Green Power founder sentenced in ‘sophisticated’ $13 million fraud

A serial fraudster who admitted to swindling investors of his Pasco biofuels company was sentenced Tuesday to four years in federal prison.

Michael Spitzauer also is supposed to repay his victims nearly $13 million, according to the plea agreement U.S. District Court Judge Sal Mendoza Jr. accepted Tuesday.

Spitzauer previously admitted in federal court in Richland to failing to file a tax return one year and filing a false tax return another year.

Spitzauer said Tuesday he did not see what he did as wrong but understands now he should have done things differently.

“I did not intend to hurt people, you know,” Spitzauer said. “I just wanted the business to succeed.”

Many of the charges stem from his actions as CEO of Green Power, a Pasco-based company that was reportedly building a waste-to-fuel plant.

The Kennewick man admitted to defrauding investors of $10.4 million and using the money to pay back previous investors, on unauthorized business expenses and for personal expenses such as buying a $1 million Kennewick mansion, furniture, donations and sports tickets.

Spitzauer, 47, was federally indicted on wire and bank fraud, aggravated identity theft, money laundering, tax evasion and lying on his federal tax return. He’s been in federal custody since December 2013.

“When you say that you are sorry, you have a lot of people to be sorry to,” Mendoza said. “Some of them are sitting in this courtroom. That is your family, because you are depriving them of your love and attention.”

A victim in Texas wrote he and his sons are no longer on good terms with each other because of the fraud. They distrust each other and blame each other for the deal that has tainted their name, Mendoza said.

Another Texas victim wrote that he and his wife had to delay their plans to have a child because they could no longer afford to start a family. His plans for graduate studies also have to be put on hold.

A different Texas victim wrote, “This incident has destroyed my relationship with my father.”

A Canadian victim said, “I trusted him, I trusted my money would be safe in a lawyer’s trust account.”

A Chinese victim said the crime has caused them to borrow large amounts of money from classmates and friends that they are not able to pay back.

A victim from Slovenia said that, “This crime affected my ability to maintain my trustworthiness” with others in the company.

A Washington state victim wrote the crime harmed the Department of Ecology and the victim personally because faked emails from them were used by Spitzauer to get money from investors.

“I really do hope you are sincere when you indicate that you are sorry to the victims,” Mendoza said.

But Spitzauer’s history is a cause for concern, he said. “It’s also clear that you have lived a life of deceit.”

Mendoza said he felt the circumstances of the case and Spitzauer’s criminal history would support a sentencing range of five to 6½ years. He described the crime as “sophisticated.”

However, the legal limit for a sentence for the crimes Spitzauer pleaded guilty to was the four years that Spitzauer and federal prosecutors agreed on.

A previous plea deal fell through when Mendoza told Spitzauer he planned to sentence him to more than four years. The second plea deal involved different charges that decreased the sentencing to a four-year maximum.

Spitzauer was convicted of fraud and forgery in 1989 and fraud again in 1991. He was sentenced to eight years in prison, but served just three.

Mendoza said past fraud involved more than $1.5 million. Spitzauer also was arrested at the Frankfurt airport in Germany over a forged passport that claimed he was a diplomatic delegate.

After Spitzauer was released from an Austrian prison, he came to the U.S. and lied on his immigration entry form about his convictions and later lied on his Legal Permanent Resident application.

While he operated his first business venture in the U.S., Spitzauer ran a check fraud scheme, causing losses of more than $400,000, federal prosecutors said.

Mendoza said he could not guarantee that Spitzauer would be sent to the prison in Sheridan, Ore., but he would write a letter making the request. Spitzauer made the request so his family can visit him since his wife’s sister lives in Eugene.

Spitzauer said he wants to serve his time so he can be a better father and repay his victims. However, his victims are unlikely to get their money back.

Court documents shows few of his creditors have been successful in attempts at repayment.

Spitzauer has said he is broke. The public is paying for Spitzauer’s defense in the federal criminal case. And victims of financial fraud rarely get their money back, according to experts.

Spitzauer pleaded guilty to an aggravated felony, which means he will be deported once he finishes serving time in prison, federal prosecutors previously said. Spitzauer previously said he was not waiving his rights to fight any deportation attempt.