NHRA fuel supplier Evan Knoll faces federal fraud charges in alleged tax scam
The complaint, filed Wednesday in Grand Rapids, charges Evan W. Knoll, 51, with bank fraud and false, fictitious and fraudulent claims that are alleged to have occurred between September 2004 and February 2008.
Knoll, court documents show, owned General Sales and Service Inc. in Decatur and did business as Torco Racing Fuels Inc.
Knoll also did business under the names Knoll Gas, Knoll Gas Motorsports Inc., EWK, LLC and eRaceFuels Inc.
In an affidavit filed in support of the criminal complaint, Stephen Michael Corcoran, a special agent with the Internal Revenue Service, says Knoll’s company, between February 1999 and February 2008, filed claims for refunds of more than $106 million in federal gasoline excise taxes.
High-octane racing fuel is exempt from the federal excise tax on gasoline and the IRS “paid out more than $80 million in excise tax refunds" to the company, the affidavit says.
Knoll’s attorney, Paul Vlachos, of Kalamazoo, said Wednesday he had reviewed the complaint and affidavit but declined to comment about any allegations against his client.
Vlachos said Knoll is scheduled to be in court June 16 for an arraignment on the criminal complaint.
“We will be responding, and Mr. Knoll and I will be in court on the 16th," he said.
The bank fraud charge is punishable by a fine of up to $1 million and/or up to 30 years in prison. The charge of false, fictitious and fraudulent claims is punishable by up to five years in prison and a fine.
The affidavit says Knoll told his accountant, creditors and employees that he sold “private label" racing fuel and that he had patented formulas of fuel produced by Valero Energy Corp. and sold to Shell Oil and Chevron. Knoll’s accountant, Barbara Ewing, told Corcoran that Knoll provided her invoices “purportedly from Valero … that show the purchase of millions of gallons of racing fuel," according to the affidavit. Under Knoll’s direction, Ewing said she then used those invoices to prepare the IRS forms that were submitted to obtain the excise tax refunds, the affidavit states.
However, Corcoran says in the affidavit that he obtained records from Valero that show Knoll’s company “purchased relatively small quantities of racing fuel" from the company and that the purchases stopped in November 2005. Corcoran also said officials from Shell Oil and Chevron said they “did not have any business transactions with Knoll or any of his business entities."
The affidavit also says that between September 2004 and October 2007, Knoll used the forms submitted to the IRS and other financial statements to obtain loans from Chemical Bank. The last loan was for $15 million and has since gone into default.
Mark Montross, a former community bank president at Chemical Bank, told Corcoran that the bank made loans to Knoll’s company “based upon Knoll’s representation that he sold millions of gallons of racing fuel and the resulting federal excise tax refunds." Mlive.com