Final answer:
The correct verb and preposition to fill in the blanks for the sentence would be 'operated' and 'guise', making the sentence 'The fake diesel factory was being operated under the guise of a dairy.' This implies that the factory's illegal activities were being hidden behind the facade of a dairy operation.
Step-by-step explanation:
The student's question requires a suitable verb and preposition to complete the sentence, 'The fake diesel factory was being __ under the _ of a dairy.' The verb 'operated' or 'run' and the preposition 'guise' would be appropriate to fill in the blanks, resulting in the sentence: 'The fake diesel factory was being operated under the guise of a dairy.'
In this context, the word 'operated' indicates the function or the activity that is taking place at the factory, and the word 'guise' refers to an appearance or a pretense that is intended to conceal the true nature of the factory. It indicates that the dairy is a front for the illegitimate activities of the fake diesel production. This practice is commonly related to criminal or fraudulent operations where businesses are set up to appear as legitimate in order to disguise the unlawful activities being carried out.
An example to illustrate this sentence could be: 'To avoid detection by the authorities, the smugglers had cleverly disguised their operations, and the fake diesel factory was being operated under the guise of a seemingly harmless dairy.'