"Biofuel Fraud Case Puts Industry Under Scrutiny"

EPA has charged a Maryland man with fraud in an alleged biofuels credit scheme, signalling a federal crackdown on fraud and abuse of the Renewable Fuels Standard.

"On its website, Clean Green Fuel offered customers 'a unique blend of biodiesel' made from vegetable oil that would produce less air pollution and help reduce the nation's dependence on petroleum.

But according to federal charging documents, company owner Rodney R. Hailey didn't produce any biodiesel. Instead, prosecutors charge, he generated and sold more than $9 million worth of credits for nonexistent renewable fuel, using the proceeds to buy a five-bedroom house in Perry Hall, diamond jewelry and more than two dozen cars and trucks, including a Rolls Royce, a pair of Bentleys and a Lamborghini.

Hailey, 33, of Perry Hall, is scheduled to be arraigned Thursday in U.S. District Court on charges of wire fraud, money laundering and violating the Clean Air Act. If convicted, he faces up to 20 years in prison, depending on the charge. The government also is seeking to seize his house and other property.

Biodiesel industry members said they believe this is the leading edge of a crackdown by the federal government on fraud and abuse of the Renewable Fuel Standard, a 6-year-old program meant to encourage the domestic production of ethanol and other environmentally friendly 'biofuels' made from agricultural byproducts."

Timothy B. Wheeler reports for the Baltimore Sun October 12, 2011.


Source: Baltimore Sun, 10/14/2011