United States v. Jeffrey Wilson

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17-1076
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JEFFREY J. WILSON,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 1:13-cr-00190-SEB-TAB-1 — Sarah Evans Barker, Judge.
____________________
ARGUED SEPTEMBER 14, 2017 — DECIDED JANUARY 12, 2018
____________________
Before WOOD, Chief Judge, and RIPPLE and HAMILTON,
Circuit Judges.
RIPPLE, Circuit Judge. A grand jury indicted Jeffrey Wilson,
in a twenty-one-count indictment, with the following
offenses: (1) fraud in connection with the purchase or sale of
securities, in violation of 15 U.S.C. §§ 78j(b) and 78ff, and 17
C.F.R. § 240.10b-5 (Count 1); (2) fraud in the offer or sale of
securities, in violation of 15 U.S.C. §§ 77q(a) and 77x, and 18
U.S.C. § 2 (Count 2); (3) material false statements in required
2 No. 17-1076
Securities and Exchange Commission (“SEC”) filings, in
violation of 15 U.S.C. § 78ff and 18 U.S.C. § 2 (Counts 3–9); (4)
wrongful certification of annual and quarterly reports by a
corporate officer, in violation of 18 U.S.C. § 1350(c)(1) (Counts
10–14); (5) material false statements by a corporate officer to
an accountant, in violation of 15 U.S.C. §§ 78m(b)(5) and 78ff,
17 C.F.R. §§ 240.13b2-2(a) and 240.13b2-2(b), and 18 U.S.C. § 2(Counts 16–17 and 19–20); and (6) false statements to
Government investigators, in violation of 18 U.S.C. § 1001(Count 21).
A jury convicted Mr. Wilson on all charges. He then filed
a motion under Federal Rule of Criminal Procedure 29(c) for
acquittal on all counts, contending that the Government had
failed to present evidence sufficient to prove his guilt beyond
a reasonable doubt. The district court denied the motion. It
then sentenced Mr. Wilson to 120 months’ imprisonment for
Counts 1, 3–14, 16–17, and 19–20, and to 60 months’
imprisonment for Counts 2 and 21, all to run concurrently.
The court also imposed 18 months’ supervised release per
count, each to be served concurrently. The court ordered
Mr. Wilson to pay $16,468,769.73 in restitution and a $1,900
assessment.
Mr. Wilson now appeals and renews his challenge to the
sufficiency of the evidence. He contends that the Government
failed to prove beyond a reasonable doubt that he had the
requisite mens rea to commit the charged offenses. After
hearing oral argument and carefully examining the record,
we cannot accept this argument. None of Mr. Wilson’s
contentions reach the high threshold of showing that a
reasonable jury could not have found him guilty. When
viewed in the light most favorable to the prosecution, the
No. 17-1076 3
evidence adequately supports the jury’s finding that
Mr. Wilson acted knowingly and willfully when making false
statements to investors, regulators, an outside accountant,
and Government agents. It also supports the reasonable
inference that Mr. Wilson was aware of and participated in a
fraudulent tax scheme called “Alchemy.” Accordingly, we
affirm the judgment of the district court.
I
BACKGROUND
A. Facts1
Mr. Wilson was the Director, Chairman of the Board,
President, and Chief Executive Officer of a public company
called Imperial Petroleum, Inc. (“Imperial”) from May 2010,
to November 2011. In May 2010, Imperial acquired e-Biofuels,
LLC (“e-Bio”), a biofuel company owned previously by
Craig Ducey, Chad Ducey, and Brian Carmichael. Craig and
Chad are brothers; Carmichael is related to them by marriage.
A third brother, Chris Ducey, handled transportation logistics
for e-Bio.2
Prior to its acquisition by Imperial, e-Bio had developed a
fraud scheme called Alchemy. It involved purchasing
biodiesel from a third party and then reselling it to customers
as though it had been produced originally by e-Bio. This
scheme was profitable because it allowed the company to take
1The facts are based on the trial record viewed in the light most favorable
to the Government. United States v. Johnson, 874 F.3d 990, 998 (7th Cir.
2017).
2 To avoid confusion, we refer to the Ducey brothers by their first names.
4 No. 17-1076
advantage of government incentives for renewable-energy
production without actually expending production costs. The
relevant incentives are renewable identification numbers
(“RINs”) and the blender’s tax credit.
RINs are essentially labels used by the Environmental
Protection Agency (“EPA”) to track renewable fuel
production and consumption. Biodiesel producers can
generate and attach a certain number of RINs to each gallon
of biodiesel that they manufacture, using EPA-approved
procedures, at EPA-registered facilities.3 Producers can sell
this RIN-valued fuel to petroleum fuel refiners and importers.
