Michigan Biodiesel Dealer Pleads Guilty to Filing False Tax Returns

Written by FEDagent on .

Chandra Yarlagadda owned and operated Alpha Bioenergy LLC (Alpha), formerly known as Naturol Bioenergy LLC, which purchased and sold biodiesel fuel. Yarlagadda has pled guilty to violating tax laws in order to avoid paying an additional $2.3 million in federal income taxes.

Due to regulations relating to the Clean Air Act, Yarlagadda was required to purchase Renewable Identification Numbers (RINs) for any volume of renewable fuel bought or sold through his business. RINs are credits demonstrating compliance with the Clean Air Act and standards created by the Environmental Protection Agency, according to the Department of Justice release on the case.

Yarlagadda was then required to report income and expenses associated with his business on his personal income tax returns.

Yarlagadda admitted in the plea agreements that in his 2009, 2010, and 2011 tax returns, he overstated the expenses associated with purchasing RINs.

For the three years in question, Yarlagadda reported RINs expenses totaling more than $14.2 million. In reality, Yarlagadda was only entitled to claim approximately $80,000 in RINs expenses.

Yarlagadda now faces a maximum term of imprisonment of three years, as well as a term of supervised release and a fine. As part of his plea agreement, Yarlagadda agreed to pay $2,310,948 of restitution to the Internal Revenue Service (IRS).

The case was investigated by IRS Criminal Investigation, the U.S. Environmental Protection Agency – Criminal Investigation Division, and U.S. Immigration and Customs Enforcement – Homeland Security Investigations.

This case marks the second this week requiring restitution of over $2 million. The other case involved an Alabama woman running a scheme to file false tax returns.

Posted in The Takedown