Washakie to Pay $3M for RIN Fraud

STREATOR, Ill. (DTN) -- The U.S. Environmental Protection Agency and the U.S. Department of Justice said in a news release Thursday, March 19, the agencies settled with Utah-based Washakie Renewable Energy, LLC, which will pay $3 million in penalties for allegedly generating fraudulent biodiesel Renewable Identification Number credits.

From January to October of 2010, Washakie generated more than 7.2 million RINs and reported to EPA that it produced biodiesel associated with those RINs at its Plymouth, Utah, facility.

"During that time, however, Washakie did not produce any biodiesel at the Plymouth facility," the agencies said.

The biodiesel associated with the 7.2 million RINs would have accounted for a reduction of emissions equivalent to more than 30,000 metric tons of carbon dioxide.

Since the alleged fraud, Washakie purchased and retired an equal amount of RINs to the number identified as invalid and used for compliance purposes. Therefore, EPA does not plan to request that "the obligated parties who used the invalid RINs replace them," EPA said.

This reduces the burden on the parties that purchased and used the RINs for compliance purposes.

"This case is another example of EPA's commitment to maintain the integrity of the RFS program," said Cynthia Giles, EPA assistant administrator for enforcement and compliance assurance. "Making sure producers are supporting their claims with production of actual renewable fuels is critical to reducing greenhouse gas emissions that are fueling climate change."

EPA initially discovered these violations during an EPA inspection of the Washakie facility in Plymouth in 2010, and uncovered additional information concerning the violations in Washakie's response to information requests and additional investigative work by the agency.

Renewable fuel producers and importers generate RINs for each gallon of renewable fuel in the U.S. market that meets greenhouse gas emissions reduction standards established under the Renewable Fuel Standard. The settlement was lodged Thursday, March 19, in the U.S. District Court for the District of Columbia.

"The defendant made quite a profit by failing to adhere to the requirements of the Renewable Fuel Program regulations," said Assistant Attorney General Cruden. "The penalty here sends the message that renewable fuel producers will be held accountable for meeting all legal requirements. The Department of Justice remains committed to taking the profit out of illegal activity."

(BM/AG)

Copyright 2015 DTN/The Progressive Farmer. All rights reserved.