These customers must obtain and retire a certain number of
RINs in order to meet annual regulatory obligations.4 This
system creates a market for RIN-valued biodiesel—i.e.,
biodiesel that has not yet had its RINs retired.
The blender’s tax credit is a $1/gallon credit; it is granted
to the taxpayer that first blends biodiesel with any amount of
petroleum diesel. Before biodiesel is blended, it is known as
B100, which indicates that it is 100 percent biodiesel. Biodiesel
is often blended with a small amount of petroleum diesel.
This process results in a product known as B99, which is
3 See 40 C.F.R. § 80.1126.
4See 40 C.F.R. § 80.1127. At the end of each compliance year, refiners and
importers submit evidence of the RINs they obtained that year. They can
apply those RINs to meet their annual obligations, to make up for the prior
year’s deficit, or to credit their account for the next compliance year. See
Envtl. Prot. Agency, Renewable Fuel Standard Program: Overview for
Renewable Fuel Standard, https://www.epa.gov/renewable-fuel-standard-
program/overview-renewable-fuel-standard (last visited Dec. 21, 2017).
No. 17-1076 5
approximately 99 percent biodiesel and, more importantly,
already has been used to claim the tax credit.
Because of these two separate government incentives,
RIN-valued B100 is more valuable to biodiesel purchasers
than RIN-less B99. The conspirators behind Alchemy profited
by purchasing RIN-less B99 and then reselling it as
RIN-valued B100. To avoid suspicion, e-Bio used a third-party
company, Caravan Trading (“Caravan”), as a middleman.
Caravan was owned by Joseph Furando. Caravan would
purchase RIN-less B99 at low cost and then resell it to e-Bio
along with fake invoices describing the biodiesel as feedstock
(e.g., soybean oil or chicken fat). Feedstock is used to create
biodiesel, so e-Bio would pretend that it had used this
“feedstock” to produce B100 in its own plant. E-Bio generated
RINs for this fake B100, which was actually B99 with no
legitimate RIN value. The company profited by selling this
product at the price of RIN-valued B100.
To carry out this plan, e-Bio hired truck drivers to pick up
the RIN-less B99 from Caravan’s fuel terminals and deliver it
to the e-Bio plant. There, it was pumped into storage tanks
and later transferred to another truck for delivery to e-Bio’s
customers. E-Bio furnished drivers delivering this product
with paperwork reciting that the fuel they were carrying was
RIN-valued B100, produced at the e-Bio plant. To cut down
transportation costs, e-Bio eventually had truck drivers carry
the biodiesel directly from Caravan’s fuel terminals to e-Bio’s
customers. The company would fax fake paperwork,
including false bills of lading, to the drivers while they were
en route in order to make it appear as if the fuel had been
produced at (and delivered from) the e-Bio plant. These
6 No. 17-1076
deliveries were called “Ghost Loads,” because the drivers of
those loads were never seen at the e-Bio plant.
While negotiating the acquisition of e-Bio, Craig informed
Mr. Wilson that the e-Bio plant was not producing biodiesel
from feedstock and that it was purchasing fuel from Caravan.
Shortly after Imperial acquired e-Bio, Craig emailed
Mr. Wilson a spreadsheet entitled “e-Biofuels make versus
buy cost 6-16-2010.xls” (the “Make vs. Buy spreadsheet”).5
This spreadsheet compared the cost of making biodiesel from
scratch versus the profit of buying it from Caravan. At one
point, Mr. Wilson asked Craig how e-Bio could increase its
output under the latter option, and Craig told Mr. Wilson that
e-Bio’s main customer would purchase as much biodiesel as
e-Bio could sell.
The parties disputed at trial the degree of Mr. Wilson’s
involvement in e-Bio’s business. The evidence showed that
the Duceys continued to oversee many of e-Bio’s daily
operations after the Imperial acquisition, and Mr. Wilson
maintained that he was largely unaware of e-Bio’s day-to-day
operations. According to him, he purchased the company
because it came with a self-sufficient group of managers.
There was, however, significant evidence about Mr. Wilson’s
involvement in and awareness of e-Bio’s activities, as set out
in the following paragraphs.
A few months after the acquisition, Mr. Wilson exchanged
emails with his son and Chad, both of whom were working at
the e-Bio plant. Chad stated that e-Bio was not producing any
glycerin, a necessary by-product of transesterification (the
process that converts feedstock into biodiesel). Mr. Wilson
5 Tr. Ex. 3 (Make vs. Buy spreadsheet).
No. 17-1076 7
replied with his understanding that a lack of glycerin meant
e-Bio was not producing biodiesel from feedstock. His son
confirmed this conclusion. Around the same time, Mr. Wilson
told the managers of Caravan that he wanted to increase their
business together.
