Despite his looming court sentencing date for criminal fraud and what his lawyers claim is failing health, Michael Ruffatto continues to participate in southern California charity events such as this July 15, 2017 gala in Laguna Beach, California, for the environmental organization Ocean​a. In this picture from Daily Pilot-Los Angeles Times, Ruffatto is flanked by his wife Eve. (Photo by Ryan Miller, Capture Imaging)

It could cost him millions — twice what the government claims he stole from a federal grant to study underground carbon storage in Wyoming’s Powder River Basin — but Two Elk developer Michael J. Ruffatto is hoping a large cash settlement with the government will keep him out of prison.

On Oct. 19 U.S. District Judge Joy Flowers Conti granted Ruffatto the fifth delay in sentencing since he pleaded guilty to criminal fraud in October 2016. The sentencing date was changed to Jan. 31, 2018 to give Ruffatto more time to sell his interest in two California power plants in order to come up with the money he needs.

In their latest filing, Ruffatto’s attorneys argued that the proposed cash settlement — including $5.7 million in restitution and an expected equal amount in civil penalties — “will have a material impact upon the court’s determination of the sentence to be imposed in this case.”  In earlier filings, the attorneys argued that Ruffatto, 71, was in such poor health that he could not withstand incarceration.

Federal prosecutors again agreed to the delay, but have consistently argued that Ruffatto should also be sentenced to at least three years in federal prison for his crime. Calling his actions “calculated” and “driven by greed” the prosecutors said Ruffatto spent most of the 2009-2010 federal grant on personal luxuries including a new Mercedes, jewelry, oriental carpets and foreign travel.

Federal sentencing guidelines for the criminal charge against Ruffatto carry a recommended prison sentence. However, Judge Conti, a bankruptcy expert appointed to the bench by President George W. Bush, enjoys wide discretion in determining punishment and has the authority to order probation rather than jail time.

A lawyer and former Arizona state prosecutor, Ruffatto is well known in Wyoming as the ambitious promoter of a series of  “Two Elk” and “Little Bear” power plants in southern Campbell County, none of which were ever built.

“Based on his experience as an attorney and sophisticated business executive,” Pittsburgh U.S. Attorney Soo C. Song wrote in a June 1 sentencing memorandum, “the defendant [Ruffatto] knew the criminal nature of his conduct. That is why white-collar crime is so serious. It is the essence of intentional crime.”

The court case is being tried in Pittsburgh because that city is home to the  National Energy Technology Laboratory that issued the 2009-2010 stimulus grant to Ruffatto’s Colorado-based North American Power Group, Ltd.

In their Oct. 19 request for continuance in the case, Ruffatto attorneys placed part of the blame for the latest delay on the government.

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“The legal settlement documents are still being drafted and agreed upon,” wrote attorney Jason D. Schall. “This process inherently involves numerous agencies (including the Department of Justice in Washington, D.C.), each of whom [sic] has substantial caseloads and demands that have inadvertently delayed the formalization of a settlement in this case.”

Assistant U.S. attorney Mary Houghton has argued that a prison sentence is important in this case because it “sets an important precedent and sends a clear message: defendants of wealth (or access to it) with employment options may not fare better than those lacking wealth or employment.”

Rone Tempest

Rone Tempest was a longtime national and foreign correspondent for the Los Angeles Times. In 2004 he was part of a team of reporters to win the Pulitzer Prize for coverage of the massive wildfires in Southern...

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  1. I saw an earlier item that indicated he was trying to sell his Cherry Creek, Colo. home for something like $14,000,000 to get funds to pay his restitution and/or fine. I believe he most of the time, lives in Newport Beach, Ca.