12 Years in Prison for Bogus Clean Fuel Credits

Rodney Hailey, who was convicted in June 2012 of wire fraud, money laundering and Clean Air Act violations connected to his Clean Green Fuel LLC business, was sentenced on Friday to more than 12 years in prison.

Hailey registered Clean Green Fuel with the U.S. Environmental Protection Agency (EPA) under the Renewable Fuel Standard program as a biodiesel producer and, in 2010, sold more than 35 million renewable fuel credits (valued at $9 million) to oil companies. These purchases represented 23 million gallons of biodiesel that Clean Green Fuel was supposed to have produced – but never did.

Following receipt of a complaint alleging that Clean Green Fuel had been selling false renewable fuel credits, inspectors checked the company's headquarters in July 2010 to inspect the facility. At that point, ‘Hailey was not able to provide an exact location for the biodiesel fuel production facility, nor any records to support claims that Clean Green Fuel had produced biodiesel fuel.’

According to the Justice Department, Hailey used the proceeds of the scheme to buy a Rolls Royce Phantom, Lamborghini, Ferrari, Maserati and other luxury vehicles, as well as more than $80,000 in diamond jewelry.

‘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,’ said Cynthia Giles, assistant administrator for the EPA's Office of Enforcement and Compliance Assurance. ‘[The] sentence shows that there are serious consequences, including jail time, for defrauding the renewable fuels program for personal gain.’

The federal judge 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 scheme.

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