BioFuels in the News - Uncovering Fraud

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biofuels fraudContinuing our series of posts around biofuels, I wanted to report on some ethical and corruption issues that have surfaced recently that impact the industry and the tax payers.  Several media sources are reporting a biofuels-based tax and securities fraud. E-Biofuels, an Indiana-based biofuels company, is reported to have bilked investors and taxpayers out of more than $100 million by taking what Assistant U. S. Attorney Steve DeBrota calls “another bite of the apple,” in the report by USA Today.

Indiana public media quotes US Attorney Joe Hogestt as saying, “They were simply buying fuel from other sources, using the processing plant as a front and then scamming the consumers.” reports that charging documents released today cite 88 counts against seven people and three corporations. The charges include “allegations of  conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering and securities fraud.”

Basically, E-fuels wasn’t producing any sort of biofuel. Instead, they were purchasing fuel from other producers who had legitimately received tax credits, then selling it as their own. They also received tax incentives of about $35 million for the production of high-quality biofuels. Consumers who purchased fuel from E-Biofuels during the period from July 2009 and May 2012, paid a premium of more than $55 million, according to The fuel that was sold in Midwestern states, was not harmful to vehicles, but the case has raised questions about the potential impact on biofuel investments.

Ultimately, the 35 million gallons of falsely labeled biofuels is just part of the more than 1 billion gallons of fuel produced in each of the past two years according to Ben Evans, spokesman for the National Biodiesel Board as reported in USA Today. “Unfortunately, no industry is safe from criminals who will try to game the system, whether it’s an Enron or a small business.”

I will continue to share news and events from the world of biofuels, both good and bad, as we continue to explore this emerging field of biotechnology and power.


Read the USA Today article 

Read the story in Indiana public media

Read the story at

Read more science news at Synthesis

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