Renewable fuels company CEO expected to plead guilty to federal charges
The founder and chief executive of an alternative energy company based in Pasco is expected to plead guilty Tuesday to bilking the IRS out of more than $9.5 million in tax credits.
Scott C. Johnson, the president of Gen-X Energy Group, was charged last week with two counts of conspiracy to commit wire fraud and conspiracy to defraud the government. Investigators say Johnson, along with other people not named in court records, took advantage of an alternative fuel credit program passed by Congress in 2007. Johnson claimed $57 million in biofuel sales that never occurred, or occurred fraudulently, court records allege.
Kevin James Curtis, the Spokane-based attorney representing Johnson, declined to comment on the case Monday, citing an ongoing investigation by federal prosecutors.
Congress passed legislation in 2007 designed to spur the manufacture and consumption of renewable fuels. As part of that legislation, companies that produce fossil fuels were able to buy credits from those creating renewable energy sources. Gen-X, originally incorporated in Washington in 2006, touts a process of turning food waste into energy that can buttress or replace traditional fossil fuels.
The company received a $720,000 grant under President Barack Obama’s stimulus package to begin operations, according to a report in the Tacoma News-Tribune in 2010.
Investigators, including an environmental crimes specialist with the U.S. Department of Justice, allege Johnson sold credits for 19 million gallons of biofuels that weren’t created, and he double-dipped by selling credits for existing biofuels multiple times in violation of federal law. The company then claimed these credits on their taxes, resulting in payments of $9.5 million between 2012 and 2015.
A spokesman with Gen-X said Monday that Johnson is still the president of the company. A call requesting comment on the criminal case was not returned.
Authorities want Johnson to forfeit farmland, trucks and a 2013 speedboat, according to court records. Gen-X has facilities in Moses Lake and Georgia through a subsidiary.
A change of plea hearing is scheduled Tuesday morning before U.S. District Court Judge Salvador Mendoza.
Johnson faces a maximum prison sentence of 30 years for the two federal criminal counts and a fine up to $500,000. He is not in custody.