Ex-carbon offset boss sued in New York for multimillion-dollar fraud | Carbon offsets

A former carbon offset official has been charged with fraud by U.S. federal authorities, alleging he helped manipulate data from projects in rural Africa and Asia to fraudulently obtain carbon credits worth tens of millions of dollars to obtain.

Kenneth Newcombe, former CEO of C-Quest Capital LLC and a leading figure in the compensation industry, was indicted Wednesday in New York on charges of commodities and wire fraud.

Prosecutors alleged he was part of a multi-year scheme that manipulated information about the impact of stove projects in Africa and Southeast Asia to make them appear far more successful at reducing emissions than they actually were. investment of more than $100 million in C-Quest.

From 2007 to December 2023, the 77-year-old was a board member of Verra, the world’s largest certifier of carbon offsets, and also worked at various times at the World Bank and Goldman Sachs. He faces up to 20 years in prison if convicted of the most serious charges. He denies all allegations against him.

A spokesperson for Newcombe told Bloomberg that their client was dying of cancer. “He is confident that if he lives to see a jury hear this case, that jury will dismiss these false charges and restore his good name,” the spokesperson said.

Stove projects are one of the most popular carbon offset programs, theoretically generating emissions reductions by replacing smoky fuels such as wood, paraffin or kerosene with cleaner alternatives.

By switching fuels they can deliver major benefits: improving air quality, reducing the amount of time people spend collecting wood and slowing the loss of the world’s forests. But studies have raised widespread concerns about the claimed environmental impacts, finding schemes exaggerate their impact by an average of 1,000%.

Shell and BP have both invested in C-Quest and are among a number of leading companies to have purchased carbon credits from the company.

Newcombe stepped down as CEO of C-Quest in February this year. In June, C-Quest’s new management announced that they had reported their former CEO to US authorities for his role in allegedly falsifying emissions data to generate millions of worthless carbon credits.

Following the announcement, Verra said it was suspending the 27 projects involved in the allegations and would work with C-Quest to cancel the over-issued credits as quickly as possible. The statement at the time added: “Verra and the Voluntary Carbon Market (VCM) as a whole are built on trust and integrity. We take very seriously any allegation of impropriety that undermines that trust.”

On Wednesday, US authorities said they would not file charges against C-Quest due to its open and timely disclosure of the alleged misconduct.

Prosecutors have also accused Tridip Goswami, former head of C-Quest’s carbon and sustainability accounting team, of fraud. He could not immediately be reached for comment. Former chief operating officer Jason Steele has pleaded guilty and is cooperating with the U.S. government, the announcement said.

U.S. Attorney Damian Williams said: “As alleged, Kenneth Newcombe and Tridip Goswami, among others, were involved in a multi-year scheme to fraudulently obtain carbon credits using manipulated and misleading data. They then sold those credits to unsuspecting buyers in the multi-billion dollar global market for carbon credits.”