NEW YORK (Reuters) - Two Florida men were each sentenced to more than a decade in prison in a more than $46 million biodiesel fraud scheme, the U.S. Department of Justice said on Tuesday, the latest in a string of such cases involving the national biofuel program.
Thomas Davanzo of Estero and Robert Fedyna of Naples were sentenced on Monday for a scheme with co-conspirators at Gen-X Energy Group in Pasco, Washington, and subsidiary Southern Resources and Commodities in Dublin, Georgia, the Justice Department said in a statement on Tuesday.
The sentencing comes as the White House reviews a plan from environmental regulators on the amount of renewable fuel that companies must use next year and as U.S. voters take to the polls to elect a new president.
Davanzo and Fedyna were accused of buying fuel that had already been sold with compliance credits known as Renewable Identification Numbers, or RINs, used for the country's biofuel program. The conspirators fraudulently claimed more credits on the fuel, the statement said.
Davanzo and Fedyna were sentenced to 121 months and 135 months in prison, respectively. Gen-X did not respond immediately to a request for comment. Southern Resources and Commodities could not be reached by phone.
From March 2013 to March 2014, the Justice Department statement said, the conspirators generated at least 60 million fraudulent biofuel compliance credits. Oil companies use Renewable Identification Numbers, or RINs, to prove they are meeting government mandates to use biofuels including ethanol and biodiesel.
Sale of those fraudulent credits to third parties netted the conspirators at least $42 million. Gen-X received another $4.4 million in false tax credits for the fuel, the Justice Department said.
The U.S. government in recent weeks has announced a string of sentencings and settlements due to RIN fraud. Last month, two men pleaded guilty in one of the most recent examples of such fraud.
The U.S. government had announced in 2015 that RINs produced Gen-X and Southern Resources and Commodities were fraudulent, so the legal actions are unlikely to affect prices for the credits immediately.
But the announcement may trigger criticism of the U.S. Renewable Fuel Standard. Opponents of the program say the RIN market is susceptible to such fraud.
(Reporting by Chris Prentice; Editing by Chizu Nomiyama and Lisa Von Ahn)