The luxury auction house Christie's will begin auctioning off $15 million of ill-gotten artwork obtained from renewable fuel fraudsters, after they were caught selling fake credits used to comply with the Environmental Protection Agency's biofuel program to major oil companies and refiners.
The fraud scandal unfolded in the early part of the decade and is widely considered a black mark on the EPA Renewable Fuel Standard program, or RFS.
The EPA program requires oil companies and refiners to blend ethanol, biodiesel and a host of other advanced fuels into the nation's fuel supply or be penalized.
The scandal crushed the market value of clean diesel credits, forcing many biofuel companies to file for bankruptcy, while sparking the ire of oil companies that were fined by the EPA for using the phony credits, even though it was proven they were unaware that the credits were fake.
Refiners forced the EPA to devise a rule that would make biofuel firms responsible for verifying credits before selling them on the open market by third-party auditors. And all this because of a few bad apples in the biofuels bunch.
Christie's will be auctioning off the $15 million worth of highly sought-after photography, which one of the fraudulent companies, Green Diesel, used to launder its millions. The international art publication of record, Art Newspaper, says the U.S. Attorney General Office of New Jersey recently "consigned the confiscated works to Christie's, which will sell them in a series of themed auctions" in New York starting Feb. 17.
The U.S. Attorney's office said the collection of artwork contains more than 2,200 pieces valued at more than $15 million. A Justice Department complaint says "the artwork — bought with money from the sale of fraudulent credits for renewable fuel — was transported in interstate commerce knowing that it was the proceeds of fraud and was utilized in laundering the proceeds of fraud."
The U.S. Attorney says the owner of Houston-based Green Diesel, Philip Rivkin, got the District of New Jersey involved because he sent 396 packages of artwork to a warehouse on Frelinghuysen Avenue in Newark, outside of New York City.
"The artwork was stored there until late June 2012, when it was moved to a warehouse in New York on its way to Spain," the complaint reads. It was seized on July 12, 2012.
In addition to the photography, the Justice Department seized more than $29 million in cash, Lamborghini and Maserati sports cars, and a Bentley. Federal agents also seized a plane. Rivkin pleaded guilty earlier this year to a 68-count indictment. He faces 10 years in jail and must pay $51 million in restitution.
Rivkin made almost $80 million from selling the phony credits over a year and a half, while producing no biofuel.
- Some of the higher-priced works confiscated in 2013, according to the Attorney's office, include: "Georgia O'Keeffe" by Alfred Stieglitz, bought from for $675,000.
- "Vortograph 1917" by Alvin Langdon Coburn, bought for $175,000.
- "Dunes, Oceano" by Edward Weston, bought from Sotheby's for $134,500.
- "Notre Dame" by Eugene Atget, bought from Camera Lucida for $130,000.
The proceeds from the auction will be used by Justice to reimburse victims of the fraud, according to the U.S. Attorney.