Ethanol proves a good vehicle for con artists and speculators, if not the environment Evan Halper

Los Angeles Times

March 26, 2018

By Evan Halper

Andre Bernard made a killing selling a mirage.

As oil refineries struggled to comply with federal mandates for blending renewable fuels into the nation’s gasoline and diesel supply, Bernard offered a solution: millions of dollars’ worth of biofuel credits they could buy to help meet their obligation. The credits were ostensibly generated by biofuel companies Bernard and his partners owned.

The only problem is they weren’t making the fuel. They were faking it, generating at least $42 million worth of phony credits. Bernard was sent to prison last month.

“The scams just keep coming,” said Doug Parker, a former director of the Environmental Protection Agency’s criminal investigation division. “There has already been north of $500 million in fraud prosecuted. That to me means there have been billions of dollars in fraud losses out there.”

More than a decade after Congress created it at the behest of the corn lobby, the far-reaching mandate to blend increasing volumes of corn-based ethanol and other biofuels into the gas and diesel sold at the pump faces a reckoning.

Influential early allies of the mandate declare it a flop. The billions of gallons of next-generation, climate-friendly fuels the program was supposed to generate aren’t getting made. And the loosely regulated market of biofuel credits that the mandates are built around has become prey for speculators and swindlers.

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