A man has been charged with $9 million in a Ponzi scheme to manure a cow

A California man was sentenced Monday to more than six years in prison for running an $8.75 million Ponzi scheme based on a non-existent plant that was supposed to produce green energy from cow dung, federal prosecutors said.

Over a five-year period, Raymond Holcomb Brewer falsely claimed to be an engineer who ran a company that built anaerobic digestion plants, which turn manure into biogas, the United States Attorney’s Office for the Eastern District of California said in a statement Monday.

The statement said Brewer, 66, of Porterville, California, told his investors he was building the plants and would generate millions of dollars in revenue by selling the biogas. He told investors they would receive two-thirds of the profits, plus tax incentives.

Books by Philip A. Talbert, US Attorney for the Eastern District of California, said in his sentencing note: “None of this was true.” “Mr. Brewer didn’t start out building on a single digest. He simply took the investors’ money and ran.”

Mr. Brewer, of Admission of guilt On fraud charges in February, she spent the money on a 3,700-square-foot custom home in California, a 12-acre parcel of land in Montana and new Dodge Ram pickups, federal prosecutors said.

Anaerobic digesters use bacteria to break down organic matter, producing a gas that is primarily methane and carbon dioxide. New York City and other places around the world have turned to this process to deal with sewage, food scraps, and farm waste, which results in renewable natural gas.

Mr. Brewer’s detailed plan to pretend to run such an operation began in 2014, according to the federal indictment. He conducted affairs principally through the Wyoming corporation with its principal place of business in California. The company was named CH4 Power, after the chemical formula for methane.

Mr. Talbert said Mr. Brewer did his best to convince his investors that his composting project was real. Mr. Brewer took them on tours of the dairies where he said he was in the process of building a digestif, and presented them with bogus lease agreements that he said he had worked out with dairy owners around California. He obtained stock photos of the digesters and sent them to the investors, occasionally altering the photos so that they appeared to show construction progress. Court files showed that he fabricated a detailed project schedule to show alleged progress.

After receiving the money from his investors, Mr. Talbert said, Mr. Brewer attempted to hide it by transferring it to other bank accounts he had opened in the names of other business entities, family members, and a pseudonym.

Mr. Brewer’s scheme began to unravel in 2019, when some of his investors discovered he was issuing refunds with money he had received from other investors, even though they had not authorized him to use it in such a way.

Mr. Talbert said Mr. Brewer’s investors obtained several civil judgments against him that year. Mr. Brewer responded by shutting down CH4 Power, putting his remaining assets in his wife’s name, obtaining a fraudulent business loan with stolen investor money and fleeing to Montana, where he lived part-time, according to the indictment.

Even then, Talbert said, he continued to engage in fraud, allegedly building more fertilizer processing plants through a new company he set up under an assumed name.

Sheriff’s deputies Mr Brewer arrested in Montana in 2020 and held on 24 counts, including telephone fraud, money laundering and aggravated identity theft.

But Mr. Brewer continued to lie, telling authorities they had the wrong man and that he was a hero Navy veteran who once saved several soldiers from a fire by blocking the flames with his body, Mr. Talbert wrote in the sentencing note. . Mr. Talbert said Mr. Brewer has since admitted that these lies were intended to curry favor with law enforcement.

“He is a fraud through and through,” wrote Mr. Talbert, “and needs severe punishment to ensure both specific and general deterrence.”

Mr. Talbert said Mr. Brewer was sentenced to six years and nine months in prison for the fraud, and was ordered to pay $8.75 million in restitution to the investors who were victimized.