In November 2010, Imperial filed its first annual report
with the SEC. In that report, Mr. Wilson represented that
e-Bio manufactured millions of gallons of biodiesel from
feedstock, that it produced glycerin as a by-product of this
production process and that it took advantage of RINs that
are generated when biofuel is produced. The following year,
Mr. Wilson filed another annual report, three quarterly
reports, and two current reports with the SEC. All of these
documents included the same or similar statements
representing that e-Bio produced biofuel from feedstock
rather than buying and reselling biodiesel produced by a
third party. Mr. Wilson certified the accuracy of the annual
and quarterly reports even though they included false
statements about e-Bio’s production process and output.
Mr. Wilson communicated similar statements to Imperial’s
outside accountant and its investors.
During Mr. Wilson’s tenure as president of Imperial, e-Bio
increased its fraudulent fuel sales substantially. It was able to
increase its output by undertaking more and more Ghost
Loads, especially in the Houston area.6 The Government’s
witnesses testified that Mr. Wilson knew of these Ghost Loads
and wanted to increase them by sending more drivers to
6 These Texas Ghost Loads were uniquely risky because the trucks never
traveled out of the state; they picked up fuel from terminals in Houston
and delivered it to customers in Houston, even though the biodiesel was
purportedly produced at e-Bio’s plant in Indiana.
8 No. 17-1076
Texas. Mr. Wilson also had discussions about ways to
mitigate the risks posed by the Ghost Loads. For instance, he
favored bribing e-Bio’s truck drivers so they would not
expose the true nature of their deliveries, and he agreed to
purchase a fax machine to transmit falsified paperwork
directly to the drivers rather than by using an intermediary.
He also was present during discussions about removing
e-Bio’s name from the trucks to deflect any suspicions about
the deliveries.
During one audio-recorded meeting, Furando explained
that the conspirators referred to the entire scheme as
Alchemy. He also said: “Big oil does not care. … The RINs
you guys generate, they don’t care if they’re real or not. They
just want an obligation met. And they want to be done with
it.”7 The parties dispute whether Mr. Wilson attended this
meeting. During trial, three witnesses testified that they were
at the meeting along with Mr. Wilson. A fourth witness
identified a voice in the recording as that of Mr. Wilson;
Mr. Wilson’s brother disputed that identification. The jury
had separate exemplars of Mr. Wilson’s voice to compare
with the recording.
In summer 2011, a hedge fund, Platinum Partners
(“Platinum”), considered investing in Imperial.
David Steinberg, an investment professional at Platinum,
evaluated Imperial as a potential investment. Ashley Player,
a renewable energy consultant whom Platinum had hired to
conduct due diligence on Imperial, assisted him. As part of
her investigation, Player inquired as to how e-Bio’s
15-million-gallon-per-year plant could produce 25–30 million
7 Tr. Ex. 148 (transcript of recorded meeting on July 27, 2011), at 2–3.
No. 17-1076 9
gallons of biodiesel per year. Chad told her that about half of
e-Bio’s output came from reprocessing “off-spec” biodiesel
(i.e., biodiesel that fails to meet one or more industry
specifications). The other 15 million gallons, he told her, were
produced from feedstock. Platinum Partners did not invest in
Imperial.
Around this same time, Mr. Wilson was attempting to
activate the production equipment at the e-Bio plant.
Investors were requesting to visit the plant, but Mr. Wilson
was not willing to host them until the plant could process
genuine feedstock. Mr. Wilson ran into difficulties getting the
plant up and running, and he eventually resigned from his
position.
During Imperial’s ownership of e-Bio, the subsidiary
generated 99 percent of Imperial’s revenues. Overall, e-Bio
resold over 35 million gallons of biodiesel and realized more
than $55 million in profits as a result of Alchemy. As e-Bio
generated more and more revenue, the value of Imperial’s
stock rose as well. Mr. Wilson and his wife transferred
hundreds of thousands of Imperial shares during this time,
and Mr. Wilson issued more than $1 million in Imperial
shares to different companies that he controlled. He also paid
off more than $5 million in company debts using Imperial
stock and wrote more than $100,000 in company checks to
himself. These payments were not disclosed in Imperial’s SEC
filings and run counter to Mr. Wilson’s statements in SEC
reports that he had deferred his salary. When the scheme fell
apart, Imperial’s stock lost almost all of its value, and
investors lost more than $18 million.
