The Hidden Crime Wave Behind a Multi-billion Dollar Used Cooking Oil Industry

Used cooking oil (UCO) once read as an operational nuisance for restaurants: pour it into a drum, call a collector and pay a fee. In less than a decade it morphed into a traded commodity worth real money — feedstock for biodiesel, renewable diesel and renewable natural gas — and with value came criminal opportunity. The result: a growing, sometimes violent shadow industry that steals raw material from businesses, infects legitimate biofuel value chains, and raises costs for honest operators and consumers alike.

Industry groups now estimate annual UCO theft in the United States at hundreds of millions of dollars. A recent update from the North American Renderers Association (NARA) raised its conservative annual U.S. theft estimate to $300–$500 million, pending further study — a figure that underlines how widespread the problem has become.

UCO is attractive to thieves because it’s relatively high-value, portable and often poorly secured. When refined, a gallon of processed UCO can be worth several dollars, and in aggregate the volumes move serious cash. Trade analysts and industry reports put the global UCO market in the multi-billion-dollar range, and U.S. processors rely on regional collectors to supply refineries and fuel producers. When raw material disappears overnight, so do restaurant revenues, company margins and — ultimately — the economics of domestic renewable fuel production.

What makes the problem worse is the variety of ways stolen product re-enters the supply chain. Federal indictments and prosecutions across multiple jurisdictions have shown a recurring pattern: thieves siphon UCO from restaurant tanks or unsecured containers, haul it to warehouses, then funnel it to brokers and refineries — sometimes across state lines. In a notable Western New York case, six men were federally charged for stealing large shipments of UCO and moving them to a refinery where the oil was turned into biodiesel. Prosecutors documented night-time siphoning, storage at commercial warehouses, and interstate shipments to buyers.

Law enforcement and U.S. Attorney press releases make clear this is not isolated shoplifting. Federal and state prosecutions from Raleigh to Rochester have identified organized rings and prison sentences. In North Carolina, a defendant was sentenced to more than three years for a multi-state theft and money-laundering scheme tied to UCO. In New York, federal indictments described coordinated stealing and interstate resale of tens of thousands of gallons of oil. Those legal actions prove two things: criminals will target UCO markets at scale, and — when enforcement focuses resources — authorities can break networks.

Still, prosecutions are patchy and reactive rather than systematic. Industry groups and collectors complain that many jurisdictions see grease theft as a petty property crime — not the commercial-scale commodity theft it has become — hampering sustained investigations and deterrence. Trade outlets and industry analysts argue the result is a persistent, low-visibility theft economy that quietly siphons value from restaurants and legitimate processors.

To companies like Buffalo Biodiesel — which changed the industry by collecting and paying for used fryer oil from thousands of restaurants across the Northeast and processes it into renewable feedstock — the theft is an operational crisis. Buffalo Biodiesel’s CEO Sumit Majumdar has publicly described “hundreds of thefts a week” that affect supplier relationships and cash flows, and the company has prioritized theft-prevention investments alongside regulatory compliance upgrades. “This is overwhelming our staff and the system,” Majumdar said in a recent company statement, emphasizing the material effect on operations.

Restaurants lose both immediate revenue (they are paid for their UCO) and the time and trouble of replacing compromised containers. Collectors and small haulers face replacement costs for stolen tanks and storage equipment, higher insurance premiums and the reputational damage of missed pickups. For processors, theft creates spikes in raw-material volatility: supply gaps can push feedstock prices higher, or force firms to rely on imported oils of suspect origin. The downstream result can be higher costs for biodiesel blends — a pass-through that ultimately touches consumers.

Law enforcement cases show a mix of actors. Some operations are opportunistic — local thieves siphoning bins for quick resale. Others are structured organized theft networks that use vehicles, hoses and warehouses to aggregate thousands of gallons destined for brokers. Federal complaints describe conspiracies in which stolen UCO was transported interstate and refined into biodiesel for profit; in at least one case prosecutors say stolen loads were sold to a broker and moved to a Pennsylvania refinery. That kind of organized activity looks less like petty crime and more like commodity fraud.

A complicating factor is the gray market between pure theft and unscrupulous buying. Brokers and even refiners have at times purchased oil from middlemen without sufficient provenance checks. Trade watchdogs and some lawmakers worry that imported oils — labeled as “used” but actually virgin oils or palm oil linked to deforestation — have blurred the market, enabling bad actors to launder product through otherwise legitimate channels. U.S. farm-state senators raised these concerns about surging imports from China, and regulators have been urged to tighten traceability and authentication.

