EYEWITNESS NEWS (WBRE/WYOU) — There’s been a rise in restaurant cooking oil thefts, a multi-million dollar industry that thieves are taking a huge chunk out of.
Buffalo Biodiesel is the company that collects used cooking oil from many NEPA restaurants and converts it to biofuel which they sell to refineries. Most of it becomes jet fuel with lower carbon emissions.
The government gives big tax credits to incentivize this kind of clean energy production. Sumit Majumdar, owner and president of Buffalo Biodiesel, says it’s a lucrative industry, but it’s being hijacked by the black market. Madjumar says they lost $10 million last year, a third of his revenue, to theft.
“There’s a ton of money in our industry and what’s happening right now is the bad guys, a lot of our competitors, don’t really care where the oil comes from. So they’re recruiting people to steal the oil,” Majumdar said.
The cooking oil thefts we’ve seen in NEPA are just the tip of the iceberg according to Majumdar, who says the problem got out of control in the last couple of years. Majumdar says oil is in such high demand that collectors like himself are sold out.
Refineries need oil. Majumdar believes in some cases, a front is set up to meet that need and launder money. The front or reseller, recruits and pays people in cash to steal oil. He says then they recertify the oil so it looks legitimate and sells it to refineries who process it and sell to big fuel companies via wire transfer.
“The broker, the guy who’s doing this dirty business, what’s happening is he’s not deposited a single penny of cash in his bank or withdrawn a single penny of cash which makes him the most sophisticated drug money operation or money laundering operation there is,” Majumdar said.
Similar operations were recently brought down in North Carolina. Majumdar believes this will eventually force him to sell his company to a larger corporation. But he’s more concerned for the local restaurant owners encountering organized criminals at their own business.
“Why should people care? You just don’t want to see your local owner getting assaulted by some criminals from out of state and out of town. That’s really what the problem is,” Majumdar said.