AVweb

A U.S. District Judge sentenced former CEO of sustainable aviation fuel research company Alder Renewables (formerly Alder Fuels) to three years in prison yesterday (June 4). Bryan Sherbacow, 55, the founder of Alder Renewables, was convicted of embezzling close to $5.9 million from the company and defrauding investors. He was charged with transferring unauthorized company funds to his personal bank account as well as unauthorized personal spending of company assets. Sherbacow pleaded guilty in federal court to wire fraud on Feb. 8.

The FBI Washington Field Office and Defense Criminal Investigative Service (DCIS) Charleston (South Carolina) Resident Agency investigated the case, and trial attorney Kyle Crawford of the court’s Criminal Division’s Fraud Section was the prosecutor.

Sherbacow was also charged with falsifying company financial records to cover up his embezzlement and emailing altered bank statements to Alder Renewables’s accounting firm and board members, misleading investors into believing the company had more funds than it actually did. According to court records, the falsified statements defrauded three investors, including multinational conglomerate Honeywell, of $15 million.

According to a report posted on a Department of Justice website, the embezzled funds were used to purchase electronics, a vintage Mercedes-Benz and a Range Rover sport utility vehicle; make payments to an art auction operator; pay personal tax liens, credit card bills, rent on personal residences and a beach club membership; and to make a down payment on an oceanside condominium in South Carolina.

Sherbacow’s financial maneuvers took place throughout the calendar years 2021 and 2022. In December 2022, Alder Renewables issued the following statement: “As a result of enhanced management processes, the company uncovered that the now-former CEO, Bryan Sherbacow engaged in questionable financial transactions that benefited him personally. Upon discovery, the Board immediately commenced a comprehensive review of the transactions and terminated Mr. Sherbacow for cause.”

According to a report posted by Courthouse News, during his trial, Sherbacow demonstrated remorse for his crimes, saying, “I should have changed my lifestyle, but I was afraid of adding gasoline to an already unstable environment,” an apparent reference to a “family situation” that was revealed only in sealed testimony.

Apparently due to the family situation, U.S. District Judge Carl Nichols did not sentence Sherbacow to the Justice Department’s recommended sentence of 78 to 97 years but did order him to surrender the condominium and the vintage Mercedes, as well as prohibit him from making any new credit charges or opening new lines of credit. “The amount of embezzlement and the steps Sherbacow took to cover his acts were exceptionally serious and brazen,” Nichols said before passing down the sentence.

Perhaps ironically, when Sherbacow left his position with Alder Renewables after his crimes were first uncovered in December 2022, he returned his 31.6% share in company stock, which at the time, was virtually worthless. In the meantime, however, the stock has rebounded and is now worth an estimated $46 million, according to reports. Citing precedent, however, Judge Nichols rejected arguments that the increase in stock value should be considered as restitution for Sherbacow’s crimes.

The post SAF Company Founder To Serve Time For Embezzling Millions appeared first on AVweb.

Read More