Biofuel Fraud: It Pays

by Nash Keune

Rodney Hailey claimed he could produce 20 million gallons of biodiesel out of a rented garage. The “tiny, ramshackle building” housed “a few plastic rubes,” polyethylene tanks and pumps, but none of it was hooked up to anything, the New York Times reports.

But it wasn’t until after Hailey sold $9 million of biofuel credits under the 2007 Fuel Standard Program, enough to finance a “spasm of outlandish spending on diamond jewelry and charter jets to Hawaii and Florida” and amass “a fleet of luxury cars, including a Rolls-Royce, three Ferraris, two Bentleys, a Lamborghini, a Maserati and more than a dozen others” that the EPA was able to convict him of 42 counts relating to his years-old fraud.

This particular story has its “almost comic elements,” but it could be the first in a slew of less funny biofuel-fraud cases, possibly including a pair of Texas companies that have been accused of selling 140 million faulty credits, which would amount to 10 percent of the whole program.