Green Power owner faces several federal charges, including fraud, money laundering

By Kristi Pihl, Tri-City HeraldDecember 12, 2013 

The owner of a controversial, stalled biofuels plant in Pasco has been federally indicted for his alleged role in defrauding investors.

Green Power CEO Michael Spitzauer is being held in federal custody as a flight risk after he pleaded innocent to wire fraud, aggravated identity theft and money laundering.

He is accused of defrauding investors of at least $6.7 million during the past seven years, although his debts amount to at least $21.4 million, according to court documents.

Spitzauer, of Kennewick, claimed he developed technology to turn municipal waste into biofuels, although he never finished building a plant in the Port of Pasco's Big Pasco Industrial Park. The state Department of Ecology closed the plant in 2009 because he lacked the necessary air quality permits.

A federal indictment against Spitzauer was filed Tuesday in federal court, including ten counts of wire fraud, two counts of aggravated identity theft and six counts of money laundering. He appeared in court in Yakima on Wednesday.

The Herald was unable to reach Spitzauer's attorney Thursday evening. The phone at Green Power's Pasco office went directly to voicemail.

Spitzauer is accused of entering into deposit agreements with companies in Texas, British Columbia, Slovenia and Ireland and an Australian citizen with the intent of not complying with the terms, according to court documents.

Instead, he used the money to buy a $1 million Kennewick home, repay previous investors and pay for home furnishings, personal expenses, private school tuition and donations, professional sports tickets and memorabilia, legal fees and Green Power business expenses, according to court documents.

He is also accused of stealing the identity of an attorney in Washington, making up emails and letters claiming investors' deposits were being maintained in accounts and accruing interest, according to court documents.

If convicted, federal prosecutors are asking that he be required to forfeit at least $4.5 million representing the proceeds from the alleged wire fraud, his Kennewick home and about $418,300 representing the amount involved in the alleged money laundering, according to court documents.

If found guilty, he could face up to 20 years imprisonment and a $250,000 fine in connection with wire fraud, two years imprisonment and a $250,000 fine in connection with identity theft and 10 years imprisonment and a fine up to twice the amount of criminally derived proceeds in connection with money laundering.

A bail hearing is set for 2 p.m. today in Yakima via conference call.

In Spitzauer's recent Chapter 7 bankruptcy case -- which was closed in October without erasing his debts -- his creditors claim he owes them about $21.4 million. Only about $44,200 was divided among the 14 companies and agencies who filed claims, according to court documents.

Spitzauer owes $42,000 to the state Department of Ecology for the unfinished biofuels plant. He and Green Power also owe the state Department of Labor & Industries more than $35,000 for unpaid wage claims and penalties and more than $80,400 for unpaid workers compensation premiums.

The Port of Pasco has started eviction proceedings against Green Power twice. His current lease runs out on Dec. 31, said Randy Hayden, the port's deputy executive director.

Port of Pasco commissioners have said they will not extend his lease past the end of this month unless he pays the next six-month lease in full by Monday. However, Hayden said the federal indictment would force the commissioners to reconsider the lease even if Spitzauer were to bring the payment.

Spitzauer does not owe the port anything, Hayden said. The port also has a large deposit which should cover cleanup of the premises if needed.

When he was almost evicted earlier this year, port officials found garbage, hay, mulch and mice in the facilities. Part of his most recent lease agreement required him to come into compliance with the allowed use of the premises and to sign an agreement that would in theory allow the port to evict Spitzauer with three days notice.

w To submit business news, go to bit.ly/bizformtch.

w Kristi Pihl: 582-1512; kpihl@tricityherald.com

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