Jeffrey David Gunselman, 30, pleaded guilty today before U.S. District Judge Sam R. Cummings to an Indictment charging 51 counts of wire fraud, 24 counts of money laundering and four counts of making false statements in violation of the Clean Air Act. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. Gunselman will remain in custody.
Today's announcement was made by U.S. Attorney Sarah R. Saldaa of the Northern District of Texas. Each of the wire fraud counts carries a maximum penalty of 20 years in federal prison; each of the money laundering counts carries a maximum penalty of 10 years in federal prison; and each of the false statement counts carries a maximum penalty of two years in prison. In addition, each of the 79 counts carries a maximum fine of $250,000.
Gunselman was the owner of Absolute Fuels, LLC, dba Absolute Fuels, LLC (Absolute Fuels), which he formed in April 2009. He was also named as Governing Person and/or as Registered Agent for other business entities associated with Absolute Fuels, LLC, including Absolute Fuels, LLC; Absolute Milling, LLC; Ellipse Energy, LLC; 21 Investments, LLC; and YGOG Holdings, LLC. However, Gunselman admits that these entities are solely alter egos of himself, as an individual, as he alone owns, manages, directs and controls each of them and each has no separate and distinct existence from him.
Gunselman admits that from September 2010 to October 2011, he devised a scheme to defraud the Environmental Protection Agency (EPA) by falsely representing that he was in the business of producing bio-diesel fuel, yet Gunselman did not have a bio-diesel fuel-producing facility. Instead, Gunselman's business operation consisted of falsely generating renewable fuel credits and selling them to oil companies and brokers. He instructed purchasers to wire payments to a bank account he solely controlled, and as a result, approximately $41,762,236 was deposited into that account.
From September 2010 to mid October 2011, Gunselman conducted 51 fraudulent transactions, which were transmitted by wire communications, that represented to the EPA that bio-diesel fuel had been produced at the Absolute Fuels facility in Anton, Texas, when in fact, no bio-diesel fuel had been produced. This ultimately resulted in Gunselman requesting and receiving payments, by electronic funds transfer, of approximately $41,762,236.
Regarding the money laundering convictions, during the same time period, Gunselman engaged in monetary transactions in criminally derived property by purchasing real and personal property valued at approximately $12 million with the funds derived from the wire fraud. Included in that property are: several vehicles, including a Bentley, Mercedes-Benz, Lexus, Cadillac and Shelby Cobra; a Patton Military Tank; a Gulfstream airplane, professional basketball season tickets and corporate sponsorship; and agricultural, business and residential real estate.
The false statements convictions stem from Gunselman making material false statements to the EPA, falsely claiming and representing that bio-diesel fuel, a renewable fuel, had been produced, generating renewable fuel credits, when Gunselman well knew that no bio-diesel fuel had been produced.
Gunselman further agreed to forfeit all property obtained and derived as a result of his criminal activities.