October 4, 2011 / 5:46 PM / 8 years ago

U.S. alleges $9 million biofuel scheme paid for exotic cars

WASHINGTON (Reuters) - A Maryland man has been charged by the federal government for selling $9 million in fraudulent renewable fuel credits and using the money to buy a Ferrari, a Lamborghini, and a Maserati, among other things.

The U.S. Environmental Protection Agency said on Tuesday that Rodney Hailey, the owner of Clean Green Fuel, LLC, has been charged with wire fraud, money laundering, and violation of the Clean Air Act in connection to trade in renewable identification numbers, or RINs, purportedly produced by his company.

The government alleges that between March 2009 and December 2010 Haley sold over 32 million RINs to brokers and oil companies for at least $9 million. But the government claims that Clean Green Fuel had produced “no fuel at all.”

“According to the criminal information, Hailey did not have a facility capable of producing biodiesel fuel and his business operation consisted solely of generating false RINs on his computer and marketing them to brokers and oil companies,” the EPA said in a release.

To encourage renewable fuel output, the government requires oil companies that market petroleum in the United States to produce a given quantity of renewable fuel, or to purchase the RIN credits from producers of renewable fuels.

In addition to the Ferrari, Lamborghini and Maserati, Hailey allegedly used the proceeds of the wire fraud scheme to buy BMWs, Mercedes Benz’s, a Rolls Royce Phantom, and others, as well as real estate and jewelry, the EPA said.

During an investigation Hailey made numerous false statements to EPA investigators, including that he manufactured the fuel from waste vegetable oil collected from 2,700 restaurants, it said.

Hailey had registered the company with the EPA as a producer of biodiesel, a fuel derived from soybean oil and other resources.

Initial attempts to contact Hailey were unsuccessful. The number for Clean Green Fuel listed on its website has been disconnected.

Reporting by Timothy Gardner; Editing by Alden Bentley and Bob Burgdorfer

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