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December 18, 2008

Pronto Market Pays $15,000 Penalty

The Attorney General alleged Pronto Market in Fairbank fraudulently sold blended ethanol fuel diluted into unleaded regular or 10% ethanol fuel.

Jerry Fratzke and Pronto Market must pay a $15,000 civil penalty to the State, according to an order issued Thursday by Black Hawk County District Court Judge Margaret L. Lingreen.

The order resolves a lawsuit filed by Attorney General Tom Miller in August alleging that Pronto Market fraudulently sold E-85 blended ethanol fuel diluted into either unleaded regular gasoline or 10% ethanol-blend fuel.

Fratzke owns Pronto Market convenience stores, with locations in Sumner and Fairbank and other sites. The blended fuel was sold predominantly as unleaded regular at the Fairbank site.

At that time, gasoline retailers could buy E85 blended fuel at substantially lower bulk prices than regular unleaded or 10% ethanol blend fuel (often 30 to 45 cents lower per gallon) because of tax breaks and other incentives to promote E85, which contains 70 to 85 percent ethanol.

Consumers who purchased what was labeled as unleaded regular gas at the Fairbanks Pronto Market may be eligible for restitution of excess amounts paid during a period of Oct. 1, 2007, to June 17, 2008. Consumers will need a receipt or record of purchase, from credit card receipts, for example. Claims must be made by Feb. 13, 2009.

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Additional background and detail:

The suit was based on investigation by the Iowa Department of Agriculture & Land Stewardship (IDALS). The lawsuit was resolved by the Consent Judgment agreement and order that was approved Thursday by Judge Lingreen. [Go to Consent Judgment.]

The lawsuit stated that Ivan Hankins, Bureau Chief of the Weights and Measures Bureau of IDALS, was informed on or about June 17, 2008, that documents indicated Pronto Market was receiving shipments of E85 blended ethanol fuel from Consolidated Energy Company, a bulk fuel distributor in Jesup. The fuel was being diluted in tankers and dumped into underground storage tanks that served primarily unleaded regular gasoline pumps.

The suit alleged that the Pronto Markets bought at least 2,500 gallons of E85 blended ethanol fuel from March 10 to June 6, 2008, and then sold that fuel diluted into either unleaded regular gas or 10% ethanol-enhanced fuel.


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