Trudeau Gets 22-Month Federal Prison Sentence

By Andrew Gorosko

Newtown businessman William A. Trudeau, Jr, 40, was sentenced this week in US District Court in Hartford to a 22-month federal prison term, plus restitution and fines, following his guilty pleas to federal tax and financial fraud offenses.

Judge Robert N. Chatigny handed down the sentence on July 15. Besides the prison sentence, Judge Chatigny ordered Trudeau to pay $458,312 in restitution to the victims of his financial frauds, plus a $25,000 criminal fine. Following his prison term, Trudeau will remain under three years of supervised release.

The federal government and financial institutions are to receive those restitution payments within 30 days. Trudeau’s prison sentence will begin in August.

Trudeau, of Westport, has been at the center of controversy surrounding the Newtown Oil Company’s failure last winter to deliver home heating fuel to customers, who had pre-paid fuel contracts with the firm. State officials believe Trudeau surreptitiously operated Newtown Oil.

Trudeau’s sentencing this week is separate from that home heating fuel controversy. The restitution that Judge Chatigny ordered Trudeau to pay will not go to people who suffered financial losses in the Newtown Oil case.

On February 22, 2001, Trudeau entered guilty pleas to one count of unlawfully failing to account for and to pay employee Social Security and Medicare taxes, and also to one count of wire fraud. Trudeau’s sentencing on those charges had repeatedly been postponed.

In making those two guilty pleas, Trudeau admitted that he had failed to account for and to pay  $232,030 to the Internal Revenue Service (IRS) in taxes for employees working at businesses that he had operated from 1993 to 1997.

Trudeau also admitted that he had engaged in ten fraudulent loan and lease transactions during 1999, in connection with the purchase of real estate, automobiles, and computer equipment.

Assistant US Attorney Jeffrey A. Meyer prosecuted the case against Trudeau. The IRS Criminal Investigation Unit and the Federal Bureau of Investigation conducted the investigation.

Newtown Oil has been the focus of a state investigation into the firm’s failure last winter to honor prepaid home heating fuel delivery contracts with approximately 1,400 customers, resulting in hundreds of thousands of dollars of customer losses. Newtown Oil failed to deliver approximately one million gallons of home heating fuel that it was committed to deliver under the terms of the prepaid delivery contracts.

State Attorney General Richard Blumenthal has sued Newtown Oil in seeking to recover that lost money for customers. Besides Newtown Oil, named as defendants in that lawsuit are Andrew Hunihan, the president of the firm; Heather Bliss, the firm’s corporate secretary; and Trudeau, a consultant to the firm, who regularly participated in its operations. The firm, which went out of business last December, was located at 47-49 South Main Street.

In May, US Bankruptcy Court dismissed a bankruptcy filing by Newtown Oil, allowing the state to file its lawsuit against the firm. Aggrieved customers may also file individual lawsuits.

Blumenthal filed the lawsuit under the terms of the Connecticut Unfair Trade Practices Act, charging Newtown Oil with “unfair or deceptive acts and practices.” The attorney general terms Newtown Oil’s contractual practices as false, deceptive, and likely to mislead.

As early as October 2002, Newtown Oil, in order to provide fuel to its customers, resorted to buying diesel fuel, which is usable as home heating fuel, at a retail premium price from a local gas station in Newtown, according to the court papers.

Beginning in mid-November 2002, the firm failed to deliver fuel to hundreds of its prepaid customers, many of whom ran out of fuel and then had to buy fuel from other suppliers at premium prices.

Instead of advising prepaid customers that it could not fulfill contractual obligations to provide fuel, the firm continued to sell such prepaid contracts and claim it would deliver the fuel, according to the state lawsuit against Newtown Oil.

Blumenthal has said he may also pursue criminal charges against Newtown Oil.