Water to Hydrogen scam - Jail for Patrick Kelly

Kelly Sentenced for Stealing Funds Invested in Bogus Fuel Technology Venture

TRENTON ? Attorney General Stuart Rabner and Division of Criminal Justice Director
Gregory A. Paw announced that an Idaho man has been sentenced to prison for stealing
funds from victims who invested in United Fuel Cell Technologies Inc. (also Genesis
World Energy), a phony corporation that the defendant claimed had developed a
revolutionary technology to convert water to hydrogen fuel.

According to Director Paw, Superior Court Judge Thomas P. Kelly of Mercer County
sentenced Patrick Kelly, 51, of Kuna, Idaho to five years in state prison on a charge of
second-degree theft by failure to make required disposition of property received. The
defendant also was ordered to pay $400,000 in restitution. Kelly pleaded guilty to the
charge on July 31, admitting that he used more than $200,000 in funds invested in United
Fuel Cell Technologies to purchase eight cars in his own name.

An investigation by the Division of Criminal Justice determined that between November
2000 and June 2004, Kelly collected about $2.5 million in investments in United Fuel
Cell Technologies from about 500 people, mostly New Jersey residents.

It is alleged that Kelly spent investor funds on a variety of expenses, many of which
were clearly not related to the business or the development of their purported
technology. Kelly allegedly spent $80,000 for a fountain for his home and financed a
credit card for his 12-year-old daughter.

?This defendant is going to prison because he stole from investors,? said Attorney
General Rabner. ?We are committed to vigorously prosecuting these cases to protect New
Jersey residents who are trying to invest and save for their retirement or their
children?s education.?

?Mr. Kelly claimed to offer investments in a breakthrough technology. In reality, he
offered only lies,? said Director Paw. ?We have ensured that he will be appropriately
punished for his greed and deception.?

The Division of Criminal Justice obtained a state grand jury indictment on Sept. 23,
2005 charging Kelly with second-degree securities fraud in connection with his sale of
?common stock? in United Fuel Cell Technologies. The indictment alleges that he falsely
claimed that United Fuel Cell Techologies was a Delaware corporation, and that Hewlett
Packard and IBM had agreed to assist the corporation in developing and marketing its
technology and related products. In fact, United Fuel Cell Technologies was never
incorporated, and Hewlett Packard and IBM did not make any agreement with the company.
Kelly also was indicted on second-degree charges of conspiracy and theft.

The judge today dismissed charges in the case against a second man, John Yoka, 35, of
Livermore, Calif.

Hydrogen fuel cells, which are a legitimate technology, generate energy using hydrogen
or hydrogen-rich fuel, with water as a byproduct. However, Kelly, who also used the name
Genesis World Energy, fraudulently claimed to have invented a process to separate the
hydrogen and oxygen molecules in water to produce hydrogen and oxygen gases to be burned
as fuel or used in fuel cells. He claimed the technology would free the U.S. from
dependence on oil from the Middle East.

State Investigator Noelle Holl and Deputy Attorney General Patrick J. Flor were assigned
to the investigation for the Division of Criminal Justice. They were assisted by
Investigators Dean Kuehnen and Julian Leone of the New Jersey Bureau of Securities. Flor
prosecuted the case and represented the state at the sentencing.

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