Michigan biodiesel exporter sentenced to prison for tax fraud

Chandra Yarlagadda from Bloomfield, Michigan, who owned and operated Alpha Bioenergy LLC, which purchased and sold biodiesel, was sentenced to two and a-half years in federal prison Aug. 6 for filing a false income tax return.

According to the U.S. Department of Justice, Yarlagadda admittedly “substantially overstated” expenses associated with the purchase of renewable identification number (RIN) credits on his 2009-’11 tax returns. The law requires companies that export biodiesel to purchase and retire RINs for exported volumes.

“For these three years, Yarlagadda reported RIN expenses totaling more than $14.2 million, when, in fact, he was only entitled to claim approximately $80,000 in RIN expenses for those years,” the justice department said. “Yarlagadda admitted that if he had not claimed these false deductions, he would have owed an addition $2.3 million in federal income taxes.”

In addition to the prison sentence, the judge ordered Yarlagadda to serve a year of supervised release and pay the IRS restitution totaling nearly $3.3 million.

Alpha Bioenergy was formerly known as Naturol Bioenergy LLC.