“I’m retired now but I spent thirty years with the Environmental Protection Agency,” Schultz said. “I was in the enforcement division and primarily worked in the West, my last office being in Salt Lake. I stayed there when I retired three years ago.”
“Are you a biologist by training?”
“Yes, I am. Have degrees from UNLV and the University of San Francisco.”
“And you were asked to analyze the material found under the fingernails of the victim in this case, is that correct?”
“Yes, it is.”
“And what did you identify the material as?”
“I agreed with the findings of the medical examiner that is was a mixture of materials. There was chicken fat and vegetable oil. A small percentage of sugarcane. It was what we called feedstock. Restaurant grease is basically what it is.”
“When you say ‘we,’ Mr. Schultz, whom do you mean?”
“My colleagues in EPA enforcement.”
“And you dealt with feedstock — restaurant grease — in EPA enforcement?”
“Yes. I was assigned to enforcement of regulations regarding the EPA’s biofuel program. That program is about renewable fuel — recycling feedstock into biodiesel fuel. It is a program designed to reduce our national dependence on oil from the Middle East.”
“And so, why was there a need for enforcement?”
Berg stood and objected, spreading her hands and expressing her puzzlement at what this line of questioning had to do with the case at hand.
“Your Honor,” Maggie responded. “I’m asking for the court’s indulgence. It will become critically clear very soon what this has to do with the killing of Sam Scales.”
“Proceed, Ms. McPherson, but get there soon,” Warfield said. “The witness may answer the question.”
Maggie repeated the question. I had positioned myself so I could watch most of the jurors. So far no one appeared bored, but we were moving into a stage where the leaps between the steps of the defense case were getting wider. We needed their full attention and patience.
“Enforcement was needed because where there is money, there is always going to be fraud,” Schultz said.
“Are you talking about government money?” Maggie asked.
“Yes. Government subsidies.”
“How did that work? The fraud, I mean.”
“It’s a costly process. Waste fuel, feedstock, whatever you want to call it, has to be collected before it even gets to the refinery. You don’t pump it out of the ground like crude oil. It is collected through recycling centers, trucked to the refinery, then processed, sold, and shipped back out. To encourage the conversion of refineries to biofuel, the government started a subsidy program. Basically, the government pays the manufacturer two dollars a barrel for manufacturing biofuel.”
“What would that mean in terms of, say, a tanker truck full of renewable fuel?”
“A tanker truck carries about two hundred barrels. So that would be four hundred dollars paid to the refinery every time the truck leaves with its payload.”
“And that’s where the fraud is?”
“Yes. My last big case was in Ely, Nevada. A refinery up there. They were running a scheme, running the same oil in and out of the plant. They had a fleet of tankers that were going in and out with the same cargo. They would change the labeling only. In basic terms, it would say ‘feedstock’ coming in and ‘biodiesel’ going out. But it was the same stuff, and they were collecting four hundred dollars a pop. They were running twenty-five trucks and were taking a hundred thousand dollars a week off the government.”
“How long did that go on?”
“About two years before we got onto them. The U.S. government lost about nine million on the deal.”
“Were there arrests and a prosecution?”
“The FBI came into it and shut it down. There were arrests and people went to prison, but they never caught the main guy.”
“And who was that?”
“Unknown. The FBI told me it was run by the mob out of Vegas. They used somebody as a front to buy into the refinery and then the fraud started.”
“Did this scam have a name?”
“The scammers called it ‘bleeding the beast.’ ”
“Do you know why it was called that?”
“They said that the U.S. government was the beast. And it was so big and had so much money that it would never notice what was being bled off in the scam.”
Berg stood again.
“Objection, Your Honor,” she said. “This is an interesting story, but how does it tie into Sam Scales being found shot to death in the defendant’s garage and then found in the trunk of the defendant’s car?”
I had to admire Berg for mentioning the two key elements of her case in her objection, reminding the jurors to keep their eyes on the prize.
“That is the question, Ms. McPherson,” Warfield said. “I have to admit I am growing a bit weary, waiting for things to connect here.”
“Your Honor, just a few more questions and we will be there,” Maggie said.
“Very well,” Warfield said. “Proceed.”
I heard the soft bump of the courtroom door closing and turned to check the gallery. Agent Ruth was gone. I guessed that she knew what at least one of the two last questions to Schultz was going to be.
“Mr. Schultz, you called this the last big case you were involved in,” Maggie said. “When was it?”
“Well,” Schultz said, after pausing to remember the details, “as far as we know, the fraud started in 2015, and we caught on and closed it down two years later. The prosecutions of some of the lower-level players came after I retired.”
“Okay, and you said that when the fraud was discovered, you notified the FBI. Correct?”
“Yes, the FBI took it over.”
“Do you remember the names of the case agents who handled the investigation?”
“There were a lot of agents but the two they put in charge of it were from here in L.A. Their names were Rick Aiello and Dawn Ruth.”
“And did they tell you the case you were involved in was unique?”
“No, they said it was happening at refineries all over the country.”
“Thank you, Mr. Schultz. I have no further questions.”
49
The testimony from Art Schultz was key to our case, but more than anything, it was his last few answers that really put us in play. The mention of the FBI agents by name gave us some leverage and we intended to use it. With Opparizio dead, it might be my only way to an NG.
While I watched Dana Berg complete a perfunctory cross-examination of the retired EPA biologist, Maggie McFierce went out into the hallway with her laptop to compose a court order that we would submit to the judge for consideration. She was back by the time Berg was finished with Schultz. I stood and said the defense needed to address the judge outside the presence of the jury and the media. Judge Warfield considered the request, then reluctantly sent the jurors off to an early lunch and invited the lawyers to her chambers.
As usual, because of my custody status, Deputy Chan came into chambers with us and positioned himself by the door.
“Judge,” I said while we were still choosing seats and sitting down. “Can I ask that Deputy Chan be posted outside the door? Nothing personal with him, but what we are going to discuss here is pretty sensitive.”
The judge stared at me for a long moment. I knew she didn’t have to be reminded of the investigation that was instigated by this court into illegal eavesdropping and intel-gathering activities by Chan’s department. But before she could speak, Berg objected to my request.
“It’s a safety issue, Your Honor,” she said. “Mr. Haller might be in his finest suit but he is still in custody and charged with murder. I don’t think there should be any time that he is not under the supervision and control of the Sheriff’s Department. I personally am not comfortable with the deputy outside the room.”