Florida Man Facing Federal Prison Time for Biofuel Fraud

The scheme generated more than $7 million in fraudulent EPA renewable fuel credits, according to the U.S. Department of Justice. (Zolnierek/Getty Images)

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A Florida man is facing up to five years in federal prison after pleading guilty to wire fraud and filing false claims after overstating biodiesel credits that were reported to the IRS and the U.S. Environmental Protection Agency.

Royce Gillham pleaded guilty in federal district court Nov. 7 for his part in a ruse that generated over $7 million in fraudulent EPA renewable fuel credits, according to the U.S. Department of Justice. He pleaded guilty in federal district court for conspiring to commit wire fraud and filing false claims. 

Gillham was general manager of a Fort Pierce, Fla.-based biofuel company that purported “to turn various feedstocks into biodiesel,” DOJ stated. The unidentified company supposedly made and sold renewable fuel.

“When reporting the number of gallons produced to the IRS and EPA, Gillham and his employer vastly overstated their production volume in an effort to generate more credits. When auditors sought more information from the company, Gillham and his co-conspirators provided false information about their fuel production and customers,” DOJ noted.

RELATED: EPA probes biodiesel supply chains

The DOJ provided no name for the company or Gillham’s place of employment for when the fraudulent activities took place. However, EPA records list a Royce Gillham as vice president of Indian River Biodiesel. (EPA said its list is accurate as of Oct. 23.)

Gillham’s name is also listed as copyright holder on a website for a Florida company called Phoenix Grease Recycling that buys used cooking oil. He is also listed as chief financial officer on an inactive Florida company that was called Pristine Biodiesel of Vero Beach that ceased operations in 2015.

At sentencing, a federal district court judge will determine whether to accept the plea agreement after considering U.S. Sentencing Commission guidelines and other statutory factors, DOJ stated. No date had been set for sentencing.

Gillham is “facing a maximum penalty of five years in prison and a $250,000 fine for the conspiracy count,” DOJ stated. The agency didn’t reveal if any other people are being prosecuted in relation to Gillham’s case.

The case was jointly investigated by IRS and EPA criminal investigation divisions. It is being prosecuted by Adam Cullman, senior federal trial attorney, and Daniel Funk, assistant U.S. attorney, for the Southern District of Florida.

IRS and EPA signed a memorandum of understanding in 2019 to share biofuel information such as details about production facilities, compliance and data verification for renewable fuel credits and fuel tax credits to root out fraud.

The pact between both federal agencies stated that a review of fuel tax credits identified “common fraudulent practices such as not producing the [biofuel] product, conducting interparty related transactions and creating the illusion that the fuel was being produced when it was not.” It noted that EPA and IRS generally jointly take actions in such cases of criminal fraud and would share information for investigations.