Swimming with the fishes

I was never able to get into the Sopranos.

But maybe I should have paid more attention to the DiMeos and Lupertazzies.

Maybe it would have prepared me better for this week's two allegations of organized criminal involvement in the "peace, love & biofuels" biz of greentech.

Clearly, there's been no shortage of muck for everyone's favorite greentech superhero to rake of late. Let's get dirty...

Biofuel from algae: organized grime?

the Cleantech Group's story last November questioning the viability of an ambitious algae-to-biodiesel operation in South Africa called De Beers Fuels—no relation to a similarly-named diamond company—caused a stir (see Biofuel from algae startup on shaky ground.)

Why, news organizations, literally around the world, had been mouthing the company's praises. Who were WE to poke at the company, readers wrote?

At the time, our story questioned the legitimacy of its science and subcontractors. Now, a TV news program in South Africa claims it's found De Beers Fuels (also known as Infinity Biodiesel) has ties to organized crime, a cadre of jilted investors and employees jumping ship.

De Beers Fuels has claimed to be producing 6,000 liters of biodiesel an hour. The South African program quotes neighbors as not having actually seen any fuel trucks leaving. Hmmm.

What about the algae? Well, that's the problem, according to the report. There ain't any.

The company intended to work with U.S.-based GreenFuel, which, according to the report, has admonished De Beers for tardy payment for rolling out stages of algae testing, while promoting the impression they’re on track.

As the Cleantech Group reported in our article in November, GreenFuel's position is that biofuel from algae is years away, yet.

And it gets better. Particularly the parts about De Beers' connections with a carjacking syndicate and police bribery charges.

Read a transcript of the South African television report here.

Water-from-air catfight

Two companies in the water-from-air business continued their legal Chinese water torture of each other this week.

AirWater yesterday filed suit in Massachusetts against a competitor know variously as WorldWide Water, Air2Water, and Freewater Company dba as Freewater Inc.

AirWater president Michael Zwebner accuses competitor Menachem (aka Michael) Klein of patent infringement, "injurious "falsehoods - trade libel", "tortuous interference with contract and advantageous business," and "fraudulent representations."

"The named defendants have acted in an open conspiracy, and with other third parties together have engaged in an illegal attempt to put us out of business. They have used intimidation and threatening behavior against our distributors and dealers in a vicious and malicious attempt to coerce them to cease and desist doing business with us. We intend to fully expose these entities and individuals, and put a stop to the almost 'mafia type criminal elements' that have attempted to corner this new air to water technology, industry and business." Ouch!

Klein, reached by the Cleantech Group, said Zwebner has a history of filing questionable actions, and noted his lawyer has been subjected to Rule 11 sanctions. "He was sanctioned for filing frivolous lawsuits against other individuals. This is what Zwebner does all the time and loses."

Indeed, a Google search on the name Michael Zwebner (why, try it here, yourself!) turns up a history of legal derring-do, with colorful commentary by others.

"He filed another lawsuit against us in California, and he lost that one, and he's going to lose this one. He's just trying to cause a smokescreen as to why his stock is doing so bad," said Klein.

Zwebner's AirWater is a subsidiary of his company Universal Communication Systems (PINKSHEETS: UCSY).

Another individual who's been crossing legal swords with Zwebner of late is Jim Reidy, who owns the patent on Zwebner's water-from-air technology. Reidy terminated AirWater's license to use the patent back in January of 2005.

Yet Zwebner recently announced a big sale (see $2.6m sale of air-to-water machines to Africa.) Will Reidy get a slice?

"He's claiming to be making money. Whether he is or not is questionable. He's claimed to have made several sales in the past, but they've never shown up on his SEC reports," Reidy told the Cleantech Group today.

SOX fraud? No comment.

Tiny biofuels maker U.S. Sustainable Energy Corp of Natchez, Mississippi, which singlehandedly seems to put out a good percentage of the biofuel press releases we get across our desks every day, has issued a volley of vitriol against a company it's been trying to partner with the last few months.

USSE says it's terminating the nascent agreement between the two companies because of "substantial fraud and failures discovered in connection with the representations and warranties of ONYI in the agreement and other matters relative to the ongoing operations of ONYI."

It was only January when USSE was full of brotherly love for United Ethanol, which back then was going by the name Diversified Ethanol, even though it was—and still is—legally named Originally New York, Inc. (Bulletin Board: ONYI). (United Ethanol is not to be confused with the good folks at United Ethanol LLC of Beaver Dam, WI, the company you'll find at www.unitedethanol.com.)

Heck, back in January, in a Barney release (you know—the ol' "I love you, you love me" partnership announcement), John Rivera, CEO of USSE, said he was "elated" about an MOU between the two companies.

That was then. This is now.

"USSE has determined that ONYI has not complied with applicable reporting obligations of the United States Securities and Exchange Commission in connection with numerous prior transactions and that there are material misstatements and omissions in such filings. As a consequence, ONYI's reporting obligations under applicable securities laws and the Sarbanes-Oxley Act's requirements have failed and may lead ONYI to potential liability to shareholders and regulators for such violations," USSE said this week.

When contacted earlier this week by the Cleantech Group for comment, Diversified Ethanol executives said they planned to issue a statement, but had not as of this writing.

Cleantech developments making news in the past 24 hours

• Generating energy underwater from good vibrations
• Indian companies order 300MW in wind power
• Beijing meets "blue sky days" target early
• Finland, Vietnam launch fish fuel project

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