Please ensure Javascript is enabled for purposes of website accessibility

Clean Green Fuel owner backs out of plea deal in $9M case

A Perry Hall man accused of selling $9 million worth of phony clean energy credits reversed course on a plea agreement minutes before his 1 p.m. arraignment in the U.S. District Court in Baltimore on Thursday.

Instead of entering a plea, Rodney R. Hailey, 33, made an initial appearance and waived indictment before Magistrate Stephanie A. Gallagher. Assistant U.S. Attorney Stefan D. Cassella told Gallagher he came to court thinking Hailey was pleading guilty, but he was ready to proceed based on an Information against Hailey that included charges of wire fraud, money laundering and a Clean Air Act violation.

“Of course, this counsel was taken by surprise by today’s turn of events,” Cassella said. “But we’re certainly amenable (to proceeding).”

Hailey’s attorney, Andrew C. White of Silverman Thompson Slutkin & White LLC, also referred to the “unusual turn of events” during the appearance. He declined to comment afterwards.

Cassella said he’d never experienced such a quick turnaround in 30 years as a federal prosecutor.

Hailey, who did not comment after his appearance, faces up to 32 years in prison if found guilty on all counts.

Shortly before 1 p.m., he could be seen outside the courtroom where his arraignment was to occur, staring out a third floor window that looks onto Lombard Street.

Hailey entered the courtroom before the judge was called in and he and White went into a side room and conferred privately. When they came out 15 minutes later, the arraignment was scrapped and everyone went four floors up to sit in front of Gallagher instead.

There, the debate centered on whether Hailey was a flight risk. Cassella said he thought Hailey might flee, based on his 180-degree turn on the plea agreement and the fact that the government had only accounted for $3 million of the $9 million Hailey is accused of making on the alleged fraud.

Cassella asked that Hailey be subjected to electronic monitoring.

“Frankly, if he were going to take off, he would have done it before he came to court today,” White argued.

Gallagher denied the request for electronic monitoring and instead handed Hailey over to pre-trial services, to whom he will be required to report regularly. Hailey will be arraigned at a later date.

Hailey’s case was unique from the start.

When he was charged earlier this month, the Oil Price Index Service reported that his federal prosecution is believed to be the first related to a renewable fuel program that was initiated by the Energy Policy Act of 2005 and has been in place since 2007.

According to prosecutors, Hailey registered his business, Clean Green Fuel LLC, with the Environmental Protection Agency on March 26, 2009. He claimed he was using waste oil from restaurants to produce biodiesel at a plant in White Marsh.

Hailey then sold “renewable identification numbers” or RINs — 38-digit numbers that each supposedly corresponded to a certain amount of clean fuel he was producing — to fuel companies and RIN brokers. The RINs have value because oil companies can use them to satisfy their renewable fuel obligations under the Clean Air Act.

The Information released Oct. 3 states that Hailey created, registered with the EPA and sold more than 32 million RINs (which would represent 21 million gallons of biodiesel) without producing a single gallon of biodiesel.

Ron Lamberty, senior vice president of the American Coalition for Ethanol, said over the phone that if the government’s allegations are true, there should be plenty of evidence to prove it.

“If you never make the fuel, at some point the dots are going to be connected because taxes won’t be paid on the fuel,” Lamberty said. “The people you supposedly sell it to, there’s going to be questions about whether they received it, and if they did, why didn’t they pay federal taxes on it?”