I have two stories about red diesel.
First. I have a buddy that has a F350 that sticks out like a sore thumb. He was driving across country and wasn't paying attention to his fuel gauge when he realized he was running low. He was in the middle of nowhere and it was late at night. A station was nowhere to be found. He drove onto a farm hoping that he might be able to buy some diesel. I think the farmer sold him 5 gallons for $20. He left the farm and got on his way. Less than 5 minutes later, he got pulled over by a state trooper. He wanted to dip his tank. Guess what was in his tank? Red diesel. He got a ticket for it. He didn't even know what off road diesel was until that day. The old man called the cops after he was done screwing him for the diesel. Why else would he get pulled over to check his tank.
Second. Another buddy worked in the shop of a large construction company. They had hundreds of trucks and off road equipment. One day he is looking out the window into the yard. There is a woman going from truck to truck. He walks out to ask the woman what she is doing. Turns out she is with the state. She was dipping the tanks of the pickups to see if there was any off road diesel in them. So I guess if you buy thousands of gallons of red diesel, they might just check to see if it's going into the right tank.
I forgot one more. One guy told me that many years ago when he ran auto transporters, he used to use off road diesel. His trucks had the tanks locked and the drivers didn't have a key. If they ever tried to check the tanks, no one could open the caps. He said it was legal to do it that way, locking caps not the red diesel part.