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Attorneys seek leniency for Ruffatto in Two Elk fraud case

Attorneys for Wyoming’s Two Elk power plant promoter Michael J. Ruffatto have asked a federal court to consider his advanced age, poor health, family responsibilities and community service when weighing a possible five-year prison sentence for criminal fraud.

Meanwhile, federal prosecutors said this week that they were in “ongoing discussions” with Ruffatto and his attorneys to reach a settlement on millions of dollars in civil penalties under the U.S. False Claims Act.

Michael J. Ruffatto’s ambitious plans for energy projects expected to create jobs near Gillette first encouraged and then disappointed local residents when they were never built. Prosecutors say Ruffatto fraudulently obtained millions of dollars which he “spent and dissipated …on extravagant personal expenses” including his multi-million-dollar house. (Zillow)

Ruffatto, 70, pleaded guilty Oct. 21 in Pittsburgh federal court to one count of fraud in what prosecutors said involved $5.7 million in false charges to a federal stimulus grant. The grant was supposed to create new jobs researching the underground carbon dioxide storage potential at his Two Elk power plant site south of Gillette, Wyoming.

“Mr. Ruffatto regrets his actions and accepts responsibility for this crime and the damage he has caused,” defense attorney Jason Schall wrote in a January court filing.

Sentencing in the case, originally set for February, has been rescheduled for April 6 before Pittsburgh U.S. District Judge Joy Flowers Conti.

Prosecutors said that instead of using the $9.9 million in federal grant money to conduct research and generate employment under the Obama administration 2009 economic stimulus program, Ruffatto spent most of it on personal expenses and luxury purchases, including a Mercedes car, jewelry, carpets, a Neiman-Marcus charge account and payments on his 11,433-square-foot, six-bedroom, 10-bathroom, $13-million home in suburban Denver.

Alarmed by numerous accounting irregularities, Department of Energy officials suspended the grant in January 2012, but by then $7.3 million had already been spent.

“Millions of dollars of the government’s [stimulus] award monies were never used on the project but spent and dissipated by the defendant on extravagant personal expenses, totally unrelated to the project,” Assistant U.S. Attorney Mary McKeen Houghton told the court in October.

Brad Enzi

Ruffatto also used the stimulus funds in 2010-11 to pay himself and his North American Power Group Vice President Brad Enzi — son of Wyoming’s senior U.S. Sen. Mike Enzi — more than $1.2 million in salaries even though little or no work was done.

The younger Enzi claims he did not know how stimulus funds were used to pay his salary as North American Power Group’s chief Wyoming representative. Brad Enzi has not been charged in the case and because Ruffatto pleaded guilty did not have to testify in federal court.

Sen. Mike Enzi has said that he was unaware of details about his son’s work for Ruffatto’s Colorado-based North American Power Group and that he had never met or had any dealings with Michael Ruffatto, his son’s boss for more than eight years.

Sen. Enzi once called the federal stimulus program “bailout baloney.”

Ruffatto faces a maximum five years in prison, a $250,000 fine, and full restitution of the $5.7 million.

Read reporter Tempest’s complete Two Elk Saga here

In recent federal court filings Ruffatto’s attorneys have asked that Ruffatto not be imprisoned because of his sincere remorse, age, poor health, family commitments, and his ongoing efforts to repay the full $5.7 million the government says he used for extravagant personal expenses.

“At 70 years old,” defense attorney Schall argued in his January sentencing memo, “Mr. Ruffatto is nearing the end of his life and any period of incarceration may well be a life sentence.

“ Mr. Ruffatto’s advanced age becomes particularly pertinent when considering his numerous medical conditions, including coronary heart disease, hypertension, high cholesterol, type 2 diabetes, obesity, and hypothyroidism, all of which will undoubtedly make incarcerating Mr. Ruffatto unduly burdensome on both the Bureau of Prisons and Mr. Ruffatto.”

According to court records, Ruffatto made a $700,000 payment to the government in January, adding to the $3 million he had previously returned. However, he still owes $2,019,821.92 in restitution. In his scramble to come up with this money before April 6 sentencing, Ruffatto has put his Colorado home up for sale as well as his half interest in four aging California power plants.

Ruffatto faces additional damage payments

But prosecutors say he still faces the possibility of up to $17.1 million in additional damages under the federal False Claims Act.

“We are not finished yet,” assistant U.S. Attorney Paul Skirtich, a specialist in False Claims Act prosecutions, said after Ruffatto pleaded guilty to the criminal fraud charge in October.

More than five months later the government has yet to file any civil action in the case, already one of the largest criminal fraud actions to come out of the 2009 federal stimulus program. David J. Hickton, U.S. Attorney for the Western District of Pennsylvania, who presided over the criminal case, was the first federal prosecutor to resign after the election of Donald J. Trump in November.

