Fake energy company jilts investors out of $2M used to buy boats, jewelry, wedding gifts; 1 of 3 indicted pleads guilty

A Greene County man admitted bilking Western Pennsylvania investors out of more than $2 million under the guise of funding a promising renewable energy company, only to use the money to pay for lavish personal items and the living expenses of he and his fellow schemers.

Authorities say the money was actually used to gamble, pay court-ordered fines and buy jewelry, boats, furniture and wedding gifts.

Robert Irey, 59, a former resident of Clarksville with ties to Pittsburgh, Robinson and Canonsburg, pleaded guilty earlier this week to conspiracy to commit mail and wire fraud in federal court in Downtown Pittsburgh, court records show.

According to Irey’s guilty plea and indictment by a grand jury, Irey and his co-conspirators cheated the local investors out of their money in the form of short-term loans and equity ownership of Ohio-based Alternative Energy Holdings LLC, and lied about plans that never materialized to build a power plant in Greenville, S.C.

Also charged in the scheme were Jonathan Freeze of Pittsburgh and Kevin Carney of Euclid, Ohio. Their cases are pending.

The jilted investors were told that the company “was going to build a plant that would convert biodegradable waste into energy” and that their “funds would be used for business expenses,” federal prosecutors said.

Instead, the bulk of the money was split evenly among the three men, who were principals and managers of the fraudulent business. At one point, they lived together.

In addition to spending the fraudulently obtained money on lavish items, they used the funds to pay rent, utility bills and restitution mandated by an unrelated prior criminal conviction for fraud, court records show.

“After victims provided funds to AEH, the defendants often split the money three ways and used it for personal use,” prosecutors said. “Despite the promise of a short-term repayment, the victims were not repaid.”

Among those who lost money from the scheme was former Washington County District Attorney Jack Levin. Levin, of North Strabane, told the Observer-Reporter that he took out a home equity line of credit to invest $50,000 in the fake venture but never got the double-digit returns he was promised.

Investigators tabulated that at least 22 victims of the scheme loaned a combined $2,017,228.

The three defendants claimed to have returned about $63,000 — but federal prosecutors said those repayments were made using money loaned by other victims.

Assistant U.S. Attorney Lee J. Karl prosecuted the case against Irey.

Irey remains free on bond until his sentencing hearing, which U.S. District Judge Robert J. Colville scheduled for March 24.