One cause of the problem is the mismatch between the commodity’s value and the regulatory tools used to police it. Local police may view a siphoned drum as petty theft; federal law addresses interstate transport and trafficking but requires investigative bandwidth. The UCO industry has pushed for better tank monitoring, chain-of-custody documentation, and stronger criminal penalties for organized theft. Industry technology vendors say their tools — remote level monitors, GPS tracking and audited ticketing systems — detect theft early and provide the evidence prosecutors need. “Used cooking oil theft isn’t just a nuisance — it’s a serious threat to margins and operational integrity,” says Eric Wise, vice president at Otodata Industrial Solutions, a vendor of UCO tank-monitoring technology.

There’s also a policy angle: agencies that oversee renewable-fuel incentives and trade have grown concerned about fraud and mislabeling. The EPA and the USDA have both been pulled into debates about feedstock authenticity and the scope of domestic incentives — meaning that the UCO theft problem can cascade into compliance and subsidy disputes. Recent proposals and hearings show regulators moving to tighten documentation and auditing for feedstocks used in government-credited biofuels.

The problem sometimes spills into violence. A high-profile recent case involved former NFL quarterback Mark Sanchez, who was stabbed after an altercation with a truck driver who had been collecting used cooking oil behind a hotel. Reporting from the Associated Press and follow-ups indicate the driver was operating a grease-collection truck at the time of the confrontation; surveillance footage and police documents show a chaotic late-night encounter that left Sanchez hospitalized and charged in the episode. Whether that night’s driver was stealing oil or legitimately collecting it remains a matter for local investigators and courts; the incident highlights how friction around night-time grease pickups can escalate when parties cross paths in vulnerable settings.

UCO is a critical feedstock for lower-carbon fuel blends and sustainable aviation fuel (SAF) inputs. When feedstock quality and provenance are uncertain, refineries and fuel buyers face regulatory and reputational risk. Theft that reduces domestic collection capacity can increase reliance on imports — a shift that undermines local circular-economy goals and can increase lifecycle emissions if the imported feedstock is from environmentally damaging sources. In short, unchecked theft not only harms businesses but can slow the clean-fuel transition policymakers want to encourage.

Some promising tactics have already emerged. Collectors and restaurant groups are deploying tamper-proof containers, GPS-enabled trucks, locked tanks and remote level monitors. Tech vendors provide near-real-time alerts and tamper logs that make it easier to prove theft and to provide prosecutable evidence to police. Industry associations urge coordinated law-enforcement task forces and stronger statutory penalties calibrated to the commodity’s value. When authorities prioritize the issue, arrests and convictions follow, and theft rings dissolve.

Companies also emphasize traceability and diligence. Buffalo Biodiesel’s recent public updates on permitting, capital upgrades and investments in monitoring systems demonstrate how a legitimate operator can marry compliance and technology to limit exposure. “With the right policy framework and investment, we can expand responsibly and protect jobs,” Sumit Majumdar says, describing steps the company has taken to harden operations and deepen documentation.

No single fix will end grease theft. The best path combines better physical security, digital monitoring, coordinated enforcement and supply-chain transparency. Policymakers should consider harmonized penalties and incentives for traceability; industry should standardize chain-of-custody paperwork; and buyers (refiners, brokers and end users) must refuse opaque lots that lack provenance. Private technology — from tank sensors to tamper-evident seals and digital ticketing — is effective but requires industry adoption and, in many cases, regulatory backing to scale.

UCO’s rise as a feedstock illustrates a broader truth about commodity markets: convert a waste stream into a valuable product and someone will try to capture the economics — legally or not. The winners will be the companies and communities that pair robust security and compliance with proactive public-policy engagement. The losers are restaurants that find a regular revenue stream disappearing, processors that face raw-material whipsaw, and policymakers who must manage public incentives that can be gamed by bad actors.

If policymakers want a resilient U.S. biofuels industry — one that supports local jobs, reduces emissions and anchors circular economies — they will need to treat UCO theft as exactly what it is: a commercial-scale theft problem requiring commercial-scale responses.

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The Hidden Crime Wave Behind a Multi-billion Dollar Used Cooking Oil Industry