Two Iowa companies sentenced in wire fraud scheme involving ethanol plant

Smith was sentenced to more than 14 years in federal prison.
Smith was sentenced to more than 14 years in federal prison.(MGN)
Published: Sep. 26, 2022 at 3:00 PM CDT
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CEDAR RAPIDS, Iowa (KCRG) - Two companies received sentences after pleading guilty to wire fraud in federal court last Wednesday.

At the plea hearing, it was found that Darrell Smith was a broker and adviser for several investment firms and a corporate officer of companies Energae, LP and I-Lenders LLC.

From 2010 to 2015, Smith was found to have perpetrated a fraud scheme in which he made withdrawals of over $2.4 million in funds from ten of his investment clients’ accounts without those clients’ knowledge or authorization. Smith used the stolen funds to pay expenses related to the operation of Permeate Refining, LLC, which operated a now-defunct ethanol plant in Hopkinton, Iowa.

In order to transfer funds from client accounts, Smith either forged his clients’ signatures on the authorizations or used pre-signed, blank authorization forms without the clients’ approval.

Each company was sentenced to one year of probation and order to pay a total of $1,056,909.68 in restitution to 10 victims. A $2,405,409.68 forfeiture money judgment was also imposed on each corporation.

Smith was sentenced to more than 14 years in federal prison.