A company called NGL Crude Logistics reportedly generated and sold 36 million fraudulent renewable-energy credits by processing and re-processing the same barrels of biodiesel.

In a press release today, the Department of Justice said that it had reached a settlement with NGL over its fraudulent activity. NGL will be compelled to pay a $25 million fine and buy back $10 million in fraudulent credits.

Those credits are called Renewable Identification Numbers, or RINs. The Environmental Protection Agency (EPA) requires that fuel producers in the US either blend a certain amount of biofuel into their primary fossil-fuel-based product or, in certain cases, fuel producers can purchase RINs in lieu of that blending.

The scheme in question apparently involved a second company called Western Dubuque Biodiesel. NGL bought millions of gallons of biodiesel "on the open market," according to the DOJ. That biodiesel came with 36 million legitimate RINs, which certified that the associated biofuel was genuine. NGL turned around and sold the RINs to fuel producers and then sold the RIN-less biodiesel to Western Dubuque after marking the biodiesel as "feedstock." Western Dubuque then reprocessed the biodiesel and did the paperwork for a second set of 36 million RINs. Western Dubuque sold the fuel and the new, illegitimate RINs back to NGL, who sold the illegitimate RINs to more fuel producers.

Western Dubuque settled with the DOJ in 2016, paying a civil penalty of $6 million.

The DOJ has been aggressive in pursuing people and companies that have committed biofuel fraud. Just last month, a man who had generated millions in fraudulent renewable fuel credits and tax credits was sentenced to 63 months in prison and $26 million in fines.

"The system only works if we can assure the integrity of the RIN marketplace," Susan Bodine, assistant administrator of the Office of Enforcement and Compliance Assurance, said on a press call this morning.

"NGL was cheating... in doing that, they made a multimillion-dollar profit," she added.

Bodine went on to say that NGL faces a stiffer penalty than Western Dubuque because NGL drew Western Dubuque into the scheme. NGL has until December 2019 to buy back all of the fraudulent RINs that it sold.

On the same call, Principal Deputy Associate Attorney General Jesse Panuccio noted that federal courts have imposed nearly $60 million in civil penalties related to biofuel fraud over the lifetime of the program, as well as $300 million in criminal restitution. "The median sentence for such criminal violations is a six-year prison term," Panuccio added.