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Fraud Investigators Raid Prominent Brooklyn Heating Oil Company

Cops and city fraud investigators raided one of the city's top heating oil companies in Brooklyn on Thursday.

The Daily News reports that NYPD officers and Business Integrity Commission officials seized computers and documents from the offices of Approved Oil on Fourth Avenue in Bay Ridge. The company calls itself the largest family-owned heating oil supplier in the city.

The heating oil industry, which relies on thin profit margins, has historically been a hotbed of fraud, with companies devising all sorts of ingenious ways to record more oil on meters than what has actually been provided. Common methods include pumping air into the oil hose, attaching industrial magnets to hoses to thwart air-cutoff valves, heating the oil so it expands, diverting oil back into trucks with hidden mechanisms, and mixing in used motor oil. This last tactic is quasi-legal but harmful to people's health and the environment.

The city has been playing cat and mouse with heating oil companies for decades. Crain's reports that in 1980, investigators found that oil vendors were grifting the city out of $5 million a year by providing less than what they were billing for.

In 2015, city prosecutors indicted 44 people and nine heating oil companies, accusing them of similar frauds worth tens of millions, in some cases alleging that they shortchanged customers by as much as 10 percent of the oil they were supposed to be getting. Of 58 fuel delivery trucks seized in that crackdown, 48 had devices installed to help defraud customers, according to prosecutors.

Approved helped lobby the City Council to create a city requirement for more biofuel to be used in heating oil, the News reported. The CEO of Approved is affiliated with the Teamsters and a trade group that have both pushed back against a proposed bill that would give the Business Integrity Commission, which has pursued past fraud cases, greater oversight in the industry.

The trade group, the New York Heating Oil Association, has resisted calls to implement a system of background checks, audits, and fines for rule-breaking, arguing that it would drive small operators out of business and benefit multinational firms. Heating oil companies are steadily losing ground as natural gas continues to grow as building owners' choice for heating.

Approved did not return a call seeking comment.

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