Sacto 9-1-1
April 30, 2010
West Sacramento man sentenced for $684,000 theft from state

By Cathy Locke
clocke@sacbee.com

A West Sacramento man who used ill-gotten gains to purchase expensive cars and a vacation time share has been sentenced to prison for defrauding the state of California of more than $680,000 while serving as a manager with the California Power Authority.

U.S. District Judge Garland E. Burrell Jr. today sentenced Benjamin Bustamante, 32, to two and a half years in prison, followed by three years of supervised release for wire fraud in connection with a scheme to defraud the former California Power Authority Demand Reserves Partnership Program.

Bustamante was also ordered to pay $684,216.53 in restitution to the state of California, according to a U.S. Department of Justice news release.

The California Power Authority was established in 2000 in part to assure reliable power at reasonable rates and encourage energy conservation.

It established the Demand Reserves Partnership Program in which commercial and industrial customers, known as "end users", contracted to conserve energy during periods of peak energy use in exchange for payment.

"Aggregators" contracted with the Demand Reserves Partnership to coordinate the conservation contracts with end users, according to the news release.

The aggregators entered into subcontracts with end users, received payment from the Demand Reserves Partnership Program administrator for the end users and remitted payment to the end users.

According to Bustamante's plea agreement, he became the aggregator billing and settlements coordinator for the Demand Reserves Partnership in 2004.

He admitted that in 2006 he created a fictional company, Advanced Energy Response, listing himself as the sole owner. He obtained an IRS Employment Identification Number and opened a bank account for the company.

He then created a fictional state of California contract for the California Power Authority and Advanced Energy Response to serve as an aggregator with the Demand Reserves Partnership.

The news release says Bustamante admitted that he then submitted four fictional invoices, between August and December 2006, to the California Power Authority, requesting a total of $684,216.53 as payment for "energy capacity" supposedly reserved for conservation or actually conserved by end users. Bustamante, however, had not contracted with any end users to provide such capacity, and no end user had provided the capacity.

Bustamante received payment from the state for the fictional service and used approximately $173,000 to purchase two 2006 Porches, a Harley Davidson motorcycle and a Hilton Grand Vacations time share, according to the news release.

The case against Bustamante resulted from an investigation by Internal Revenue Service criminal investigation agents. Assistant U.S. Attorney S. Robert Tice-Raskin prosecuted the case.

Call The Bee's Cathy Locke, (916) 321-5287.

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