Plea in $9M Ponzi scheme to turn California cow manure into green energy after feds call BS
A California man bilked investors out of $8.75 million over the span of five years by pretending to be in the business of turning cow manure into green energy, according to the Department of Justice. He even moved to Montana and changed his identity to escape civil judgments against him, the DOJ said in a statement.
Ray Brewer of Porterville pleaded guilty in federal court Monday to wire fraud, money laundering and identity theft charges related to the multi-million-dollar fraud scheme, in which the 66-year-old told investors he was building anaerobic digesters on dairies in Fresno, Kern, Kings, and Tulare counties, along with other locations across the state and in Idaho.
The DOJ said Brewer promised investors 66% of all net profits from Renewable Energy Credits created by the digesters, along with tax credits from installing the machines, which use microorganisms to break down biodegradable material and turn it into methane.
According to court records, Brewer took investors on tours of dairies where he said the digesters would be built and had forged lease agreements with the dairy owners. He also gave investors altered banking agreements that made it look like he had obtained millions of dollars in loans to build the digesters, as well as forged contracts with multinational companies to show he had secured revenue streams.
He later sent investors fake construction schedules and invoices for project-related costs, fake power generation reports and even faked pictures, all to make it seem like the business was progressing.
Court records show he actually transferred the investors’ money into multiple other bank accounts opened in the names of different entities, under the names of family members and an alias. He eventually used that money to buy two 10-plus-acre plots of land, a 3,700-square-foot custom home and new Dodge Ram pickup truck.
Brewer also used money from newer investors to give as refunds to older investors, as a way to keep the scheme going.
Investors eventually realized the fraud and obtained civil judgments against Brewer, but he moved to Sheridan, Montana and assumed a new identity, the Justice Department said.
Brewer is scheduled for sentencing June 26 and faces a maximum penalty of 20 years in prison and a $250,000 for the wire fraud conviction; 20 years and $500,000 (or twice the amount of money involved) for the money laundering conviction and a mandatory two years, consecutive to other counts, for aggravated identity theft.