for the Eastern District of Washington, said, “Defrauding the public by scamming renewable energy incentive programs will not be tolerated. I commend the tenacious and thorough efforts of investigators from IRS-Criminal Investigation and the Environmental Protection Agency’s Criminal Investigation Division.”
A number of other 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 a 97-month term of imprisonment in connection with his role in the fraud scheme.
Most recently, in June 2018, Jin Chul “Jacob” Cha of Tustin, California, was sentenced to 51 months of imprisonment in connection with his role in the fraud.
“The United States tax system is designed to provide vital government services to American citizens. It is not a slush fund for fraudsters,” said Acting Assistant Special Agent in Charge Carrie Nordyke of IRS Criminal Investigation. “The IRS will continue to work with federal law enforcement agencies to prosecute scammers like Hector and Tammy Garza who illegally claim thousands in tax credits for personal financial gain.”
The guilty pleas were accepted by United States District Judge Salvador Mendoza, Jr.
The conspiracy offense to which Hector Garza pled guilty carries a maximum term of imprisonment of 10 years, while the false statement charge to which Tammy Garza pled guilty has a maximum imprisonment term of 2 years.
Each corporation faces a maximum fine of $500,000, or of double the loss to the victim or the gain to the defendant, whichever is greater.
All four defendants are scheduled to be sentenced on October 17, 2019, at 9:00 a.m. in Richland, Washington.