Investigative work by federal, state, and local agencies led to the conviction of Rodney Hailey, a man who ran a fraudulent bio-diesel company in order to collect renewable energy credits from the government.

When a Baltimore detective first heard that there were a large number of luxury cars parked outside of a single residence in Maryland, he sent someone to investigate.  The tip turned out to be real.  Maryland resident Rodney Hailey had amassed a collection including a Rolls Royce, a Lamborghini, a Ferrari, a Maserati, and multiple BMWs and Mercedes Benz.

What he found out next surprised him: Hailey had made all of his money relatively recently, from the new industry of renewable bio-diesel fuels.  Hailey's company sold RINs (Renewable Identification Numbers) to companies that were required by federal law to offset some of their emissions with renewable fuel credits.

When investigators came to the address Hailey had on file for his business, however, there was no bio-diesel processing occurring anywhere on site.  Hailey was asked where the bio diesel production facility was located.  According to Hailey, the bio-diesel fuels came from many different restaurants in the area, and was driven to the fuel procesisng plant by drivers.  However, he was unable to name any of these drivers—or, indeed, the restaurants which the company supposedly was buying used cooking oil from.

Instead of finding any bio-diesel fuel manufacturing processes, investigators found mounting evidence that Hailey had used the money only to fuel an excessively lavish lifestyle, including not only a dozen sports cars but also $80,000 worth of jewelry and a home in Maryland worth $650,000, which he paid for using checks written with company funds.

According to federal prosecutors, Hailey's scheme not only cost over $40 million to large energy producers who bought the fraudulent credits, it may also have put small manufacturers of actual bio-diesel out of business.

After being convicted of 42 total offenses, including 32 counts of money laundering, eight counts of wire fraud, and two counts of Clean Air Act violations, Hailey was ordered to spend the next 12 years and six months behind federal prison bars.  He will also be ordered to pay restitution in the amount of over $40 million.  His property, including the cars, house, and jewelry, has already been forfeited to the federal government and will be auctioned off.

Source: epa.gov