Federal judge: biofuels deal was a scam

NATCHEZ, Miss.— A federal judge agrees with regulators' charges against a man who claimed he had developed a revolutionary process to more than double fuel production from soybeans — and to do so without waste or the tiniest bit of pollution.

District Judge David Bramlette's summary judgment against John Rivera affirmed charges brought by the U.S. Securities and Exchange Commission, based on federal filings and Rivera's responses.

Bramlette has scheduled a hearing about possible penalties and restitution.

The SEC wants Bramlette to bar Rivera from ever acting as a director or officer in a company having securities registered with the SEC, or from ever participating in any "penny stock" offerings, such as the transactions involving USSEC.

Rivera burst onto the Natchez scene in 2006 claiming he held patents to a process that didn't need federal permits because it wouldn't pollute. He said he could hire up to 2,000 people in Adams County and eventually produce 1.5 million gallons of fuel per day.

In November 2006 he set up a generator to power Vidalia City Hall, saying it was running on his soybean fuel. Rivera's defense contended that power contract negotiations with Vidalia showed his processes were commercially viable. The judge disagreed.

The SEC's case, filed in 2008, alleged that Rivera used false press releases and other false public statements to drive up interest — and stock price — in his company. U.S. Sustainable Energy Corp. originally was based in Natchez but later moved to Baytown, Texas.

According to the SEC, Rivera and Alice M. Price — whom Bramlette describes as Rivera's caregiver and, since August 2010, his wife — and others planned to dump their own shares of the company after the market manipulation was complete, reaping huge profits in what turned out to be a virtually worthless company.

It said Price sold more than 35 million combined shares in USSEC and Sustainable Power Corporation, another company Rivera owned, "and allegedly used the more than $2 million proceeds to fund her lifestyle with Rivera and the activities of USSE."

"Rivera also submits a purported patent application and related correspondence to attempt to show USSE's commercial value," the judge wrote. "It is undisputed that Rivera filed patent applications which were never completed, and which lacked sufficient details to allow the patent applications to be evaluated."