In June 2012, Government agents interviewed Mr. Wilson
as part of an investigation into whether Imperial’s SEC filings
10 No. 17-1076
contained false statements about e-Bio’s production of
biodiesel. When confronted with questions from
investigators, Mr. Wilson repeated the explanation that Chad
had given to Ashley Player: he told them that at least half of
e-Bio’s output was produced from feedstock at the company’s
EPA-registered plant, and that the other half was made by
reprocessing off-spec biodiesel. Mr. Wilson also told the
investigators that: (1) he never compared the cost of off-spec
biodiesel to feedstock; (2) he did not compare the costs of
reprocessing off-spec methyl ester to making biodiesel from
feedstock; and (3) he did not know if reprocessing off-spec
methyl esters was more profitable than making biodiesel from
feedstock.
B. District Court Proceedings
In September 2013, the Government filed a twenty-one-
count indictment alleging that Mr. Wilson had committed the
following offenses: fraud in the purchase or sale of securities
(Count 1); fraud in the offer or sale of securities (Count 2);
material false statements in required SEC filings8 (Counts 3–
9); wrongful certifications of annual and quarterly reports9
(Counts 10–14); material omissions and false statements to a
public company’s independent accountant10 (Counts 16–17
8Specifically, Imperial’s Annual Reports for 2010 and 2011, its Quarterly
Reports for the first three quarters of 2011, and its Current Reports for
September and October of 2011.
9 The same Annual and Quarterly Reports as above.
10Specifically, omissions and statements related to Imperial’s annual
audits in 2010 and 2011.
No. 17-1076 11
and 19–20); and false statements to Government investigators
(Count 21). Craig was charged as a co-defendant.11 He
pleaded guilty prior to the trial and testified against
Mr. Wilson. Chad, Chris, Carmichael, Furando, and Katirina
Pattison (the original Alchemy conspirators) were all charged
separately and also pleaded guilty. During Mr. Wilson’s trial,
the Government presented testimony from multiple
participants in the Alchemy scheme, including Craig, Pattison
(the second in charge of Caravan), and Alexander Chepurko
(an employee of Caravan). The Government also presented
testimony from Scott Hlavacek, an accountant for the SEC.
Mr. Wilson did not testify.
The district court conducted an eight-day jury trial
between July 11, 2016, and July 20, 2016. At the close of
evidence, Mr. Wilson filed a motion for judgment of acquittal
under Federal Rule of Criminal Procedure 29(a). After the
court denied the motion, the jury found him guilty on all
counts.
After the verdict, Mr. Wilson filed a Rule 29(c) motion for
a renewed judgment of acquittal.12 He argued that the
Government had failed to adduce sufficient evidence to prove
beyond a reasonable doubt that he had the requisite mens rea
to commit the charged offenses. Although he did not dispute
the existence of the Alchemy scheme, Mr. Wilson claimed that
he was not aware of it at the time of his alleged offenses.
11 Counts 15 and 18 charged only Craig.
12The Defendant’s motion cited Rule 29(a), but the district court properly
treated it as a Rule 29(c) motion. Rule 29(a) governs motions for judgment
of acquittal made before a case is submitted to a jury, whereas Rule 29(c)
governs similar motions filed after a verdict of guilty.
12 No. 17-1076
Therefore, he argued, the Government could not prove that
he possessed the knowledge needed to convict him on any
counts. The district court denied the motion for acquittal.
The court sentenced Mr. Wilson in December 2016. On
Counts 1, 3–14, 16–17, and 19–20, it imposed concurrent
sentences of 120 months’ imprisonment. On Counts 2 and 21,
the court imposed concurrent sentences of 60 months’
imprisonment. These latter sentences were to run
concurrently with the 120-month sentences. The court also
ordered $16,468,769.73 in restitution and a $1,900 assessment.
Mr. Wilson timely appealed.
II
DISCUSSION
Mr. Wilson asks that we review the district court’s denial
of his motion for judgment of acquittal. The principles that
govern our review are well-settled. We review the trial court’s
ruling on a Rule 29 motion for a judgment of acquittal de
novo. United States v. Doody, 600 F.3d 752, 754 (7th Cir. 2010).
