Iowa Cracks Down on Ethanol Fraud

The Iowa Attorney General’s Office has sued a convenience store operator in northeast Iowa, for fraudulently selling E85 fuel as regular unleaded and E10. The suit has been filed in Blackhawk County District Court and names Jerry Fratzke as the defendant. Fratzke, of Jesup, Iowa, owns Pronto markets in Sumner, Fairbank and other locations. The Attorney General sued after an investigation by the state Weights and Measures Bureau of the Iowa Department of Agriculture and Land Stewardship revealed that the Fairbank and Sumner Pronto Market stations were receiving shipments of E85 fuel from Consolidated Energy Company of Jesup. The fuel was put into underground storage tanks at the two Pronto Markets, including tanks that serve unleaded regular gasoline pumps. Neither store had an underground storage tank or pump for E85 fuel. The lawsuit claims that the Pronto Markets in Sumner and Fairbank bought at least 2,500 gallons of E85 fuel. The suit has resulted in Judge Jon C. Fister entering a temporary restraining order prohibiting the stores from engaging in further sales of E85. A hearing on the matter is set for 11:00 a.m. on September 22 in Blackhawk County District Court.

Retailers, such as Fratzke, can purchase the subsidized E85 cheaper than other fuels. But, E85 causes significant damage to vehicles that are not designed to use it – which includes most vehicles. The suit seeks reimbursement of customers and the assessment of civil penalties of up to $40,000 for each violation. Iowa v. Fratzke, et al., No. EQCV106329, filed Aug. 13, 2008 (Blackhawk County, Iowa, District Court).

Read the petition here.