Industry News




 

02/26/2013

Owner of Clean Green Fuel Sentenced for Fraudulent Renewable Fuel Credits

 
Playing with fradulent fuel can come with serious and significant penalties.

U.S. District Judge William D. Quarles, Jr. sentenced Rodney R. Hailey, of Perry Hall, Md., today to nearly 12 years and six months in prison, followed by three years of supervised release, for selling $9 million in renewable fuel credits which he falsely claimed were produced by his company, Clean Green Fuel, LLC.

“When invalid renewable fuel credits are ‘produced’ and sold, it undermines the integrity of an important program designed by Congress to reduce the nation’s dependence on foreign oil and to grow the nation’s renewable energy industry,” says Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.

“Today’s sentence shows that there are serious consequences, including jail time, for defrauding the renewable fuels program for personal gain.”

“Any government program that is based on trust is vulnerable to a fraudster like Rodney Hailey,” says U.S. Attorney Rod J. Rosenstein. “The only thing Rodney Hailey’s ‘Clean Green Fuel’ business produced was the dirty money he used to fund his lavish lifestyle.”

Judge Quarles enhanced Hailey’s sentence upon finding that he obstructed justice by concealing, selling and spending assets that were protected by court order. Judge Quarles also ordered Hailey to pay restitution of approximately $ 42.2 million to over 20 companies and forfeit $9.1 million in proceeds from the fraud, including cars, jewelry, his home and bank accounts, already seized by the government.

Hailey, age 34, was convicted on Jun. 25, 2012, of eight counts of wire fraud, 32 counts of money laundering, and two counts of violating the Clean Air Act. He has been detained since the guilty verdict.

According to evidence presented at the six day trial, Hailey owned Clean Green Fuel, LLC, located in the Baltimore, Md. area. Hailey registered Clean Green Fuel with EPA under the Renewable Fuel Standard (RFS) program as a producer of bio-diesel fuel, a motor vehicle fuel derived from renewable resources. To encourage the production of renewable fuel and lessen the nation’s dependence on foreign oil, all oil companies that market petroleum in the U.S. are required to produce a given quantity of renewable fuel or to purchase credits, called renewable identification numbers (RINs) from producers of renewable fuels to satisfy their renewable fuel requirements.

Between March 2009 and December 2010, Hailey engaged in a massive fraud scheme, selling over 35 million RINs (representing 23 million gallons of bio-diesel fuel) to brokers and oil companies, when in fact Clean Green Fuel had produced no fuel at all and Hailey did not have a facility capable of producing bio-diesel fuel.

Federal law enforcement agents investigated the scheme after a Baltimore County police detective working with Maryland’s federal financial crimes task force received a report about the large number of luxury cars parked in front of Hailey’s house. The financial crimes task force contacted EPA’s Criminal Investigation Division and initiated a criminal investigation.

Two civil inspectors from EPA’s Air Enforcement Division visited Clean Green’s headquarters on Jul. 22, 2010, to inspect Hailey’s bio-diesel production facility, in response to a complaint alleging that Clean Green had been selling false RINs. Hailey was not able to provide an exact location for the bio-diesel fuel production facility, nor any records to support claims that Clean Green Fuel had produced bio-diesel fuel. When asked to explain his method of production, Hailey falsely stated that he paid employees and contractors to recover waste vegetable oil from 2,700 restaurants in the “Delmarva” area, a peninsula that includes parts of Delaware, Virginia and Maryland, and bring it to his production facility where he converted it to bio-diesel fuel. Hailey claimed that only the drivers who picked up the oil knew the names of the restaurants, and Hailey could not provide the names of the drivers.

Hailey made more than $9.1 million from selling the false RINs. Hailey used the proceeds of the scheme to purchase luxury vehicles, including BMWs, Mercedes Benz, a Rolls Royce Phantom, a Lamborghini, Ferrari, Maserati and others, as well as real estate and more than $80,000 in diamond jewelry. In all of these transactions, Hailey generally used cash or checks drawn on accounts he controlled to make the purchase, including a check for $645,330.15 to buy his home in Perry Hall, Md.

The loss to the traders and major energy companies who purchased Hailey’s false RINs is more than $40 million, but the loss also extends to small bio-diesel companies, many of which, as a result of Hailey’s scheme, were unable to sell their RINs and have been forced out of business.

 

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04/16/2014

The U.S. Army plans to start development of a solar array that will provide about 25% of the annual installation electricity requirement of Fort Huachuca, Arizona.

04/15/2014

The EPA's annual greenhouse gas emissions report is now available.

04/14/2014

Are you what some would call a “climate-change denier”? If so, you'll want to read this.

04/10/2014
Los Angeles has remained the top city for ENERGY STAR certified building since 2008, while Washington, D.C. continues to hold onto second place for the fifth consecutive year, according to a new list released by the EPA.
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Green construction has grown massively over a short period of time.
04/07/2014
Field demonstrations of newly proven energy-efficient technologies are yielding valuable results for the U.S. Navy, helping it meet energy goals.
04/03/2014
Building owners in Chicago now have more options when it comes to getting their building energy data verified.
04/01/2014
According to a new report from Eaton, such outages are up 15% in 2013 over 2012 and over half of those surveyed believe that downtime could have been prevented.
03/31/2014
The newly revised ANSI/ASHRAE Standard 105-2014, Standard Methods of Determining, Expressing, and Comparing Building Energy Performance and Greenhouse Gas Emissions, aims to provide a consistent method of measuring, expressing, and comparing the energy performance of buildings.
03/27/2014
Facility managers face an every expanding array of sustainability choices and challenges, but for the next generation of FMs, green practices could be second nature as sustainability literacy enters the K-12 school system.
03/25/2014
While the economic recession explains the decline in sales in 2008 and 2009, it is much less clear why sales have continued to fall.
03/24/2014
University of Washington (UW) scientists have built the thinnest known LED that can be used as a source of light energy in electronics.
03/21/2014
Mississippi Governor Phil Bryant signed Senate Bill 2378 into law, effectively enacting the state’s first building code.
03/19/2014
In an attempt to improve building energy performance, the DOE’s National Renewable Energy Laboratory has released a web-based tool called the Technology Performance Exchange, or TPEx.
03/18/2014
Could green building practices pose unanticipated life-safety hazards?
03/13/2014
Worried about workplace violence in your facility? Researchers have discovered that “mindfully observing” high-risk employees can avert danger and workplace violence.
03/11/2014
Through the DOE’s Building Energy Codes Program, every dollar the DOE has spent on building energy codes over the past two decades has resulted in $400 in energy cost savings.
03/07/2014
It is possible to harvest energy from Earth's thermal infrared emission into outer space, according to new research from the Harvard School of Engineering and Applied Sciences.
03/05/2014
Is your building prepared to handle an emergency?
03/04/2014
NASCAR revealed five newly installed charging stations for employee use.
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