Feds: Owner of North American Power Group pleads guilty to taking DOE money

The U.S. Attorney for the Western District of Pennsylvania announced Oct. 21 that the president and owner of power plant developer North American Power Group Ltd. (NAPG) has pleaded guilty in federal court to a charge of filing a False Claim against the United States.

United States Attorney David J. Hickton said that Michael J. Ruffatto, 70, of Englewood, Colorado, pleaded guilty to one felony count before U.S. Chief District Court Judge Joy Flowers Conti.

In connection with the guilty plea, the court was advised that in December 2009, the U.S. Department of Energy’s National Energy Technology Laboratory, located in Pittsburgh, Pennsylvania, awarded a multi-million dollar cooperative agreement to NAPG, a corporation headquartered in Denver, Colorado, that is owned and controlled by Ruffatto. The purpose of the agreement was to study the carbon sequestration potential of an 880-acre site in Campbell County, Wyoming. The agreement required NAPG to conduct field studies and to drill wells necessary for the study.

Instead of performing the work required under the cooperative agreement, Ruffatto fraudulently transferred millions of dollars of award monies into his personal bank account and used the award monies to fund an extravagant lifestyle, said Hickton. Ruffatto secretly filtered millions of dollars of award monies through Ruffatto’s North American Land and Livestock LLC while falsely representing to DOE that the subsidiary was doing work on the project.

“Protecting federal taxpayer funds dedicated to energy-related development projects is an important responsibility,” said Hickton. “Recovery Act funds were awarded to spur job creation, not to provide personal enrichment.”

Chief Judge Conti scheduled sentencing for Feb. 3, 2017. The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. Pending sentencing, the court released Ruffatto on bond.

DOE’s Office of Inspector General conducted the investigation leading to the conviction in this case.

In a related matter, the Wyoming Department of Environmental Quality said in a Sept. 13 notice that an Oct. 6 hearing over an air permit issued years ago for the coal-fired Two Elk project has been cancelled since project developer Two Elk Generation Partners LP has voluntarily surrendered any rights to the permit. Two Elk was a project of North American Power Group.

The hearing was to be held by the state Industrial Siting Council on a permit first issued in 1997. The council at the Oct. 6 hearing was due to look at whether to revoke the permit for an air-cooled, waste coal-fired power generation facility in Campbell County. The permit required phased construction to commence by April 1, 2015. Two Elk did not meet that deadline.

The plant was to be located east of Arch Coal’s existing Black Thunder mine in the Powder River Basin and was to be fired with waste coal that is produced by nearby mining operations but is not high enough in quality to sell and transport elsewhere.

Says the North American Power Group website: “Michael J. Ruffatto established North American Power Group, Ltd. (NAPG) in Englewood, Colorado in 1992. Mike Ruffatto has over 30 years in the gas, oil, and energy trading and power generation industries, including both regulated and unregulated businesses. He served as a Board of Trustees member of the Western Electricity Coordinating Council from 1999 to 2002.” The website says the company controls a handful of biomass-fired power plants in California.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.