Man Convicted in $9 Million Cow Manure Ponzi Scheme

A California man was sentenced Monday to more than six years in prison for running an $8.75 million Ponzi scheme that hinged on a nonexistent plant supposed to make green energy from cow dung, federal prosecutors said.

For five years, Raymond Holcomb Brewer falsely claimed to be an engineer who ran a company that built anaerobic digestion plants, which convert manure to biogas, the U.S. Attorney’s Office for the Eastern District of California said in a statement Monday.

Mr. Brewer, 66, of Porterville, Calif., told his investors he was building the plants and would generate millions of dollars in revenue by selling the biogas, the statement said. He told the investors they would receive two-thirds of the profits, as well as tax breaks.

“None of this was true,” Phillip A. Talbert, U.S. Attorney for the Eastern District of California, wrote in a memorandum of conviction. “Mr. Brewer didn’t start building a single digester. He just took his investors’ money and ran.”

Mr. Brewer, who pleaded guilty on allegations of fraud in February, it spent money on a 3,700-square-foot custom home in California, a 12-acre tract of land in Montana and new Dodge Ram pickup trucks, federal prosecutors said.

Anaerobic digesters use bacteria to break down organic material, producing a gas mainly composed of methane and carbon dioxide. New York City and other places around the world have turned to the process to deal with sewage, food scraps and agricultural waste, generating a renewable natural gas.

Mr. Brewer’s elaborate plan to pretend to preside over such a trial began in 2014, according to a federal indictment. He handled things primarily through a Wyoming company headquartered in California. The company was named CH4 Power, after the chemical formula for methane.

Mr. Brewer went to great lengths to convince his investors that his manure project was real, Mr. Talbert said. Mr. Brewer took them on tours of dairies where he said he was going to build digesters, and presented them with bogus leases he said he had made to dairy owners across California. He obtained stock photos of fermenters and sent them to investors, sometimes altering the images so that they appeared to show construction progress. He fabricated a detailed schedule for the project to show the alleged progress, court documents showed.

After receiving money from his investors, Mr. Brewer to hide it by transferring it to other bank accounts he had opened in the names of other business entities, relatives and an alias, Mr. Talbert.

Mr. Brewer’s scheme began to fail in 2019, when some of his investors found out that he was returning money received from other investors, even though they had not authorized him to use it in this way.

The investors of Mr. Brewer received multiple civil judgments against him that year, Mr. Talbert. Mr. Brewer responded by closing CH4 Power, transferring his remaining assets to his wife’s name, obtaining a fraudulent business loan using stolen investor money and fleeing to Montana, where he lived part-time, according to the indictment.

Even then he continued to engage in fraud, claiming to build up more manure processing through a new company he set up with an alias, Mr Talbert said.

Sheriff’s deputies arrested Mr. Brewer in Montana in 2020 and held him on 24 counts, including wire fraud, money laundering and aggravated identity theft.

But Mr. Brewer continued to lie, telling authorities that they had the wrong man and that he was a Navy veteran who had once saved several soldiers from a fire by blocking the flames with his body, Mr. Talbert wrote in the memorandum of the conviction. . Mr. Brewer has since admitted that these lies were designed to curry favor with law enforcement, Mr. Talbert said.

“He is a fraud through and through,” wrote Mr. Talbert, “and should be punished harshly to be both specific and generally deterrent.”

Mr. Brewer was sentenced to six years and nine months in prison for the fraud scheme and he was ordered to pay $8.75 million in restitution to the investors who fell victim, Mr. Talbert said.