Michigan biodiesel exporter sentenced to prison for tax evasion | Takeover bid


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A Bloomfield, Michigan businessman who operated a biodiesel fuel business was sentenced today to 30 months in prison for filing a false tax return.

Chandra Yarlagadda owned and operated Alpha Bioenergy LLC, formerly known as Naturol Bioenergy LLC, which bought and sold biodiesel. Under the Clean Air Act and related federal regulations, companies such as Alpha that exported biodiesel were required to purchase and remove Renewable Identification Numbers (RINs) for any volume of renewable fuel they exported. . RINs are used by the Environmental Protection Agency to track compliance with its annual Clean Air Act standards.

According to court documents, Yarlagadda reported the income and expenses associated with Alpha on Schedules C attached to his personal tax returns. Yarlagadda admitted in argument that on Schedules C attached to his 2009, 2010 and 2011 tax returns, he significantly overestimated the expenses associated with the purchase of RIN. For those three years, Yarlagadda claimed RIN expenses totaling over $ 14.2 million, when in fact he was only entitled to claim about $ 80,000 in RIN expenses for those years. Yarlagadda admitted that if he had not claimed these bogus deductions, he would have owed an additional $ 2.3 million in federal income taxes.

In addition to the jail term, U.S. District Judge Gershwin A. Drain ordered Yarlagadda to serve one year of probation and pay restitution to the IRS in the amount of $ 3,285,303.

Acting Assistant Deputy Attorney General Stuart M. Goldberg of the Department of Justice’s Tax Division and Acting U.S. Attorney Saima S. Mohsin for the Eastern District of Michigan made the announcement.

IRS Criminal Investigation, US Environmental Protection Agency – Criminal Investigation Division, and US Immigration and Customs Enforcement – Homeland Security Investigations, conducted the investigation.

Trial prosecutors Melissa S. Siskind and Sarah C. Ranney of the Tax Division continued the case, and Assistant US Attorney Stephen Hiyama of the Eastern District of Michigan provided substantial assistance in the case.

Additional information about the Tax Division and its enforcement efforts can be found on the division’s website.

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