$100M Biodiesel Fraud

$100M Biodiesel Fraud

Posted in the Erie Forum


Spring, TX

#1 Sep 19, 2013
$100M Biodiesel Fraud in Indiana? E-Biofuels ring nabbed by Feds
Jim Lane | September 18, 2013

In Indiana, federal officials are saying that a group of biodiesel operators associated with E-Biofuels stole nearly $100 million in a fraud scheme, and seven have been arrested in what has been described as the biggest fraud in the history on Indiana.

Here’s what we know. The allegation is that the operators of e-Biofuels purchased B99 fuel from a third-party, claimed that it originated from the eBiofuels plant, and resold it. The reason it can work as a fraud? Legitimate fuel produced at a biodiesel plant is eligible for a $1.00 per gallon tax credit, and qualifies for valuable RINs which can be sold with the gallons, or detchaed and sold in the open market.

By acquiring fuel, officials allege, the operators were handling fuel that had already qualified for a tax credit and RINs — by claiming it was produced at E-Biofuels, they were eligible for a second windfall tax credit and a second issue of RINs. Worth potentially more than $2.00 per gallon of B100 biodiesel — and with a 35 million gallon annual actual capacity at E-Biofuels — well, you can rack up quite a windfall in quite a hurry without attracting initial scrutiny.

Officials allege that proceeds from the fraud were used to purchase luxury items, among other uses.

NBB puts it in context
Ben Evans, Director of Public Affairs & Federal Communications at the National Biodiesel Board said:

““This investigation has been underway for at least two years, and we commend the EPA and other federal authorities for moving it closer to resolution. In two other known cases of similar fraud from this period, the perpetrators are now serving significant time behind bars. If these charges are true, we hope to see similar justice in this case.

“Overall, let’s remember that federal policies are working to reduce our dependence on petroleum and reduce air pollution, helping diversify our fuel supply with more than 1 billion gallons of clean, American-made biodiesel in each of the past two years. Unfortunately, no industry is safe from criminals who will try to game the system, whether it’s an Enron or a small business.

“RIN fraud, while isolated, has been incredibly damaging to the biodiesel industry and others in the fuels marketplace. We have worked diligently with the EPA and the petroleum sector to address it head-on, and we believe the new regulations that are now being finalized by the EPA, as well as increased vigilance in the industry, will prevent it moving forward. These cases should certainly send a strong signal that this kind of fraud will be punished severely

Erie, PA

#2 Sep 19, 2013
I am always surprised at how vigorously Conservative Republican Businessmen line up at the trough when Federal Dollars are thrown at something...

It looks like most of the US Ethanol policy is based on getting votes rather than on sound economics.

I would like to see a pilot project for synthetic gasoline from heavy (tar sands) oil. There has to be some improvements to the Fischer Tropish process which is now 50+ years old.

But its easier for "Pols" to buy easy votes..

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