Michael J. Ruffatto’s wife said he just wanted to please people and be kind to his family. Prosecutors described Ruffatto, the 71-year-old mastermind of the ambitious and disastrous Two Elk energy park, as “methodical” and “driven by greed.”
After pleading guilty late last year to defrauding the federal government, Ruffatto faces a June 19 sentencing that could send him to prison. Prosecutors are asking Pittsburgh Chief U.S. District Judge Joy Flowers Conti for 37 to 46 months probation and a $75,000 fine, according to a sentencing memorandum filed June 1. Family members and Ruffatto’s lawyers are pleading for leniency.
In October, Ruffatto admitted as part of a deal to falsifying documents that sold a story of feasibility studies, engineering work and the study of carbon dioxide storage.
In reality, Two Elk was an empty plain of sagebrush for 20 years, as interests came and left and the idea to burn waste coal evolved into a research facility studying carbon capture. By the time Ruffatto faced charges, there was little more than a concrete pad on the landscape to account for $5.7 million in federal money.
The money was put to use, but not on research or development. It was funneled into a subsidiary company, North American Land Livestock. Court documents say Ruffatto bought a Mercedes and a home in Colorado and threw money into foreign travel, jewelry and clothes from Neiman Marcus.
Prosecutors described a nefarious character in their sentencing memorandum, a man who orchestrated a magnificent fraud for personal gain by swindling lawmakers, federal agencies and universities over the two-decade history of the proposed Two Elk.
This was not an opportunity-makes-a-thief scenario, according to the memorandum.
“Based on his experience as an attorney and sophisticated business executive, the defendant knew the criminal nature of his conduct,” the court documents state. “This is why white-collar crime is so serious. It is the essence of an intentional crime.”
In addition to a minimum one-year prison term and a fine, the prosecution seeks at least one year of supervised probation upon release.
For his part, Ruffatto isn’t disputing the crime, but his lawyers are pleading that instead of a prison sentence the courts deal out probation.
The basis for clemency is the defendant’s contrition, partial restitution of the funds and ill health. Ruffatto lived a “long, productive and positive life — outside of this case — that is completely, otherwise, devoid of criminal conduct,” his lawyers said in a sentencing memorandum.
Why did he do it? His lawyers say Ruffatto felt empowered by the money coming in, but also pressure. He had persuaded the feds to shell out millions of dollars for carbon research in a place where there was no CO2 being emitted yet, the man reasoned.
“When Mr. Ruffatto stands before the court for sentencing,” his attorney Chad Williams wrote, “He will find himself where he never imagined he would be. He acknowledges, however, that his own actions have led to this moment and accepts that the court must pass judgement on him.”
Ruffatto has paid back $3.7 million of what he took but still owes the feds more than $2 million.
Prison would delay Ruffatto’s ability to pay back the final sum, they say.
“A sentence of probation for Mr. Ruffatto would provide the best opportunity (for) him to make the government whole,” the memorandum states.
Ruffatto is also the caretaker for his son, who according to the defense, is battling cancer.
The Two Elk saga was traced in depth by a WyoFile series that showed the ambitious and failed project had left a trail of questions in Wyoming.
State regulators continued permitting the facility, though there were two lags in air quality permits due to a lack of construction. The Industrial Siting Council, which approves large projects and provides money to the local community to mitigate the impact of construction, also allowed Two Elk’s permits to continue. State regulators have argued that they performed their due diligence, which is not to investigate a company but check that it is following permitting guidelines.
The Department of Energy approved $10 million in stimulus money for Two Elk to study carbon capture, of which $7.8 million was paid out. The $5.7 million Ruffatto owed back was deemed to be used inappropriately, as described above.
Sen. Mike Enzi’s son, Brad Enzi, was long associated with Two Elk, but has not faced charges in the fraud case. In 2013, it was Enzi who greeted three state regulators on a visit to the facility to see how work was progressing. Though little was visible on the 880-acre site, permits were not pulled.
The state of Wyoming didn’t give actual dollars to Two Elk but did show its support by allowing the project its tax-exempt industrial development bonds, a federal loan contingent on progress reports. The IRS terminated the bonds’ tax-exempt status in 2011.
In contrast to the severity of the crimes leveled against him, Ruffatto’s wife, Eve Kornyei Ruffatto, wrote emotional, handwritten letters outlining the details of the pair’s second-chance life together. They met after the death of their previous spouses, she said.
Her husband wore Tommy Bahama more often than suits, Snoopy ties and flip-flops, she said. He traveled back and forth for work so that she could continue living in her home of 41 years. He was a hard worker and a generous father, and she needs him home, she argued.
“We found each other after great losses,” she said. “Mike gave me back my life. I cannot lose him. He is everything to me.”