Evansville-based Imperial Petroleum Inc. has been ordered to pay nearly $32 million to the Securities and Exchange Commission after it failed to reply to the SEC’s court filings seeking damages in a biofuels fraud case that resulted in prison time for the former company president.
Senior Judge William T. Lawrence on Friday ordered Imperial to disgorge $26,776,235 in the SEC’s enforcement action along with $5,124,823 in prejudgment interest.
The SEC initiated an the enforcement action against Imperial in 2013, claiming the company had cheated victims out of more than $100 million. The SEC claimed Imperial subsidiary E-biofuels of Henry County falsely claimed it was producing biofuels to fraudulently obtain tax credits and government incentives. The company was accused of passing off biofuels purchased from other sources as its own to claim the credits.
E-biofuels filed for bankruptcy in April 2012, but its founders and Imperial’s former president were sentenced for federal prison in 2016. Former Imperial president Jeffrey Wilson was sentenced to 10 years, while E-biofuels co-founders Chad Ducey was sentenced to seven years in prison and his brother Craig Ducey received a term of six years, two months behind bars.
Wilson’s convictions on 21 counts of securities fraud and making false statements was affirmed in January by the 7th Circuit Court of Appeals.