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January 24, 2014
New Biodiesel RIN Fraud Case

On January 16, 2014, the U.S. Department of Justice (DOJ) announced that it has indicted two individuals in biodiesel fraud schemes worth more than $37 million. A copy of DOJ's press release is available online. James Jariv and Nathan Stoliar have been charged with 57 counts of conspiracy, wire fraud, false statements made under the Clean Air Act, obstruction of justice, and conspiracy to engage in money laundering. In one scheme, the two allegedly generated more than $7 million in fraudulent renewable fuel credits under the federal Renewable Fuel Standard (RFS), which were then sold to obligated parties that needed them to meet their annual renewable volume obligations (RVO) under the RFS. In another, they allegedly failed to provide the U.S. government with $30 million in renewable fuel credits.


This case is significant because it is the fifth major biodiesel Renewable Identification Numbers (RIN) fraud case since 2011. It comes at a time when (1) EPA is working to prepare in final its proposed RFS Quality Assurance Plan to avoid cases of RIN fraud; (2) the biodiesel industry is advocating for increased biodiesel RVOs over what EPA has proposed for 2014 and 2015; and (3) the biofuels industry is fighting to sustain confidence in the RIN market and the statutory RFS RVOs in all renewable fuel categories. It could provide RFS opponents, including many in the refining sector, an additional argument in their quest to repeal the RFS.
 


 
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