By Kristi Pihl, January 4, 2014, Tri-City Herald
A troubled, controversial Pasco biofuels company faces eviction and the sale of its plant for failing to pay county property taxes.
Green Power CEO Michael Spitzauer remains in federal custody after he was charged last month with wire fraud, aggravated identity theft and money laundering.
Last week, Spitzauer’s lease expired with the Port of Pasco where he said he was building a plant to convert 100 tons a day of municipal solid waste into liquid and gaseous synthetic fuel.
Port Executive Director Randy Hayden said the port has started eviction proceedings for a fabrication building, a warehouse bay and the land in the Big Pasco Industrial Park.
It will be the third time the port has tried to evict Green Power. It could take three to six months for the eviction to work through Franklin County Superior Court, Hayden said.
It’s just the latest in a long series of legal troubles for Spitzauer who has been sued by investors and suppliers, convicted of lying on an immigration form and served prison time in Austria for a fraud conviction, as well as being investigated by the state for lacking air quality permits.
He’s accused of defrauding investors of at least $6.7 million in the past seven years, although his debts reportedly total more than $28.4 million including interest, according to court, county and state documents.
Of that, Spitzauer and Green Power owe at least $5.7 million to Tri-City companies and residents, as well as Benton and Franklin counties.
A former Green Power employee told the Herald last week that Spitzauer’s workers grew disillusioned as they repeatedly were not paid on time while their boss was posting on Facebook about expensive trips and purchases.
Green Power was an environment of “lies and promises,” said the former employee, who is still owed three weeks wages for his work on the unfinished Pasco plant.
‘Lies and promises’
Two years ago, Spitzauer was in the Green Power office daily, said the former employee.
But that changed, and workers would not see him for weeks at a time, said the worker who asked that his name not be used.
At times, Spitzauer told the staff of about 13 he was out of the state or out of the country, even though in court documents Spitzauer said he has not been out of the United States since 1996.
Spitzauer’s children would bring paychecks to the workers when Spitzauer claimed he wasn’t in town. He and his wife have four children ages 10 to 17.
When paychecks were late or workers were temporarily laid off, employees would see photos posted on Facebook by Spitzauer and his family about visits to Seahawks, Sounders and Tri-City Americans games, the employee said.
At the same time that Spitzauer was living his lavish lifestyle, workers were struggling to pay their rent and other bills, the employee said. One employee told co-workers that her electricity was turned off while waiting for a late paycheck.
Court documents show Spitzauer’s sons drive a Hummer and have expensive toys, including new gaming systems and more than 100 pairs of athletic shoes.
The former employee said Spitzauer bought a Mustang Cobra from one of his workers and also a body kit and rims for a Dodge Charger for one of his sons.
The Kennewick man was among 10 hired for construction-related work but he said he only built four walls in the two years he worked for Green Power. Instead, workers mostly sorted through garbage that would supposedly be converted to fuel at the plant.
Spitzauer would bring in his own personal garbage and scrap wood for workers to shred using a big wood chipper, the worker said. Spitzauer also had them sort rocks out of horse manure.
The state Department of Ecology shut down the unfinished facility in 2009 because he lacked proper air quality permits. Spitzauer continued to tell the Herald that he would get the permits, but Ecology officials said they have not received an application during the past three years.
Some employees left in 2013 after Green Power was almost evicted from the port, the former employee said. Those who returned spent about two weeks cleaning up the mess that was left from before the eviction proceedings began. Cleanup was a condition made by the port for Green Power to keep its lease.
There were about seven construction employees left when Spitzauer was indicted in December.
The former employee said he didn’t find out he was out of a job until he read in the Herald about the federal indictment.
He said he had to jump through hoops to prove that he worked for Green Power when applying for unemployment, apparently because the company hadn’t filed the required documents.
Employment Security Department officials told the Herald they cannot provide information about specific unemployment claims.
Spitzauer does not owe any money to the port, which required Green Power to pay its rent in advance plus a $300,000 deposit to restore the premises to its original condition.
Franklin County intends to auction off the Green Power plant for nonpayment of personal property taxes. The date of the sale is not set.
Green Power owes about $47,500 in property taxes from 2011-13, plus interest, according to county documents.
Spitzauer apparently turned to Green Power’s page on Facebook to post explanations that the court judgments from investments by his alleged victims were the result of companies changing their minds about getting an exclusive on Green Power’s technology and wanted their money back.
Spitzauer is charged with taking deposits from companies in Texas, British Columbia, Slovenia and Ireland, and from an Australian citizen with the intent of not complying with the terms of the agreements, documents said.
Spitzauer’s agreements with the companies between 2007 and 2009 specified that they would build plants in the former Republic of Yugoslavia, India and Canada. He also said he would sell a mobile plant to an Ireland company and told an Australian citizen that the invested money would be used to buy shares of Regal Bank stock.
Another Green Power plant proposed near Fife was never built.
Instead, investigators claim, Spitzauer used investor money to buy a $1 million Kennewick home, repay previous investors and pay for furniture, personal expenses, private school tuition and donations, sports tickets and memorabilia, legal fees and Green Power business expenses.
His Seattle attorney Christopher Black said in court documents that Spitzauer has been working toward paying off the civil judgments against him.
However, some of Spitzauer’s creditors, who claimed debts of about $21.4 million in Spitzauer’s recent failed Chapter 7 bankruptcy, only received about $44,200 before the case was closed in October without erasing his debts, documents said.
Some of the companies he is accused of defrauding were among those creditors.
There also is a bench warrant out for Spitzauer’s arrest when he did not show up to court hearings for a Benton County District Court civil case. The warrant was issued Nov. 13, about a month before Spitzauer turned himself in to federal marshals on the federal indictment.
At the same time, Spitzauer’s debts have continued to mount.
His home is three years behind in property taxes. A trust company for his children, which owns the home, owes Benton County almost $45,000.
Since the house was purchased in 2008, Benton County has begun the foreclosure process for nonpayment of property taxes three times, the maximum possible because it takes three years of delinquent payments for the process to begin, according to county records.
Each time, enough of the delinquent property taxes have been paid to prevent the home from being sold. The county will decide later this year which properties to foreclose on in 2014.
‘His life’s work’
Spitzauer, who has pleaded innocent to all federal charges, faces 10 to 12 years in prison and the possibility of deportation to his native Austria if he is convicted. Federal prosecutors also are seeking a $5 million judgment and forfeiture of his Kennewick home.
Black said his client is too invested in the Green Power project to be the flight risk that federal prosecutors have argued.
“Flight from the United States would also mean that Mr. Spitzauer would be forced to abandon (Green Power), his life’s work,” Black said in court documents. “Mr. Spitzauer built (Green Power) from the ground up and believes that his family’s future lies with the business.”
Spitzauer said in court documents that if he is released pending trial, he will step down as CEO of Green Power and give up financial control of the company. He did not indicate who would take over the business.
A hearing is scheduled Thursday in Yakima for Spitzauer and Black to ask a judge to overturn a recent decision by Magistrate Judge James P. Hutton to keep Spitzauer in federal custody without bail.