Like the district court, we ask “whether at the time of the
motion there was relevant evidence from which the jury could
reasonably find [the defendant] guilty beyond a reasonable
doubt, viewing the evidence in the light most favorable to the
Government.” United States v. Blasco, 581 F.2d 681, 684 (7th
Cir. 1978) (alteration in original) (internal quotation marks
omitted). We must bear in mind that “it is the exclusive
function of the jury to determine the credibility of witnesses,
resolve evidentiary conflicts, and draw reasonable
inferences.” Id.No. 17-1076 13
We have framed this inquiry as “whether after viewing
the evidence in the light most favorable to the prosecution,
any rational trier of fact could have found the essential
elements of the crime beyond a reasonable doubt.” United
States v. Roman, 728 F.2d 846, 857 (7th Cir. 1984) (emphasis in
original) (internal quotation marks omitted). When a
defendant has introduced evidence in his own defense at trial,
we examine the evidence as a whole, including that presented
by the defendant. See United States v. Fearn, 589 F.2d 1316, 1321
(7th Cir. 1978). In a case that hinges on circumstantial
evidence, we must not permit a verdict based “solely on the
piling of inference upon inference,” but we also must not
“rend the fabric of evidence and examine each shred in
isolation; rather, the reviewing court must use its experience
with people and events in weighing the chances that the
evidence correctly points to guilt against the possibility of
innocent or ambiguous inference.” Roman, 728 F.2d at 858(internal quotation marks omitted).
Mr. Wilson maintains that he was unaware of the
Alchemy scheme and therefore lacked the requisite mens rea
to be convicted on any charges. In response, the Government
notes that it did not need to prove that Mr. Wilson knew about
the entire Alchemy scheme (specifically, the double
incentives that e-Bio generated through falsified paperwork)
in order to prove his guilt. Rather, it needed to prove only that
he knowingly made false statements to regulators, investors,
investigators, and an outside accountant. The Government
also contends that it presented sufficient evidence showing
that Mr. Wilson knew about and directly participated in the
Alchemy scheme.
14 No. 17-1076
Upon examination of the record, we must conclude that
Mr. Wilson has failed to overcome the very significant hurdle
that faces a defendant on a Rule 29(c) motion. See United States
v. Tucker, 737 F.3d 1090, 1092 (7th Cir. 2013) (discussing the
high bar that faces an appellant raising an insufficiency
challenge). Viewed in the light most favorable to the
prosecution and without questioning the jury’s credibility
determinations, the evidence is more than sufficient to sustain
a conviction on all counts. We now turn to a specific
examination of each of the charges.
1. Counts 1 through 14
Counts 1 through 14 all require the Government to prove
essentially the same thing: that Mr. Wilson knowingly and
willfully made untrue statements of material fact—or omitted
material facts in a manner that was misleading—in the
purchase, offer, or sale of securities and in required SEC
filings. Mr. Wilson has not contested the other elements of
charges 1 through 14. In support of the district court’s ruling,
the Government invites our attention to trial testimony and
exhibits indicating that Mr. Wilson knew the e-Bio plant was
not manufacturing biodiesel but rather buying it from a third
party. If Mr. Wilson indeed knew these facts, then his
contrary statements to Imperial investors, accountants, and
the SEC were materially false.
As the district court noted, the evidence at trial established
that Mr. Wilson made the following representations: (1) e-Bio
manufactured millions of gallons of biodiesel at its own plant;
(2) the e-Bio plant used transesterification to convert raw
feedstock into biodiesel; (3) the transesterification process
No. 17-1076 15
required e-Bio to purchase methanol and raw feedstock; and
(4) e-Bio produced and sold glycerin, a necessary by-product
of transesterification. Mr. Wilson does not challenge whether
he made these representations or whether they are false.
Instead, he claims ignorance in order to challenge the
“knowing” and “willful” aspect of his false statements.
To show that Mr. Wilson knew these representations were
false and thus acted “knowingly and willfully,” the
Government points, in part, to the following evidence:
 Craig’s testimony that prior to the Imperial acquisition
he told Mr. Wilson the plant was not producing
biodiesel.
 The Make vs. Buy spreadsheet, which Craig emailed to
Mr. Wilson illustrating that it was more profitable to
buy and resell biodiesel rather than manufacture it
from feedstock.
 Craig’s testimony that he discussed the Make vs. Buy
spreadsheet with Mr. Wilson, who inquired about
increasing output of the “bottom product” (i.e., the
product resulting from buying and reselling biodiesel).
 Mr. Wilson’s multiple visits to the e-Bio plant, where
nothing was hidden from him, including the dormant
state of the plant’s production equipment or the
deliveries of biodiesel to and from storage tanks.
 Chepurko’s testimony that Mr. Wilson told Furando
the e-Bio plant was not operating, and Pattison’s
testimony that she and Mr. Wilson discussed the
difficulties of getting it operational again.
 Mr. Wilson’s receipt of an email about the lack of
16 No. 17-1076
glycerin produced at the plant and his recognition in
response that e-Bio must not have been making its own
biodiesel.
