HARRISBURG, Pa. (CN) – Prosecutors unveiled charges Thursday that accuse a Pennsylvania biofuel company of manipulating lab tests to claim federal credits for substandard fuel.
The 11-page indictment, filed a day earlier in the Middle District of Pennsylvania, says the scheme led the U.S. Environmental Protection Agency to award Keystone Biofuels Inc. more than $10 million worth of unearned renewable fuel credits.
In addition to the company itself, the indictment includes charges against the co-owners of Keystone Biofuels: Ben Wootten, 52, of Enola, Pennsylvania, and Race Miner, 48, of Buena Vista, Colorado.
Keystone, which did not return a request for comment, has operated production plants in Shiremanstown and Camp Hill, Pennsylvania, where the company processed animal fats and vegetable oils into renewable fuel.
Prosecutors say the scheme occurred in Cumberland County between at least 2009 and 2013.
At both of Keystone’s facilities, according to the complaint, the company regularly claimed credits for purportedly renewable biodiesel that actually failed to meet the standards established by the American Society of Testing and Materials.
Prosecutors say the co-conspirators generated more than 16 million fake-biodiesel credits over the course of the conspiracy, and made money selling these fraudulent credits.
EPA regulations allow EPA refiners and importers to buy such credits from renewable fuel producers as an alternative to physically producing renewable fuel themselves.
The indictment notes that fuel-credit prices vary, but that Keystone would have made about $10 million base on estimated price of 65 cents per credit.
Keystone supplied customers and laboratories with doctored fuel samples to give the impression that they produced compliant biodiesel, according to the complaint.
Prosecutors quoted an email that someone called Unindicted Co-Conspirator 2 sent Wootten and Miner about the sample trick.
“Unindicted Co-Conspirator 2 reported that the untreated sample ‘failed miserably’ and that he ‘prefer[ed] not to ‘doctor’ the samples to get passing results,” the complaint says.
Prosecutors also quoted an email someone they call Unindicted Co-Conspirator 1, and they say another party, Company A, “regularly and knowingly purchased off-specification fuel from the defendants.”
A snapshot of the company Keystone Biofuels on bloomberg.com notes that the company has been under reorganization since 2013. In an auction listing for the company, Heritage Global Partners says the facility is rated for 33 million gallons per year by the EPA.
The company and its owners were face one count of conspiracy and six for false statements. U.S. District Judge John Jones III is presiding over the case.