CEO Of Clean Energy Company Sentenced To 72 Months’ Imprisonment For Fraud, Identity Theft, Money Laundering, And Obstruction Of Justice Offenses

SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that United States District Judge Malachy E. Mannion sentenced James Abrams, age 41, of Easley, South Carolina, to 72 months of imprisonment and three years of supervised release following his term of imprisonment.  In June 2023, Abrams was convicted following a nine-day jury trial of all 48 counts in an indictment charging wire and mail fraud, aggravated identity theft, money laundering, unlawful monetary transactions, obstruction of justice, and false statement offenses.

According to United States Attorney Gerard M. Karam, Abrams was the Chief Executive Officer of EthosGen LLC, a company operating in the clean energy industry.  The evidence at trial showed that in 2017 and 2018, Abrams provided extensive forged documents and false information to induce several investors to invest $1,100,000 in his company.  The false documentation included forged teaming agreements and intellectual property licenses, where Abrams substituted his and EthosGen LLC’s name for other companies and individuals, claiming that EthosGen LLC owned technology it did not own.  During a pre-investment due diligence process, Abrams also provided forged tax returns and false financial statements that fabricated an existing customer base, and inflated EthosGen LLC’s historical revenues, business activity, and profitability, thereby making it a more attractive investment.  Abrams further provided forged contracts and purchase orders to potential investors, in which he claimed to have a revenue stream that, in reality, belonged to other companies.  Following an initial investment of $900,000, Abrams provided additional forged contracts and false customer sales documentation to induce an investor to advance another $200,000 to EthosGen LLC.

As a result of those activities, the jury convicted Abrams of 18 counts of wire fraud, and one count of mail fraud.  The jury also convicted Abrams of five counts of aggravated identity theft based on his forging multiple individuals’ signatures and using their personal information on falsified documentation, without their authorization.

The evidence at trial also showed that Abrams used approximately $800,000 of the investors’ money to purchase a personal residence in Easley, South Carolina.  To conceal his financial activities, Abrams transferred $700,000 of the funds through a series of five bank accounts under his control, and opened in the names of shell companies, before purchasing the residence.  He then lied to investors and to his own financial professionals, claiming that he used the funds to purchase company inventory for EthosGen LLC.  Abrams provided investors with falsified company reports, certifications, and accounting records to corroborate his misrepresentations about the use of the investment funds.  He also provided forged bank account statements and false information to both of EthosGen LLC’s sequential Chief Financial Officers, and to its accounting professionals.  In reliance on those forgeries and lies, the accounting professionals unknowingly included false entries in EthosGen LLC’s books and records.  As a result of those actions, the jury convicted Abrams of one count of money laundering, and 12 counts of engaging in unlawful monetary transactions.

The evidence at trial further showed that, upon becoming aware of the Internal Revenue Service’s criminal investigation, Abrams took several steps to obstruct investigators.  Namely, he used misrepresentations and forged bank statements to induce EthosGen LLC financial professionals to create false documents and accounting records that purported to classify his embezzlement of investor funds as a shareholder loan.  Abrams also met with investigators on two occasions and provided materially false statements in response to their questions.  Those false statements included lies about purchasing inventory for EthosGen LLC, that EthosGen LLC owed him $800,000, that he provided his investors with truthful information when they evaluated his company during a due diligence process, and that he was ignorant about the origin of multiple forged contracts that he sent to investors.  As a result of those activities, the jury convicted Abrams of four counts of obstruction of justice, and seven counts of providing false statements to federal investigators.

As part of the sentence, Judge Mannion ordered Abrams to pay the victims of his crimes $1,100,000 in restitution.  Judge Mannion also ordered the forfeiture of the residence Abrams purchased in Easley, South Carolina, with the proceeds of his fraud.

The case was investigated by the Internal Revenue Service’s Criminal Investigations Division.  Assistant U.S. Attorneys Phillip J. Caraballo and Jeffery St John prosecuted the case.

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