In the face of this evidence, Mr. Wilson submits that he did
not know about the Alchemy scheme and that his false
representations were made in good faith. He emphasizes the
undisputed fact that the Alchemy cover-up started before
Imperial acquired e-Bio and maintains that “common sense
dictates[ that] the Duceys had no incentive to disclose the
Alchemy scheme to” him.13 Mr. Wilson also compares his
asserted ignorance with the knowledge of Scott Hlavacek, an
SEC accountant who spent three years tracking and analyzing
e-Bio’s Ghost Loads to uncover the fraud. Mr. Wilson argues
that he could not have discovered the fraud on his own, given
his lack of knowledge about the industry and lack of access to
the documents used by Hlavacek.
None of these arguments show that the Government’s
evidence was insufficient as a matter of law. Although one
can argue that the Duceys would not have disclosed their
fraud to Mr. Wilson, a reasonable jury could have found
otherwise. The jury might have concluded, for example, that
the Duceys disclosed the illegal venture to Mr. Wilson
because they were sure that he eventually would discover it
on his own and thought it better to convince him to join their
scheme rather than report it. Mr. Wilson’s argument about
Hlavacek is also deficient: the prosecution did not suggest
that Mr. Wilson discovered the fraud through a longitudinal
investigation like that conducted by Hlavacek. Rather, the
Government suggested that Wilson was told about the
13 Appellant’s Br. 23.
No. 17-1076 17
scheme directly by co-conspirators. Therefore, it does not
matter if Mr. Wilson “did not have the time or the resources
to conduct the same analysis [as] Hlavacek.”14
The Government also presented evidence that Mr. Wilson
knew about and directly participated in the Alchemy scheme.
Specifically, the Government points to an audio tape of a
secretly recorded meeting during which Furando explained
that the scheme is called Alchemy and that “Big oil does not
care” if the RINs are real so long as its regulatory obligations
are met.15 Multiple witnesses testified that Mr. Wilson was
present at this meeting and identified a voice on the tape as
his. And the jury was able to compare the tape recording to a
separate exemplar of Mr. Wilson’s voice. Given the
reasonable inferences that could be drawn from this evidence,
it was not irrational for the jury to conclude that Mr. Wilson
was aware of the Alchemy scheme.
The Government also identifies evidence that Mr. Wilson
knew about and actively tried to cover up the Ghost Loads. It
points to testimony that Mr. Wilson had discussions with
Craig and Furando about the Ghost Loads and ways to
mitigate the risks by removing e-Bio’s name from the trucks,
bribing truck drivers, and providing a fax machine for the
drivers to receive falsified documents. The Government also
notes a number of documents in Mr. Wilson’s possession that
evidenced the Ghost Loads, such as falsified bills of lading,
invoices that e-Bio issued to Caravan, and spreadsheets
analyzing the profitability of Ghost Loads. Although this
documentary evidence does not necessarily conflict with
14 Id. at 25.
15 Tr. Ex. 148, at 2–3.
18 No. 17-1076
Mr. Wilson’s claim that he was ignorant of its incriminating
nature, it does provide additional evidence from which a
rational jury could infer that Mr. Wilson knew about the
Ghost Loads and the broader scheme.
2. Counts 16–17 and 19–20
Mr. Wilson also challenges the sufficiency of the
Government’s evidence showing that he knowingly and
willfully made materially false or misleading statements to,
or omitted material facts from, an accountant in connection
with the preparation and filing of reports for the SEC. In
particular, he challenges the Government’s contentions that
he lied when he told John Samyn, an accountant hired by
Imperial, that (1) he was unaware of any allegations of fraud
or suspected fraud affecting Imperial or its subsidiaries; (2) he
had provided Samyn with all the records regarding the
business of Imperial and its subsidiaries; and (3) he had
provided Samyn with all minutes and summaries of meetings
by Imperial’s Board of Directors.
Mr. Wilson addresses only the first contention. He claims
that he did not hide any allegations of fraud or suspected
fraud from Samyn. Specifically, Mr. Wilson emphasizes that
he did not receive a written report from Ashley Player, the
outside consultant hired by Platinum, questioning the
validity of the RINs generated by e-Bio. Absent such a report,
Mr. Wilson argues, he could not have disclosed its contents to
Samyn.
Although a written report would have enhanced the
probity of the Government’s evidence, it hardly precludes the
reasonable conclusion that Mr. Wilson knew about Player’s
No. 17-1076 19
suspicions and failed to disclose them to Samyn. The
Government provided adequate evidence for the jury to
conclude that Mr. Wilson was aware of such third-party
suspicions. It cited, for instance, an email between Mr. Wilson
and Steinberg, an investment professional for Platinum, in
which Mr. Wilson recognized Player’s concern that e-Bio’s
products were not eligible for RINs.16
Mr. Wilson also notes that Steinberg told him that
Platinum was not accusing Imperial of criminal conduct.
