When Ray Brewer was looking to make a ton of money, he tapped into the renewable energy industry. From March 2014 through December 2019, Brewer ultimately stole more than $8 million from investors by claiming to build anaerobic digesters on dairies in California and Idaho.
Brewer orchestrated a company that allegedly built anaerobic digesters to convert cow manure into usable energy. According to Brewer, these digesters could then generate revenue and returns for company investors. Brewer told investors they would receive rights to the natural gas, Renewable Energy Credits (RECs), and tax incentives produced by the digesters.
But Brewer never built the digesters; they didn’t even exist. It was a scam—and Brewer used the money from investors for his own personal expenditures.
As part of the scam, Brewer falsely claimed to be an engineer and sought investors who had ties to the dairy industry or green energy industry. Brewer invested in paid advertisements in trade publications and industry-specific online advertisements. He also targeted investors at industry-specific conferences.
According to the FBI Sacramento Case Agent, “Brewer established a pattern of fraudulent behavior over many years. He consistently exaggerated his qualifications, was repeatedly untruthful, and falsified information.”
To convince investors that his company and digesters were real, Brewer created a slew of fake documents, including fake digester construction schedules, invoices for project-related costs, and digester power generation reports. He found stock photos of digesters in different stages of completion and sent them to his investors.
Brewer also took investors on tours of dairies where he claimed he would build the digesters. And while Brewer had legitimate lease agreements with some dairies, other agreements were completely made-up.
“There was just a myriad of lies and documents that were passed along to these investors to convince them that it was all real,” said the case agent. “For instance, Brewer sent at least one investor a forged contract with a multinational company in which that company purported to agree to purchase byproducts generated by these anaerobic digesters—when it's processed, you get the methane, but then the byproducts are essentially a liquid fertilizer and compostable material.” In other words, investors could profit off the methane and these additional byproducts.
In addition, Brewer altered bank letters, in one case changing a letter to say that the bank had committed to lending him up to $100 million to build his anaerobic digestors. However, as the case agent explained, this was not the reality: “The real letter from the bank actually states that the bank had not committed to lending any money to Brewer, and in fact needed to conduct due diligence before they could make a final decision as to whether or not they would lend him money or open any type of joint credit.”
When investors sent Brewer money, he transferred the funds into multiple bank accounts he had opened under different identities and with fake descriptions to hide the locations, sources, ownership, and control of the money.
In some instances, Brewer claimed to refund investors all or some of their money—but the reality was that he was paying off his initial investors with money from his newest investors while keeping a chunk of money for himself. This type of financial fraud is referred to as a Ponzi scheme.
Brewer used the money he kept for himself to buy a 12-acre plot of land in Montana, a 3,700 square foot custom home in California, and new pickup trucks.
Investors became skeptical when they weren’t getting the full return on investments as Brewer promised. They wanted answers and filed civil lawsuits against Brewer. When Brewer found out, he moved to Montana and assumed a new identity. He placed his assets in his wife’s name and in other aliases he created. For instance, he used his wife’s name when he purchased a house and land in Montana.
What are Anaerobic Digesters?
Anaerobic digestion is a natural process that occurs when organic material—in this case, cow manure—breaks down in the absence of oxygen. Anaerobic digesters, sometimes referred to as “anaerobic digestion systems,” are large machines that store the organic material in a sealed container where the anaerobic digestion takes place. The digestion process leaves two key byproducts:
- Biogas: Primarily composed of methane (a component of natural gas), the energy in biogas can be converted to heat and electricity to power engines, fuel boilers, furnaces, and more. Biogas can also be purified to generate renewable natural gas that can be sold and used in a natural gas distribution system, compressed and used as vehicle fuel, or further processed to create other types of biochemicals and bioproducts.
- Digestate: The residual material left after the digestion process, digestate is composed of liquids and solids for use in products ranging from fertilizer, animal bedding, bioplastics, and more.
Biogas can be sold on the open market as green energy, and some states offer tax benefits. The biogas produced can also count toward Renewable Energy Credits (RECs), a market-based instrument that represents the property rights to the environmental, social, and other non-power attributes of renewable energy generation. Companies may purchase RECs to meet green energy regulatory, contractual, and initiative requirements or commitments.
Brewer also used an alias to start a green energy company in Montana, where he again purported to build digesters. Around June 2018, an entity in the green energy certification space noted some anomalies regarding renewable energy that pertained to Brewer’s company and brought it to the attention of federal law enforcement. The FBI worked with the IRS to investigate.
“...Things that seem too good to be true usually are. Trust your instincts and back away if it feels off. With due diligence, you can avoid being pulled into a scam situation.”
FBI Sacramento Case Agent
Protecting Yourself from Financial Fraud and Scams
When it comes to protecting yourself from falling victim to a scam, the case agent advises the following:
“Scammers may seem slick at first, but they often leave traces that eventually lead to their downfall. If someone seems questionable, do your research by talking to past associates and looking for reviews or legal complaints. When possible, physically verify the claimed operations associated with an investment.
Scammers tend to repeat their tactics, meaning they likely have unhappy customers or partners in their wake. Don't ignore red flags—things that seem too good to be true usually are. Trust your instincts and back away if it feels off. With due diligence, you can avoid being pulled into a scam situation. Scammers may be adept at covering their tracks, but the trail of victims they leave behind eventually catches up to them.”
To report any type of business or investment scam: