Waterloo company's owners plead guilty to federal fraud, conspiracy charges

Gary Jury, vice president and co-owner of Triton Energy, has offered a guilty plea to conspiracy to commit criminal offenses and making false statements to the U.S. Environmental Protection Agency.

A federal indictment says the men falsely obtained federal tax credits on their companies’ fuel and that Witmer and sold illegitimate renewable fuel credits to private purchasers.

Federal authorities filed the charges Sept. 19 in U.S. District Court at Fort Wayne, and the men offered their guilty pleas on the same day.

If a federal magistrate judge accepts their guilty pleas, both men would receive sentences shorter than the maximum prison time for their admitted offenses.

Witmer would receive a sentence of 57 months, compared to a maximum of 25 years for his offenses. Jury would receive a 30-month sentence, down from a maximum of seven years for his crimes.

Both men also would be ordered to pay restitution. In Witmer’s case, full restitution could include $56 million to private victims and $8 million to U.S. Department of the Treasury, court documents say. Jury also would owe $8 million in restitution to the Department of the Treasury.

The men would be ordered to dissolve Triton Energy LLC and Gen2 Renewable Diesel LLC within 12 months. Witmer also would have to sell a coal mine in Kentucky and use the money toward his restitution.

Based in the Waterloo Industrial Park at the town’s west edge, Triton opened in 2007, with owners saying they would produce the “next-generation” of biodiesel fuels.

In recently years, Triton claimed to process animal fats and vegetable oils into renewable fuel by mixing it with alcohol and a proprietary catalyst to produce Gen2 Renewable Diesel, the federal indictment says.

Witmer took advantage of two federal programs, with Jury participating in a conspiracy to defraud one of those programs, their indictments say.

Petroleum refiners and importers must have a designated amount of renewable fuels in their product portfolios. They can meet the requirement by purchasing credits for renewable fuels produced by others.

From 2011 to 2015, Witmer sold Renewable Identification Numbers for fuel to private purchasers, mostly to one in Texas, for a combined $56 million. However, the government says, the Waterloo companies’ product did not qualify because it had not been used for eligible purposes.

To make the fuel appear to be eligible, Witmer worked with co-conspirators in other states to create a series of false sale documents, the indictments say.

Witmer’s indictment says that in one instance, the Waterloo companies sold processed corn oil for use as a lubricant in the production of wood pellets in Michigan and to a customer in Ohio for use in fire-starter logs. The conspirators allegedly created documents falsely indicating the fuel had been sold for use as heating oil and transportation fuel. The end users were not alleged to be part of the conspiracy.

The government also offers an Alternative Fuel Credit of 50 cents per gallon for fuel used in transportation. The indictment says Witmer and Jury obtained $7.3 million in Alternative Fuel Credits for fuel that was not used for eligible purposes.

The indictment says Witmer and Jury conspired with business owners in other states to create false documents that would make their fuel appear to be eligible for Alternative Fuel Credits. They agreed with the co-conspirators to divide the money from the credits.

In one instance, Triton’s fuel was used in power plants and cement kilns instead of for transportation uses that qualified for federal fuel credits.

Activities described in Witmer’s indictment ranged from 2010 to March 2015. The actions mentioned in Jury’s indictment stretch from 2012 to early 2015.

The men could withdraw their offers to plead guilty if Magistrate Judge Susan L. Collins does not accept the terms of their plea agreements.