Again, although such an accusation would have enhanced the
Government’s case, its absence does not overcome the other
evidence that Mr. Wilson knew about Player’s suspicions. The
Government did not need to establish definitely that
Steinberg accused Imperial of fraud; it merely needed to
present evidence from which a reasonable jury could
conclude that Mr. Wilson knew about suspicions of fraud and
did not disclose them to Samyn.
Finally, Mr. Wilson argues that he was not required to
disclose to Samyn a particular allegation, made by an outside
consultant, that the Ducey brothers were selling fuel at
below-market prices to a former principal of e-Bio.
Mr. Wilson argues that he was not required to disclose this
allegation to Samyn because he had looked into it and had
16In this particular email exchange, Mr. Wilson refers to the “off[-]spec
products [that e-Bio was] purchasing as feedstocks.” Tr. Ex. 68, at 2.
Off-spec biodiesel is different from the RIN-less B99 that e-Bio was
actually purchasing from Caravan; however, as Player explained in her
testimony, it is still odd for a biodiesel production plant to use off-spec
fuel when generating RIN-valued B100. See R.168 at 232–34 (Trial Tr. vol.
3 at 617–19).
20 No. 17-1076
determined that it was baseless. However, the evidence
shows that Samyn asked Mr. Wilson about “any allegations of
fraud or suspected fraud”—not just well-supported
allegations.17 The Government also presented an August 2011
communication between Mr. Wilson and Imperial’s Board of
Directors, in which Mr. Wilson detailed the allegations above.
Given Mr. Wilson’s recognition that the allegations
warranted a report to the Board, the jury reasonably could
have concluded that he knowingly failed to disclose them to
Samyn in the fall of 2011.
Furthermore, aside from broad claims that he was
unaware of Alchemy, Mr. Wilson does not challenge the
Government’s evidence that he failed to give Samyn all of
Imperial’s pertinent business records and board meeting
minutes. For instance, the Government introduced minutes
from an August 2011 board meeting where Mr. Wilson
discussed the allegations of fraudulent transactions between
e-Bio and a former principal. In conjunction with those
minutes, the Government also introduced a letter from
October 2011, in which Mr. Wilson certified to Samyn’s
accounting firm that he had provided it with all minutes from
Imperial’s director meetings. This documentation provided
further evidence from which the jury could infer that
Mr. Wilson acted knowingly and willfully when making
materially false statements to an outside accountant.
17Tr. Ex. 85 (Imperial Fraud Risk Information Form dated September 5,
2011), at 3 (emphasis added); see also Tr. Ex. 104 (Imperial Management
Certification Letter dated October 21, 2011), at 2 (representing that
Imperial had “no knowledge of any fraud or suspected fraud”).
No. 17-1076 21
3. Count 21
The last count charged Mr. Wilson with knowingly and
willfully making false statements to Government agents, in
violation of 18 U.S.C. § 1001. The Government identified three
specific statements made by Mr. Wilson during an interview
by federal investigators on May 29, 2012: (1) that he never
compared the cost of off-spec biodiesel to feedstock; (2) that
he did not compare the cost of reprocessing off-spec methyl
ester to making biodiesel from feedstock; and (3) that he did
not know if reprocessing off-spec methyl ester was more
profitable than making biodiesel from feedstock. Mr. Wilson
does not challenge whether he made these statements; rather,
he argues that they were not technically false.
To prove the falsity of these statements, the Government
primarily relies on the Make vs. Buy spreadsheet that
Mr. Wilson received from Craig. Mr. Wilson does not
challenge whether the contents of the spreadsheet include the
comparisons above. He instead argues that his receipt of the
spreadsheet does not prove that he actually read it or
“personally contemplated the comparisons.”18 He also claims
that the Government did not prove that he remembered
receiving the spreadsheet at the time he was interviewed
because the Government did not ask him specifically about
receiving it.19 Mr. Wilson relies upon our opinion in United
18 Appellant’s Br. 14.
19 Mr. Wilson also points out that “the price of feedstock was variable, so
it is entirely possible there were times when it was more profitable to make
biodiesel from feedstock than reprocessing off-spec methyl ester.” Id. at
36. Although this may be true, it does not conflict with the Government’s
evidence that Mr. Wilson compared the profitability of the two processes.
22 No. 17-1076
States v. Rahman, 805 F.3d 822 (7th Cir. 2015), to argue that,
technically, he did not lie.