But this week the Pittsburgh U.S. attorney’s office confirmed “ongoing discussion with both sides” to reach some kind of civil settlement before the April 6 sentencing hearing. In the end, Ruffatto may avoid spending time in prison but could be obligated to pay the government double or triple — $11.4 million to $17.1 million — damages to avoid a civil trial.

Even before his involvement in the federal stimulus program, Ruffatto had a long history of tapping into local, state and federal monies to support his various unrealized Two Elk power plant schemes in Campbell County.

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Beginning in 1997, he received allotments totaling $445 million in tax-exempt industrial bonds from two successive Wyoming governors, Republican Jim Geringer and Democrat Dave Freudenthal. Efforts to attract investors in those bonds ultimately were unsuccessful.

The state of Wyoming invested $11 million in sales tax revenues to build infrastructure for a Two Elk power plant east of Wright, Wyoming, that was never built.

In his federal court appeal for leniency at time of sentencing, attorney Schall characterized Ruffatto as a military veteran and “successful businessman with a long and stable work history.”

“Despite his material success,” Schall wrote of Ruffatto, “he continued to devote much of his time in his 50-year career to serving others.”

Even after the federal criminal charge was filed against him Ruffatto and his socialite second wife, Eve Kornyei Ruffatto, have remained active in several Orange County, California charity causes, including serving as patrons of the Segerstrom Center for Performing Arts and the marine environmental group, Oceana.

On July 30, 2016, Ruffatto and his wife were named “2016 Ocean Champions for their dedication to ocean conservation and generous support” at a star-studded gala in Laguna Beach. Ten days later he was charged with criminal fraud in Pittsburgh federal court.

Oceana’s photo gallery of actors and supporters included this image of Michael and Eve Ruffatto holding their Oceana award at the Sea Change gala at the Villa di Sogni in Laguna Beach, California. The award was given to the couple for their “dedication to ocean conservation and generous support” for the nonprofit environmental organization. The high-society, Hollywood, event draws actors and philanthropists who support ocean health (Oceana)

Ruffatto’s first wife Joan Ruffatto died of lupus in 2007 and his only daughter Katherine is afflicted with the disease. Ruffatto, who once gave $5 million to the University of Denver for a campus building bearing his daughter’s name, has long been an active and generous supporter of the Lupus Foundation of America.

Attorney Schall cited Ruffatto’s relationship with his daughter and her two children as another reason that the court should not imprison him.

“Mr. Ruffatto’s first wife, Joan, died from the effects of Lupus,” Schall wrote.  “His daughter, Katherine, also has the disease, limiting her ability to be the primary caregiver to Mr. Ruffatto’s two granddaughters. If sentenced to a lengthy custodial sentence, Mr. Ruffatto will be unable to provide any support [to] his daughter and granddaughters.”

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About the Author

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Rone Tempest was a longtime national and foreign correspondent for the Los Angeles Times. In 2004 he was part of a team of reporters to win the Pulitzer Prize for coverage of the massive wildfires in Southern California. From 2000-2007 he was a lecturer at the Graduate School of Journalism of the University of California, Berkeley. One of the co-founders of WyoFile, he served as its editor from 2008 to 2011. Rone lives in Lander.

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13 Responses to Attorneys seek leniency for Ruffatto in Two Elk fraud case

  1. Ken Banister March 15, 2017 at 6:32 pm #

    Lock him up!

    Torrington, Wyoming

  2. Jim Hagood March 15, 2017 at 4:38 pm #

    Just to add an update: If Ruffy gets slammer time will he get better health care in federal prison, than most folks get under TRUMP-care (pending). My Gosh, the stories on how people go into a hospital, and get bills of $50,000 to $ 100,000 per day, or other massive amounts. The great extortion of America. It is ironic on how Ruffy is using his health issues to plea for mercy from the court. Didn’t some in Watergate go into prison, and come out in better shape, and health than when working in the Nixon Administration.
    But, here is the thing, Courts take impact statements, & who from Wyo will be in Penn,(or mail into the JUDGE) who reviews matters before the federal Judge(issuing any sentence) the impacts to the people of Wyo? Really. Lucky Ruffy is not a 22 year old, who stole a few steers(cattle), he would already be in the slammer looking at long hard time, no special white collar song and dances.

