Evan Knoll, founder and former president of Torco Racing Fuels, pleaded guilty to eight counts of making false claims against the U.S. and one count of bank fraud in the scam. Knoll entered the plea Wednesday in U.S. District Court in Grand Rapids.
Prosecutors said Knoll filed false claims for federal refunds of excise taxes on fuel he said he had purchased. The excise tax of 18.9 cents per gallon is levied on all gasoline sold in the U.S., but people who purchase the fuel for "off-road" use can apply for refunds of the tax.
Knoll falsely claimed to have purchased massive quantities of fuel to get $80 million in refunds since 2002. In addition, he used the refunds to get bank loans, causing the banks to lose $10 million before the IRS stopped the scheme in 2008.
Prosecutors said Knoll used the illegally obtained funds to support a lavish lifestyle — including the purchases of a business jet, large homes in Gaylord and Decatur, a motorcoach and a drag racing car. The items were later seized by the IRS.
"Mr. Knoll's perceived success in the racing industry was based on the money he was stealing from the American people," said Erick Martinez, special agent in charge of the IRS criminal investigation. "Mr. Knoll now faces severe consequences for his actions."
Knoll is scheduled to be sentenced Nov. 12.