Acting on a sealed motion from prosecutors, a Pittsburgh federal judge last week delayed for the eighth time sentencing Wyoming power plant promoter Michael J. Ruffatto, who pleaded guilty to criminal fraud in October 2016.
U.S. District Judge Joy Flowers Conti set the new sentencing hearing for June 20. Ruffatto, 72, owner of Colorado-based North American Power Group, faces up to five years in prison for stealing $5.7 million from federal stimulus research grants to study carbon sequestration and provide jobs in Wyoming’s Powder River Basin.
Before the Department of Energy awarded him stimulus grants in 2009 and 2010, Ruffatto was mainly known in Wyoming as the tireless promoter of the controversial proposal to build the Two Elk Power Plant south of Gillette.
Ruffatto convinced two successive Wyoming governors, Republican Jim Geringer and Democrat Dave Freudenthal, to allocate him a total of more than $445 million from the state’s allotment of tax-exempt industrial development bonds for the Two Elk project. State officials spent $11,066,396 to build infrastructure to support the Two Elk plant.
In 2006, Ruffatto hired Brad Enzi, son of Wyoming U.S. Sen. Mike Enzi, to represent North American Power Group in dealing with state officials.
However, the Two Elk plant was never built and local residents took to calling it “No Elk.”
The younger Enzi, who was paid nearly $130,000 in salary and benefits from the stimulus funds but who has not been named in the government case, stayed with the company as vice president until Ruffatto pleaded guilty to criminal fraud in 2016. In interviews, he said that he and his senator father maintained a “Chinese-wall relationship” when it came to business and that his father had never met Ruffatto.
No explanation for the latest sentencing delay was offered by federal prosecutors, who asked that Judge Conti seal their motion because it contained “sensitive” information.
In the past, both prosecutors and Ruffatto’s defense attorneys have argued that the lawyer-businessman needed more time to collect the estimated $8 million to $10 million in civil penalties he faces under the federal false claims act. Ruffatto previously paid the government $3 million.
Ruffatto’s assets include a half interest in two small California biomass power plants, Rio Bravo Fresno and Rio Bravo Rocklin, and a ten-acre estate in Cherry Hills Village, Colorado, that he has listed for sale at $11.5 million.
The two California power plants have value because they include five-year power purchase agreements with major utilities. This means that the plants are guaranteed significant income for several years. At least two companies, including ReEnergy Holdings, an established biomass power company in Latham, NY, have shown interest in buying the power plants.
However, sources familiar with the possible sale of North American Power Group’s interest in the power plants say that Ruffatto has not demonstrated any great urgency.
“We’ve seen little indication that his sales process has made any significant progress in the past year,” said one person who has followed the negotiations closely.
Meanwhile, the sprawling horse property that Ruffatto owns in the wealthy suburb south of Denver has been on the market for nearly three years with no sign of a buyer, although Ruffatto dropped the price from $14 million to $11.5 million. Even with 10 acres, six bedrooms, 10 bathrooms, pond, swimming pool and a heated stable, the price may be too high for the neighborhood. The Arapahoe County tax assessor lists the property’s total value in 2017 at $8,403,000, most of which, $5,669,235, is for the land.
From the federal government’s perspective, the home sale’s potential earnings depends on how much Ruffatto still owes on the property. County records show that he refinanced the place five times since 2007. The most recent refinancing — with Wells Fargo Bank in 2012 — was for $4,462,000. If that is the extent of his debt, Ruffatto could make money on a sale, even at the assessed value of $8.4 million.
Prosecutors said that Ruffatto used at least some of the stimulus money to meet mortgage payments on the Colorado home.
“Millions of dollars of the government’s award monies were never used on the [stimulus] project,” Assistant US Attorney Mary Houghton told the court at Ruffatto’s October 2016 plea hearing.
Instead, Houghton said, the monies were “spent and dissipated by the defendant on extravagant personal expenses, totally unrelated to the project, including payments for the defendant’s personal residence in Englewood, Colorado, payments for the defendant’s Mercedes Benz, payments for personal purchases at Neiman Marcus, payments for carpeting worth thousands of dollars, payments for expensive jewelry, and payments for the defendant’s international travel.”
Still unclear is whether Ruffatto also used the stolen stimulus grant money to make political contributions, including a $12,000 gift in December 2010 to a political PAC for Wyoming governor-elect Matt Mead.
According to Danielle Enzi, former wife of Brad Enzi, Ruffatto also hosted a fundraiser for Mead at the Colorado home in the fall of 2010, before Mead’s first-term election.
In an interview with WyoFile, Mead said he did not recall meeting Ruffatto. “I must have been introduced to him as the host, but there were a lot of people there,” Mead said.