    Lakewood, COLO, Colorado

  3. JIM Hagood March 15, 2017 at 9:21 am #

    IS Ruffy singing to the feds on any other stuff, while he is lounging in his Mansion in Cherry Creek, COLO?
    You sure don’t see the U S Attorney office in Wyo dealing with movers like RUFFY.
    A NPR(Navy Petroleum Reserve was stolen blind in WYO, too, and the Feds in WYO sucked their thumbs. Ruffy (via his high priced Squires) seems to be saying he is so old he will cost the Fed Prison system so much money, that he needs to lounge around in his Mansion, so his kids can come over and they can chat about the good old days. Meanwhile we, read the sad story on Viet Nam Vet Gilchrist, ( cross reference Black 14 incident in Laramie), who never made it to Ruffy’s age. Well, this story has several more chapters, thanks to W-File for keeping us informed.
    It seems to have raised the blood pressure of lots of readers just reading about how this guy gamed the system, and is now using his age as one more ploy.

    Lakewood, Colorado, Wyoming

  4. Nancy Weidel March 14, 2017 at 7:17 pm #

    “Near the end of his life” and he’s only 70? Heck, I’m almost 67 and in no way do I consider myself near the end of my life, I sure hope not! But that part of the lame brain plea is most likely true due, no doubt brought on by years of high on the hog living with the Joe Average tax payers freighting the bill. What I find more alarming, although a familiar old story, is the not insignificant role the State of Wyoming also played in the financial and let’s face it, political chicanery but that’s a way bigger tale. Suffice to say, the other laugh out loud defense reasons for letting this arrogant crook get off the hook sound just like the phony, pathetic, crocodile tears-inducing pleas Mafia defense lawyers have been using for decades. It was daily Philadelphia tv news fodder way back in the 70s with the ultimate takedown of the old Italian gangster families who controlled the Mid-Atlantic mob territories including Atlantic City. So funny to see it pop up again in the service of wealthy criminals masquerading as upstanding, generous community benefactors. Ruffato, with his legion of underhanded and crooked deals, deserves the same sentence meted out to the Mafia dons even their sharp lawyers couldn’t get reduced, life in prison, although that opportunity has regretfully passed, where Ruffato might have hoped his life would end a lot sooner. So sorry, buddy boy.

    Laramie, Wyoming

  5. Hugh Kenny March 14, 2017 at 5:14 pm #

    Ruffatto’s scam went on for eight years with absolutely NO work going on at the Two Elks site and Enzi’s son made multiple presentations to local leaders in support of the ‘project’ over those years and yet he and his dad knew nothing? Apparently you don’t have to know much to be a US Senator or a senator’s kid to make nice sandwiches from federal “bailout baloney”.

    Cheyenne, Wyoming

  6. Jim Phillips March 14, 2017 at 1:53 pm #

    So being seventy years old and sick is a consideration for getting out of jail time after stealing millions from the government for at least ten years? Damn, I am already 69 years old and have many of the same ailments as Ruffato so I better get started stealing from the government and at my age maybe I could get out of jail time too. I don’t think that is the message they should be sending.

    Newcastle, Wyoming

  7. Sue Beckwith March 14, 2017 at 1:43 pm #

    This sounds like a story meant to pull on the public’s heartstrings. If he was forty it could be a life sentence too. We never know if our health will decline. The grandkids have a father? Why can’t he support them? He needs to pay for his crimes incarceration and financially. There’s a lot of poor people in prison with “sob” stories too, but they are paying for their crimes.

    Sheridan, Wyoming

  8. Laura Richardson March 14, 2017 at 1:09 pm #

    Nadine and Anita speak for me, too! This man has grown old and fat during his career of crime, but he is not therefore entitled to judicial indulgence to flesh out the personal indulgence he has been enjoying all these years. As for the great and public largesse he bestowed on various charities and politicians– where did that money come from? Why does he get credit for generous spending in any case?

    Lander, Wyoming

  9. Clint Rhodd March 14, 2017 at 12:24 pm #

    Let the corrupt SOB rot in Prison.

    Clint Rhodd Cheyenne Wyoming

    Cheyenne, Wyoming

  10. Anita Edington March 14, 2017 at 9:46 am #

    Until these parasites start getting prison sentences there is no reason for them to stop their stealing from the public. If I’m caught, I’ll just pay back what I have to and keep the rest. If I’m not caught, I get to keep it all. I win, tails you lose.

    Gillette, Wyoming

  11. Mark E Talboom, D.C. March 14, 2017 at 9:14 am #

    Lock him up!
    Lock him up!
    Lock him up!

    Largo, Florida

  12. Ken Gerow March 14, 2017 at 9:00 am #

    I’m with Nadine on this one…

    Laramie, Wyoming

  13. Nadine Girouard March 14, 2017 at 8:02 am #

    Why do rich thieves deserve leniency? Poor thieves are put away for years and in solitary confinement. No one cares about their health or family when locking them up. Should be the same for this greedy, greedy thief.

    Rock Springs, Wyoming

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