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 months 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.
Well, yea.
How much of the research funds for Non leaded fuel are going this same route?
What happened to AvWeb preventing these kinds of stupid comments?
The media has done an outstanding job of dividing our nation and all in the name of profit. I’m done.
Looking forward to the mea cupla from the woke aviation press that criticized all of us who questioned the use of taxpayer funds to support using food to make fuel. All of these phony green boondoggles are rife with graft, corruption, and junk science, and will eventually fail.
Farmers seem to think 40% of the corn crop is ok to use for fuel.
Do you have a shred of corroboration, much less documentation, of such “graft, corruption, and junk science”, Kent? Which didn’t come from a source less credible than the “woke aviation press”, whateverthehell that is.
There is no “science” when 100% of grants and funding go only to support one idea. That also grantees corruption and collaboration in order to keep the money train flowing.
And, you know all about every grant awarded in the area of energy production how, exactly? Making up numbers isn’t the path to credibility.
Darn CEO hiding payments illegally. I wonder if he’ll appeal.
Sounds like the feds were on top (DCIS).
Good grief, AvWeb has become a cesspool of political grievances. The story has nothing to do with Trump nor “woke” anything.
Regardless, the editors have failed to enforce even minimum standards for comments. What a waste.
I’m glad the moderators don’t censor this blog. I’m no more interested in their slant on politics than anyone else’s. If you don’t want to see this stuff Y.A.H.O.O. Thank You AvWeb.
Right. Because after all, there are thousands of internet sites where pilots can discuss aviation issues and only a couple where political views can be exchanged. I see your point now.
Seems like “wise old man” was triggered. Hope is BP is suitable for flying.
I think the political emotions behind renewable energy products is not the products themselves. It’s the government mandating at a time certain that you can no longer choose to own or use fossil fuels based products. It is indisputable that the US and the world cannot flick a switch (pun intended) and instantly convert to renewable energy.
You want drive an EV, great! You want to fly an EV airplane, knock yourself out. Just don’t outlaw, ban or chastise those of us who choose not to. Didn’t we just learn (COVID 19) that what the government tells us isn’t always true?
Top down government dictates are always less efficient and more costly than market based solutions to our nations biggest problems.
I own an electric Smart Car, I absolutely love it, although it is range limited to about 60 miles. But I bought it because I wanted to, not because the government said I had to.
Small error there Mark. The government asked for a sentence of 78 to 97 months, not years.
Thanks. I will fix it.
When dealing with any commodity there is always a certain percentage lost to spoilage of one sort or another. The human commodity is no different, don’t read more into it than it deserves.