Submitted over $300,000 Worth of Fraudulent Rebate Claim Forms to a Utility Company and Paid Cash Kickbacks to the Utility Company’s Contractors
A Marion man who defrauded a Cedar Rapids utility company of more than $300,000 as part of an energy efficiency rebate fraud scheme was sentenced today to more than three years in federal prison.
Dustin James Hutcheson, age 39, from Marion, Iowa, originally from Marshalltown, Iowa, received the prison term after a Sept. 11, 2019 guilty plea to one count of mail fraud and one count of money laundering.
At the plea and sentencing hearings, evidence showed that Hutcheson operated Hutch Energy, LLC, an energy-related services business, from his residence in Marion, Iowa. In 2017 and 2018, Hutcheson and his employees approached small business customers of a Cedar Rapids utility company and offered to replace their existing lighting with more energy efficient LED lighting for free. Hutcheson falsely represented that he could do so at no cost to the customer because of a rebate program that the utility company offered and all the customer needed to provide to Hutcheson was the paperwork, which Hutcheson would complete, and the rebate check once the customer received the rebate check in the mail from the utility company. Hutcheson then submitted fraudulent invoices to the utility company, making it appear as if the customer had paid for the lighting and was entitled to a rebate. Hutcheson repeatedly forged the signatures of the utility company’s customers and also inflated the number of bulbs installed on the rebate forms. In total, Hutcheson received over $300,000 in rebate moneys as a result of his fraud scheme. In order to receive referrals for new victims, Hutcheson gave cash kickbacks to multiple individuals with whom the energy company had contracted to provide energy assessments for the customers.
Hutcheson was not a licensed electrician. At sentencing the court found that, although it was unintentional, one of Hutcheson’s light bulbs caused a fire in a nursing home. The nursing home had to evacuate 23 residents, including elderly individuals on feeding tubes and with dementia.
In July 2018, officers searched Hutcheson’s residence in Marion. Undeterred, Hutcheson continued the scheme by using two other company names to continue to submit fraudulent rebate claims to the same utility company.
Hutcheson was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Hutcheson was sentenced to 44 months’ imprisonment. He was ordered to make over $340,000 in restitution the utility company, including paying the utility company’s attorney fees in responding to the government’s investigation and prosecution of Hutcheson. Hutcheson must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
As a result of having been caught using narcotics while on pretrial release, Hutcheson is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Tim Vavricek and investigated by the Linn County Sheriff’s Office and the United States Postal Inspection Service.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-32.
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Source: U.S. Department of Justice, Office of the United States Attorneys
