Feds charge 6 NY residents with stealing cooking oil that made its way to Erie refinery

Among the millions of pounds of used cooking oil that flowed into an Erie refinery to be made into biodiesel fuel in 2022 was a quantity of old oil collected from restaurants in the Rochester, New York, area.

Unknown to the plant's operators was that the oil, roughly 92,000 pounds of it, had been stolen from those restaurants, federal authorities allege in a criminal complaint filed against six New York residents earlier this month.

The six — Guodeng Chen, Didi Huang and Fangfang Yan, of Pittsford, New York, and Ruimao Yang, Yan Han and Wen Xiao Zhang, of New York — are charged federally with conspiracy and the transportation and sale of stolen goods in interstate commerce in an investigation by the Monroe County, New York, Sheriff's Office and the federal Homeland Security Investigations, according to information released by the U.S. Attorney's Office in the Western District of New York.

Authorities accuse the six of stealing used cooking oil from restaurants in and around Monroe County. Investigators learned through a review of documents and records that the defendants sold the oil that eventually made its way to the Hero BX biodiesel in Erie in April 2022. Two specific shipments totaled about 92,000 pounds of oil, according to Chris Peterson, president of Hero BX.

The defendants were paid $60,051 for the two shipments, federal authorities wrote in a news release announcing the arrests of the suspects.

Investigators learned through an interview with refinery representatives in October that the refinery regularly purchases used cooking oil from a broker, and that it had received two brokered oil shipments from two addresses from Rochester in April 2022, according to information in the criminal complaint.

"The representatives stated they would have no idea if the used cooking oil received by (the refinery) on April 7, 2022 and April 28, 2022 was stolen," investigators wrote in the complaint.

Fueling an industry

Restaurants generally recycle their used cooking oil by selling it to a third party that will pay between 25 cents and 60 cents per gallon. The oil is then sold to a refinery where water and impurities are extracted so it can be converted into biodiesel fuel, which sells for $4 to $5 per gallon, investigators wrote in the criminal complaint against the six accused New York residents.

The quantity of stolen cooking oil that made its way to Hero BX is a fraction of what gets processed into biodiesel at the Erie facility. Peterson said the plant uses between 35 million and 38 million pounds of oil a month.

He said Hero BX typically gets its oil from large collectors or aggregators. One firm that supplies the plant collects from about 1,500 restaurants in several states, Peterson said.

"They produce enough to run us for a few days," he said.

Hero BX doesn't take used cooking oil "off the street" for two reasons, Peterson said. First, it's not clean enough, as the oil the plant takes in is processed to remove water and foodstuff in it.

Secondly, "we don't want to deal with the theft," Peterson said, noting that used cooking oil theft has been a problem for a number of years because of the money that can be made from selling it.

Caught in the act

Authorities in the Rochester, New York, area had been investigating a series of reported used cooking oil thefts from storage tanks belonging to companies that pay restaurants for the oil when, in April 2022, law enforcement began tracking the movements of a couple suspicious trucks, according to information in the criminal complaint.

Investigators tracked the movements of the trucks to a number of restaurants and plazas in the Rochester area, where they found third-party storage tanks that were mostly empty, according to the complaint. The investigation led them to two addresses on Commerce Drive in Rochester, where the stolen oil was pumped from the trucks.

Investigators wrote that they reviewed invoices that showed oil being shipped from one of the Commerce Drive warehouses to Hero BX's Erie facility.

Search warrants served in the investigation included one served on one of the Commerce Drive addresses, where investigators found tanks, containers and machines used for the storage and processing of used cooking oil, according to information in the complaint. During searches of both Commerce Drive addresses, investigators found 12,461 gallons of unrefined oil worth more than $73,000, authorities wrote in the news release announcing the arrests.

The six defendants are being prosecuted in the Western District of New York. The charges they face carry a maximum penalty of 10 years in prison and a $250,000 fine, according to the U.S. Attorney's Office.

Contact Tim Hahn at thahn@timesnews.com. Follow him on Twitter @ETNhahn.

This article originally appeared on Erie Times-News: Feds charge 6 in NY with stealing cooking oil that went to Erie plant