A federal prosecutor has recommended that Two Elk developer Michael Ruffatto spend a minimum of 3 years in prison for abusing stimulus funds. His phantom coal plant was to be built in Campbell County. (Rennett Stowe/Flickr)

Describing the crime as “calculated” and “driven by greed,” prosecutors have asked a federal judge to sentence Two Elk developer Michael J. Ruffatto to a minimum of three years in prison for falsely billing millions of dollars to a federal energy research project in Wyoming and then using the money on personal luxuries and international travel.

U.S. Attorney Soo C. Song

In a June 1 sentencing memorandum to Pittsburgh Chief U.S. District Judge Joy Flowers Conti, prosecutors argued forcefully that “the seriousness of Michael Ruffatto’s offense requires imprisonment” of 37 to 46 months and at least one additional year of probation.

“In order to perpetuate this criminal activity,” U.S. Attorney Soo C. Song wrote in the memorandum, “multiple discrete acts and decisions were required. Based on his experience as an attorney and sophisticated business executive, the defendant [Ruffatto] knew the criminal nature of his conduct. This is why white-collar crime is so serious. It is the essence of intentional crime.”

A Stanford University graduate and former Arizona state prosecutor, Ruffatto, 71, is familiar to a generation of Wyoming political figures for his 20 years of bold proposals to build a series of “Two Elk” and “Little Bear” coal-fired power plants in southern Campbell county.

Beguiled by Ruffatto’s vision of an electric power empire rising from the scoria outcrops of Wyoming’s Powder River Basin, the Campbell County commissioners and two successive governors, Republican Jim Geringer and Democrat Dave Freudenthal, gave Ruffatto $445-million from Wyoming’s allocation of tax-exempt industrial bonds. The state also pitched in with $11 million in Wyoming sales tax funds to build infrastructure for the first of the phantom plants, Two Elk I.

U.S. District Judge Joy Flowers Conti

For two decades, The Wyoming Department of Environmental Quality’s Air Quality Division and its Industrial Siting Council continued to grant air quality and construction permits for the Two Elk power plant project before finally rescinding them last year. No plant was ever built on the site that Campbell County residents soon began to call “No Elk.”

Since 2007 — including the 2009-2012 period of the federal research grant that is the focus of the criminal fraud case — Ruffatto and his North American Power Group Ltd. have been represented in Wyoming by NAPG Vice President Brad Enzi, the son of U.S. Sen. Mike Enzi.

More than $1.2 million paid in salaries

Using the federal stimulus funds that were intended to create new jobs and address critical environmental issues related to global warming, Ruffatto paid himself and Brad Enzi more than $1.2 million in salaries over the two-year period. No new jobs were created.

Brad Enzi told WyoFile that he did work on the stimulus project and also Ruffatto’s wholly owned subsidiary, North American Land and Cattle, that prosecutors said Ruffatto used as a shell company to hide his criminal activities. But the younger Enzi said that he was ignorant of how his salary was determined during this period.

Ruffatto hired Brad Enzi, son of U.S. Sen. Mike Enzi, to be vice president of Ruffatto’s North American Power Group.

Brad Enzi has not been charged in the federal case.

His father, Sen. Mike Enzi, famously described the federal stimulus program that paid his son’s salary as “bailout baloney.” However, he claims he never met Ruffatto, that he had no knowledge about the details of the tainted stimulus project, and that he didn’t know how Ruffatto’s North American Power Group obtained the stimulus funds under questionable circumstances in 2009. (See WyoFile’s Two Elk Saga)

In the June 1 sentencing memorandum, prosecutors also asked the court to require Ruffatto to pay back all of the $5,719,281.92 the government says he siphoned from the phantom Two Elk carbon sequestration project on his North American Power Group’s 880-acre site south of Gillette.  Additionally, they recommended another 1 to 3 years of supervised release following his prison term and that he pay a fine of up to $75,000.

Formal sentencing by Judge Conti on the criminal fraud charge is set for Monday, June 19, in Pittsburgh.

Ruffatto attorneys ask for a break

In his defense, Ruffatto’s attorneys on Monday asked Judge Conti for a sentence of probation rather than prison time because of Ruffatto’s  own poor health; the poor health of  his son Christopher (whom they  said suffers from cancer and for whom Ruffatto serves as a “caretaker”);  the lack of any previous conviction, and the fact that he has paid back a substantial amount of the money he admitted taking illegally. So far, the government reported in a  memorandum, he has paid restitution of $3.7 million but still owes  $2,019,281.92. Another partial payment pledged to the court by Ruffatto attorneys in May never materialized.