In Rahman, a restaurant owner was convicted of falsely
telling a Government agent that his laptop, which contained
business records, was in his restaurant when the building
burned down. 805 F.3d at 837. Because the Government later
uncovered a laptop without business records at the
defendant’s home, the jury concluded that the defendant had
lied. We reversed the conviction on appeal, noting the
ambiguity in the Government’s question and resultant
insufficiency of the evidence showing that the defendant had
lied. Specifically, the Government had failed to ask whether
the defendant owned multiple laptops and, if so, which ones
were in his restaurant during the fire. It was not unlikely that
the defendant had a laptop with business records at work and
another laptop for personal use at home. Therefore, we held
that the Government did not establish beyond a reasonable
doubt that, when questioned by the agents, the defendant had
been referring to the laptop that was later found in his home.
Id. at 839.
Mr. Wilson attempts to compare his situation to that of the
defendant in Rahman. He argues that the Government should
have asked more specific questions, such as whether he
analyzed and recalled the cost comparisons reflected in the
Make vs. Buy spreadsheet. But the Government’s inquiries
here did not elicit any ambiguity comparable to the ambiguity
in Rahman. Even if Mr. Wilson did not personally run the
analysis measuring the individual costs of making versus
Indeed, a jury could conclude that variable prices are precisely the kind of
factor that would motivate a business to run cost comparisons.
No. 17-1076 23
buying/reselling biodiesel, the jury reasonably could have
concluded that, using this specific spreadsheet, he
“compared” the two processes. This conclusion was
supported by ample circumstantial evidence. See United States
v. Trudeau, 812 F.3d 578, 590 (7th Cir. 2016) (noting that
circumstantial evidence may be used to establish a
defendant’s state of mind), cert. denied, 137 S. Ct. 566 (2016). In
addition to the Make vs. Buy spreadsheet, the Government
presented testimony from Craig that he discussed the
contents of the spreadsheet with Mr. Wilson and that
Mr. Wilson asked him how to obtain more gallons of the
“bottom product” (i.e., the product obtained via the buy/resell
scheme).20
Finally, Mr. Wilson challenges the materiality of his false
statements but offers very little by way of support. He
emphasizes that the investigators failed to ask him whether
he recalled the Make vs. Buy spreadsheet during his
interview. Mr. Wilson seems to argue that because the
investigators did not call his attention to the spreadsheet, his
“alleged statements in the interview were not connected to
the spreadsheet” and thus were not material.21
This argument misconstrues the concept of materiality.
The true test for materiality under § 1001 is whether the
statement in question had a “natural tendency to influence, or
[was] … capable of influencing” the federal agency. United
States v. Dick, 744 F.2d 546, 553 (7th Cir. 1984); United States v.
DiFonzo, 603 F.2d 1260, 1266 (7th Cir. 1979). Mr. Wilson’s
statements to Government agents clearly had a “natural
20 R.169 at 215 (Trial Tr. vol. 4 at 896).
21 Appellant’s Br. 38.
24 No. 17-1076
tendency” to influence their investigation of Imperial. The
agents were investigating whether the company’s
representations to the SEC about its production of biodiesel
were true. If Mr. Wilson, as the CEO of Imperial,
acknowledged that he had compared the costs of producing
biodiesel to the costs of buying and reselling it, that disclosure
certainly would have affected the investigation. One of the
investigators confirmed as much in her testimony.22
Therefore, the jury was entitled to conclude that Mr. Wilson’s
statements were material.
CONCLUSION
Mr. Wilson’s claim that the Government did not present
evidence sufficient to support his conviction fails to overcome
the substantial burden facing a defendant who challenges a
jury’s verdict. He maintains that he was unaware of the
Alchemy scheme and that he made any false statements in
good faith. His arguments merely demonstrate that the jury
could have drawn contrary inferences, but that is not enough
to overturn his conviction.
The Government has pointed to ample circumstantial
evidence that Mr. Wilson knew about the Alchemy scheme,
or at least knew that e-Bio was not producing its own
biodiesel through transesterification. Based on this evidence,
a rational jury could have concluded that Mr. Wilson
22R.171 at 75–76 (Trial Tr. vol. 6 at 1270–71) (testimony by Lorna Eagle, a
special agent for the Internal Revenue Service, that truthful answers by
Mr. Wilson would have been important to the Government’s investigation
and would have demonstrated “his knowledge of what was going on and
his motive or the motive of the plant”).
No. 17-1076 25
knowingly and willfully told false statements to investors,
accountants, investigators, and the SEC. It was up to the jury
to evaluate the witnesses’ credibility, weigh the evidence, and
draw reasonable inferences. That it did, and we will not
disturb its finding.
Accordingly, the judgment of the district court is affirmed.
AFFIRMED