Biodiesel Company Created, Sold Fake RINs
Legislation pending to protect those who bought
Published in CSP Daily News
LUBBOCK, Texas -- The owner of biodiesel manufacturer Absolute Fuels this past week pleaded guilty to selling fraudulent biodiesel renewable identification numbers (RINs) worth $41.7 million without actually producing the fuel, according to a PMAA report.
From September 2010 to October 2011, Jeffrey David Gunselman generated the fake biodiesel RINs on his computer and then sold them to several refining companies (obligated parties). The companies then wired payments to Gunselman's bank account.
This is the first guilty plea from the RINs trading fraud scheme where an EPA investigation into another fraudulent renewable fuels company is still pending.
Earlier this year, legislation was introduced to address the issue. Reps. Pete Olson (R-TX) and Marsha Blackburn (R-TN) introduced the "Stop RIN Fraud Act of 2012" (H.R. 6444), which would protect obligated parties such as refiners and importers who unknowingly buy fraudulent RINs in the open market from being subject to monetary fines and replacement costs. The new legislation would require the EPA to ensure the validity of RINs before they are traded on the market.
Additionally, the National Biodiesel Board (NBB) launched a RINs Integrity Task Force to prevent future fraudulent transactions.