Heating Oil Companies Face Purity-of-Fuel Investigation

State and federal authorities are investigating whether several New York heating oil businesses cheated tens of thousands of customers for years, selling fuel diluted with recycled or waste oil, according to law enforcement and city officials. As part of the criminal investigation, the authorities on March 12 raided at least five heating oil businesses in and around the city, including a delivery company and several businesses that deal in waste oil and some that are licensed to recycle it.

Two days later, several commercial and residential building owners filed the two lawsuits, seeking class-action status. The civil lawsuits make accusations against two other companies that in recent years have sold tens of millions of gallons of oil to New York City and New York State for schools, housing complexes, universities, hospitals, and other buildings.

The businesses that were raided as part of the criminal investigation included Statewide Oil and Heating in Brooklyn—a company that’s among several that deliver oil for Hess Corporation and that until 2011 delivered for Castle Oil Corporation—and four interrelated companies that deal in waste oil: County Oil Company and J. B. Waste Oil Company in Astoria, Queens; New York Oil Recovery Corporation in Brooklyn; and Paradise Heating Oil in Ossining, N.Y.