DENVER – LAWFUEL – Press Release Service – Bill Leone, United States Attorney for the District of Colorado; Kathleen Roberts, Postal Inspector in Charge in Denver; Terry L. Stuart, Special Agent in Charge of the IRS-Criminal Investigation, Denver Field Office; and Stephen Nesbitt, Assistant Inspector General for Investigations for the Environmental Protection Agency (EPA), announced that WILLIAM C. ORR, age 54, of Parker, Colorado, was indicted by a federal grand jury in Denver late last week on mail and wire fraud, and false statement charges related to allegedly defrauding investors and the United States government concerning ORR’s proposed fuel additive. ORR also faces charges of alleged tax evasion and failure to file tax returns.
According to the indictment, WILLIAM C. ORR was the founder, President and a Board of Director for Octane International, Ltd., a Colorado corporation whose primary business was raising money for, and purportedly developing an alternative fuel additive called “vapor phase combustion (VPC).” ORR solicited money from investors, making a variety of claims regarding the proven efficacy of VPC.
As part of the scheme to defraud, the defendant also prepared periodic newsletters that were sent to past and potential Octane investors, in which ORR falsely represented the results of scientific testing regarding VPC, and falsely represented that companies like Exxon, Enron, and Prudential were interested in making substantial investments in VPO or entering a partnership with Octane. According to the indictment, during the period of January 1998 through December 2004, more than 43 people invested approximately $559,200 in Octane, based on fraudulent pretenses, representations and promises made by ORR. ORR caused the investors’ checks to be deposited into Octane’s checking account, and then transferred virtually all investment monies into his personal bank account, which he spent for his personal expenses and certain business expenses.
ORR also successfully lobbied members of Congress and other employees of the United States government, and thereby obtained a $3.6 million earmark to be used for further testing on VPC. ORR created the National Alternative Fuels Foundation (“NAFF”) as a non-profit entity, to utilize the money from the earmarked grant. The grant was administered by the Environmental Protection Agency (EPA). The indictment alleges that to obtain the grant funds, ORR caused a grant proposal and other documents to be submitted to the EPA, which he knew contained material falsities, including the false scientific test results for VPC. Between late December 2001 and later December 2004, the EPA disbursed approximately $2,073,420 in funds to NAFF.
The indictment also alleges that ORR evaded income taxes for calendar years 1999, 2000, and 2002 through 2004, and failed to file income tax returns for calendar years 1999 through 2004, despite having personal income of over $100,000 each year.
Postal Inspector in Charge Kathleen Roberts said, “It is our mission to protect the integrity of the U.S. Mails and to vigorously pursue instances where the mails are used to mislead and defraud investors.”
“People who create elaborate schemes that have no purpose but to mislead others and defraud the IRS run the risk of prosecution,” said Terry L. Stuart, Special Agent in Charge of the IRS-Criminal Investigation Denver Field Office.
“The EPA Inspector General will continue to focus on the integrity of EPA’s grant programs to ensure that government funds are utilized properly and in accordance with the law,” said Stephen Nesbitt, EPA Assistant Inspector General for Investigations.
WILLIAM C. ORR faces ten counts of mail fraud, four counts of wire fraud, and three counts of making false statements, each of which count carries a penalty of not more than 5 years incarceration, and not more than a $250,000 fine, as well as restitution. He also faces five counts of tax evasion, each of which carries a penalty of not more than 5 years incarceration, and not more than a $100,000 fine, and six counts of failure to file tax returns, each of which carries a penalty of not more than 1 year incarceration, and not more than a $100,000 fine.
The case is being prosecuted by Assistant United States Attorney Patricia Davies.
The charges are only allegations, and the defendant is presumed innocent unless and until proven guilty.