On Monday, a federal judge in California handed down a sentence of more than six years in prison to a man who federal prosecutors said ran a $8.75 million Ponzi scam based on a fictional facility that would generate renewable energy from cow excrement.
According to a statement released by the US Attorney’s Office for the Eastern District of California on Monday, Raymond Holcomb Brewer lied to investors for five years by saying he was an engineer who oversaw the construction of facilities to convert manure into biogas.
According to the allegation, Mr. Brewer, 66, of Porterville, California, promised his backers that he would make millions of dollars by selling the biogas from the plants he was building. He assured the financiers that they would share in 66 percent of the earnings and be eligible for tax breaks.
U.S. Attorney for the Eastern District of California Phillip A. Talbert stated in a sentencing memorandum that “none of this was true.” Mr. Brewer has not even started building one digester. He just up and disappeared with the money from his backers.
The tweet below verifies the news:
A California man was sentenced on Monday to more than six years in prison for running an $8.75 million Ponzi scheme that hinged on a nonexistent factory that was supposed to create green energy out of cow manure, federal prosecutors said. https://t.co/x3tdR1wrmg
— The New York Times (@nytimes) June 27, 2023
Federal authorities claim that Mr. Brewer, who pled guilty to fraud charges in February, used the funds to purchase a 3,700 square foot custom home in California, 12 acres of land in Montana, and two new Dodge Ram pickup trucks.
Bacteria in anaerobic digesters convert organic matter into a gas primarily made of methane and carbon dioxide. New York City and other cities across the world have begun using the method, which converts organic waste into a sustainable natural gas from sources like sewage, food scraps, and farm waste.
The federal indictment alleges that Mr. Brewer began his intricate ruse of purporting to manage such a process in 2014. He mostly used a Wyoming corporation with a California address as the conduit for the firm. The methane chemical formula inspired the company’s moniker, “CH4 Power.”
Mr. Talbert claims that Mr. Brewer went to great efforts to persuade his financiers that the manure project was legitimate. Mr. Brewer gave them tours of farms in California where he claimed he planned to construct digesters and showed them phony lease agreements with farmers.
He gathered several pictures from the internet and emailed them to potential backers, occasionally editing them to make it look like work was progressing. Court documents revealed that he had manufactured a comprehensive schedule for the project in order to demonstrate phony advancement.
Mr. Brewer allegedly attempted to conceal investor funds by moving them to accounts in the names of shell companies, relatives, and an alias, as recounted by Mr. Talbert. In 2019, several of Mr. Brewer’s investors discovered that he was giving refunds using money he had received from other investors, even though these investors had not authorized him to spend it in this way.
Mr. Talbert claims that Mr. Brewer had many civil judgements entered against him that year by investors. According to the indictment, Mr. Brewer’s response was to shut down CH4 Power, transfer his remaining assets to his wife’s name, take out a fraudulent business loan using investor funds he had stolen, and then temporarily relocate to Montana.
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Mr. Talbert claims that the deception persisted even after he had founded a new firm under an alias and pretended to develop a manure processing facility. In 2020, Montana law enforcement officials arrested Mr. Brewer on 24 charges, including wire fraud, money laundering, and aggravated identity theft.
But Mr. Brewer continued to lie, Mr. Talbert said in the sentencing memorandum, claiming he was a Navy veteran hero who once saved three soldiers from a fire by shielding the flames with his body. According to Mr. Talbert, Mr. Brewer has since revealed that he lied to the police in an effort to gain their favor.
“He is a fraudster through and through,” Mr. Talbert wrote, “and needs to be punished harshly to ensure both specific and general deterrence.” According to Mr. Talbert, Mr. Brewer was sentenced to six years and nine months in jail and forced to pay $8.75 million in restitution to the investors who fell victim to the Ponzi scheme.
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