EMI Owner Sentenced to Five Years in Prison in Multi-Million-Dollar Fraud Scheme
SPRINGFIELD, IL—U.S. District Judge Sue E. Myerscough today sentenced Michael R. Keebler, owner of Environmental Management of Illinois, Inc. (EMI), Springfield, Ill., to serve five years in federal prison for a scheme that defrauded the Illinois Environmental Protection Agency of millions of dollars. The scheme, over a period of 12 years, from 2001 to 2013, swindled money from a fund administered by Illinois EPA to clean up sites contaminated by leaking underground storage tanks.
Judge Myerscough allowed Keebler to remain on bond pending his report to the federal Bureau of Prisons no later than Sept. 24, 2015. Keebler was ordered to remain on supervised release for a period of three years following his release from prison.
Keebler, of Sherman, Ill., was also ordered to pay restitution of no more than $13,363,665 to the Illinois EPA. Restitution will be ordered to be paid jointly and severally with Keebler’s co-defendants, EMI founder, Eric M. Andrews, of Springfield, and his brother, Joel T. Andrews, of New Berlin, Ill. Each pled guilty on Mar. 2, 2015, to one count of conspiracy to commit mail fraud. Sentencing for the Andrews brothers is scheduled on Oct. 2, 2015. Keebler entered pleas of guilty on Feb. 27, 2015, to two counts of conspiracy to commit mail fraud.
The U.S. EPA has a cooperative agreement with the State of Illinois to administer the UST (underground storage tanks) program. IEPA and the Illinois Office of the State Fire Marshal share administration of the UST fund which assists tank owners and operators with the cleanup costs of petroleum leaks from USTs. The State Fire Marshal administers the preventative and permitting aspects of the program. If there is a spill or leak, IEPA is responsible for oversight of the cleanup investigation and the corrective action, in order to clear the property for use again. State taxes and fees paid on the purchase of gasoline fund the Leaking UST (LUST) program.
Joel Andrews founded EMI in 1997 and served as president, and Eric Andrews joined in 1999 as vice-president. In April of 2001, professional engineer Michael Keebler joined the firm. In 2006, the firm was sold to Michael Keebler, who has remained as the firm’s principal owner and president. EMI is located at 1154 N. Bradfordton Road, Springfield. The environmental consulting firm worked with property owners to clean up property contaminated by petroleum leaks, spills, or overfills from underground storage tanks. The firm then sought reimbursement of its costs to remediate the land from a fund administered by a designated section within Illinois EPA.
According to plea agreements filed by the parties, Michael Keebler, and Eric and Joel Andrews each admitted that they conspired to defraud the LUST fund by artificially inflating expenses they incurred in remediating property. For example, as principals of EMI, they admitted they reached agreements with their vendors to submit two invoices for certain services: one invoice listed the real costs of the service provided and the payment to be made by EMI, and a second invoice which inflated the amount of work performed and supplies used, the amount charged for the work, or both. The inflated invoice would then be provided to Illinois EPA for reimbursement. Keebler and the Andrews would also pay certain vendors a reduced rate, but misrepresent to the Illinois IEPA that they had paid full price. At other times they would simply create or modify an existing invoice to reflect a higher charge than was actually paid and would submit that to IEPA for reimbursement.
In a separate but related case, Michael Keebler’s brothers, Duane T. Keebler, of Maryland Heights, Mo., and Joseph R. Keebler, of Carbondale, Ill., each pled guilty on Feb. 20, to one count of conspiracy to commit mail fraud. Both Duane and Joseph Keebler have agreed to a loss amount in their cases, and will pay restitution in the total amount of $179,438.They are scheduled to be sentenced on Aug. 24, 2015.
Another defendant, Jeremy L. VanScyoc, of Springfield, was an engineer for EMI and participated in the fraud.He waived indictment on Mar. 10, 2014, and pled guilty to one count of conspiracy to commit mail fraud. VanScyoc admitted that after he joined EMI he agreed to engage in the fraud scheme by inflating subcontractor invoices. On June 11, 2015, VanScyoc was sentenced to one day in prison; two years’ supervised release; and was ordered to pay restitution in the amount of $262,032.
The case is being prosecuted by Assistant U.S. Attorneys Patrick D. Hansen and John E. Childress. The charges are the result of a two-year investigation by the Federal Bureau of Investigation and the U.S. Environmental Protection Agency, Criminal Investigation Division.