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Polk County Couple Get Prison In Biodiesel Scheme

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By ELAINE SILVESTRINI

The Tampa Tribune

Published: August 23, 2008

Updated: 08/23/2008 12:15 am

TAMPA - The idea seemed like a win-win for everyone.

Everyone was going to get rich and help the environment and national security in the process.

That was the plan peddled in the 1990s by Karl Rehberg to thousands of investors in several states. He had discovered a revolutionary process to turn restaurant grease into biodiesel fuel.

He and his wife, Helen, coaxed nearly $21 million out of 2,800 investors. They built a plant in Lakeland, employing more than 20 people in their business, Nopec.

The only problem was that it was all a scam.

As federal investigators closed in, Karl and Helen Rehberg took off, becoming two of Polk County's most notorious fugitives.

After nine years of living on the lam, they were captured last year in Arizona, living under assumed names.

Friday, they were sentenced to federal prison: he to five years and she to two. Both were ordered to pay nearly $21 million in restitution and to serve three years of probation upon release.

Karl Rehberg's attorney, Adam Allen, a federal public defender, argued that the biodiesel fuel business was legitimate.

The only fraud, he said, involved misleading information given to investors, such as exaggerations about how far along the technology was.

"The fraud in this case was the method at which money was raised," Allen said.

However, Assistant U.S. Attorney Cherie Krigsman said the whole operation was an elaborate rip-off.

"Nopec itself was a scam," she said. Converting waste cooking oil into fuel "was never achieved at Nopec."

Yet Karl Rehberg "learned to talk enough scientific gobbledygook that he was able to pull the wool over sophisticated investors' eyes. ...He kept saying, 'One more year; one more year. We're almost there. We're almost there,' when the science wasn't there in the first place."

Allen said the Rehbergs put millions of dollars into the Nopec plant and into employees' salaries.

Krigsman said that's true. Investigators were able to track about $12 million of what was raised as having gone into the business. The Rehbergs used several hundred thousand dollars. The rest, she said, has vanished. It was impossible for investigators to make a thorough accounting of the finances "because the records were so shoddy."

One of the Rehbergs' victims, Mark Nordby, addressed the court, saying his life was devastated by what the couple did. Nordby said he worked as a business development consultant at Nopec, and helped set up the initiative. He said he helped lead the governor's office and the state Department of Education to believe in the company.

When he realized something was wrong and began cooperating with the FBI, he said, Karl Rehberg threatened his life. He was thrown out of the Lakeland North Rotary, he said, because he was fighting a popular man in town.

"I have lost clients and careers," he said.

Rehberg apologized for his "lack of diligence" in the business. He said he hopes his wife will forgive him "for this mess and the indignities you've had to suffer."

U.S. District Judge Elizabeth Kovachevich said Rehberg's apology lacked sincerity. She decried the fact that Rehberg has not helped authorities find the money.

"The unwillingness of the defendant to assist the government in making whole or attempting some kind of reimbursement to the victims is ludicrous," she said, adding it was legitimate to conclude Rehberg has "secreted the funds."

She said she would like to impose a longer sentence, but would go along with the plea agreement, which set a five-year term for the 65-year-old defendant.

When the couple fled, Karl Rehberg was in the midst of negotiating a deal with federal prosecutors that would have spared his wife from criminal charges.

Helen Rehberg, 67, wound up pleading guilty to obstruction of justice.

Her niece, Ann Belton, told the judge her aunt is "a very special person to me." Helen Rehberg, she said, was "homecoming queen, miss goody-goody two shoes."

Her first marriage "ended in disaster," Belton said, when her high school sweetheart left her for a younger woman. Then she met Karl Rehberg, whom her family despised.

"The whole family was always against Karl," Belton said. "We tried to let her know there was something not right about this business."

Belton said she thinks her aunt fled partly because of her family's issues with Karl Rehberg. "She stuck by her man. He just knew how to manipulate her. I think she was a victim by him."

Reporter Elaine Silvestrini can be reached at (813) 259-7837 or esilvestrini@tampatrib.com.

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