“When Mr. Ruffatto stands before the court for sentencing,” Denver defense attorney Chad D. Williams wrote, “he will find himself where he never imagined he would be. He acknowledges, however, that his own actions have led to this moment and accepts that the court must pass judgement on him.”

Ruffatto’s lawyers also included 10 letters from relatives, physicians and friends — including an emotional hand-written appeal from his wife Eve Kornyei Ruffatto — testifying to his kindness and generosity.

“My husband likes to make people happy,” Eve Ruffatto wrote in her 13-page letter to the court that detailed, among other things, several international trips they took together. “He enjoys making the kids, grand kids laugh. He does puppet shows, makes up songs, reads to the little ones. He does not spend time or money on himself.”

One letter was listed as “Confidential Exhibit Sent to Chambers” to be reviewed by Judge Conti. Conspicuously absent, however,  were  any public character endorsements from any of his many business associates or employees, including his longtime North American Power Group Vice President Brad Enzi.

The conservation group Oceana posted this picture of Michael Ruffatto and wife Eve, receiving the Ocean Champions award from actor Ted Danson, in a gallery of the star-studded Sea Change gala in Laguna Beach, California. Ten days after the award on July 30, 2016, federal prosecutors in Pittsburgh charged Ruffatto with criminal fraud. (Oceana)

Perhaps the most revealing item in the formal appeal for leniency was an attempt by Ruffatto’s attorneys to explain why he fraudulently billed the government for millions of dollars that were supposed to be used for scientific research  on carbon sequestration.

Emboldened by the Department of Energy’s decision to grant him $10-million for the research study, they said, “Mr. Ruffatto felt empowered and under pressure by this expanded funding. Yet, the revenue generated by NAPG’s [North American Power Group’s] other business elements were approaching company lows. And he was fearful for the future of coal-fired power generation. This confluence of facts led to Mr. Ruffatto’s indefensible decision to submit false claims for reimbursement.”

The attorneys said Ruffatto “rationalized” his actions because there was “no purpose for a carbon sequestration study at Two Elk without carbon dioxide first being generated by a power plant.”  

Finally, the attorneys argued that if Ruffatto were sent to prison it would inhibit his ability to pay the government  the money he still owes in restitution.

“A sentence of probation for Mr. Ruffatto would provide the best opportunity from him to make the government whole,” the sentencing memorandum says.

His crime was not easy…

U.S. Attorney Song said the seriousness of the white-collar crime and the methodical, calculated way that Ruffatto acted in the case left little room for any additional leniency.

“This crime was not easy or opportunistic,” Song wrote. “It required planning, hard work and organization.” Song said the fraud involved hundreds of false invoices for work that was never done on the project that was intended to study the feasibility of underground, sub-strata storage of CO2 at the Two Elk site.

“Contrary to the false and fraudulent claims,” the federal prosecutor said in her detailed memorandum, “millions of dollars of award monies were not used on the project, but were secretly transferred by Michael Ruffatto into his personal bank account and used for expenses not covered under his [stimulus project] agreement with the Department of Energy, including the defendant’s personal expenses.”

The expenses detailed by Song included “payments for the defendant’s residence in Englewood, Colorado, payments for defendant’s Mercedes Benz, payments for personal purchases at Neiman Marcus, payments for carpeting worth thousands of dollars, payments for expensive jewelry and payments for the defendant’s international travel.”

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In addition to the criminal charges, federal prosecutors have said they also plan to pursue civil damages against Ruffatto under the U.S. False Claims Act, which carries penalties of up to three times the amount of the fraud, or $17 million.

No civil action has yet been filed. But in a scramble to raise money Ruffatto is attempting to sell two small California power plants still under his control and has placed his Colorado estate up for sale at a reduced price of $11.5 million.

Prosecutor’s sentencing recommendation


Ruffatto’s sentencing memorandum


Ruffatto’s wife’s letter to the judge


Ruffato’s doctor’s letter to the judge



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. A black kid stealing a candy from a corner store can get 10 years or worst. This guy steals millions and they are proposing 3 years. What a deal!

  2. He wont go to prison hes one of the good old boys who did the smart thing and hired Enzi.

  3. Good story, Rone. I can’t help but wonder what sort of sentencing a young man, especially a young man of color, might face after pleading guilty to taking $200 from a convenience store …

  4. Dear Rone:

    Great piece. And you gotta love Wyoming, with its clear line from the cattle barons and Johnson County, Tom Horn, Teapot Dome, Cheyenne shell companies, and now “No Elk,” and all left-handed points in between.