09 August 2012 22:31 [Source: ICIS news]
HOUSTON (ICIS)--The chief executive of Absolute Fuels has been indicted, accused of creating millions of phony biofuel credits.
Jeffrey Gunselman's lawyer did not immediately respond to a request for comment on Thursday.
The so-called Renewable Identification Numbers (RINs) serve as credits for the production and blending of biofuels, and companies use them to comply with the nation's Renewable Fuel Standard (RFS).
Under US regulations, RINs are created when a company produces a certain quantity of biofuel.
From September 2010 to October 2011, the US alleged that Gunselman and his companies created 48.3m RINs without producing the corresponding amount of biofuel.
In fact, the US alleged that Gunselman did not even have a plant producing biodiesel.
"Instead, his business operation consisted solely of falsely generating RINs and marketing them to brokers and oil companies," the US alleged.
In all, Gunselman allegedly produced 56 invoices for 51 RIN sales, billing his customers $42.9m (€34.7m), the US alleged.
Gunselman and his companies then used about $12m of that money to buy automobiles, houses, credit at a casino, an airplane and a tank, the US alleged.
The US said Gunselman and his companies spent $775,000 for a fuel plant – although the indictment alleged that Gunselman did not have a plant producing biodiesel. Gunselman and his companies also allegedly bought business property and a milling plant.
Under the indictment, Gunselman faces 51 counts of wire fraud, 24 counts of money laundering and 4 counts of making false statements under the Clean Air Act.
The indictment also named Gunselman's companies Absolute Fuels, Absolute Milling, Ellipse Energy, 21 Investments and Ygog Holdings.
The indictment comes as the nation's RIN programme has come under increasing scrutiny following a rash of fraud cases.
Rodney Hailey, the head of Clean Green Fuels, was convicted in June of selling $9.0m worth of RINs without producing a gallon of biodiesel.
Meanwhile, Green Diesel received a violation notice on 30 April 2012. US regulators accused Green Diesel of creating more than 60m invalid RINs without producing the requisite amount of biofuel.
No one from Green Diesel is known to have been arrested, although federal agents raided an office of a sister company, Fuel Streamers. It is not known why agents were at the office.
($1 = €0.81)
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