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DOE-Backed Abound Solar Facing Fraud Investigation in Colorado

Posted By Michael Sandoval On October 26, 2012 @ 2:31 pm In Scribe | Comments Disabled

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Abound Solar, the now-bankrupt solar company [2] and recipient of a $400 million Department of Energy loan guarantee, faces a three-pronged investigation from Weld County, CO, for alleged securities and consumer fraud, along with misleading financial institutions.

The Denver Post reports [3]:

The securities-fraud investigation stems from allegations that “officials at Abound Solar knew products the company was selling were defective, and then asked investors to invest in the company without telling them about the defective products,” the DA’s office said in a news release.

Similarly, the consumer-fraud allegation is that Abound knowingly sold defective panels to customers.

The third subject of investigation is that Abound allegedly misled financial institutions when the company was seeking loans.

The Post also reports that no criminal charges have been filed.

Abound Solar’s demise could cost taxpayers as much as $60 million, after the company tapped $70 million of its DOE loan guarantee.

After a Daily Caller story revealed documents [4] alleging the company knowingly sold “faulty, underperforming product” and suggested a possible intent to mislead lenders, another Denver media outlet reported documents indicating “catastrophic failure” [5] by the solar manufacturer’s panels.

The solar manufacturer also faces congressional scrutiny [6]:

Chairman Fred Upton (R-MI), Representative Cliff Stearns (R-FL), and Representative Cory Gardner (R-CO) issued a letter to Energy Department Secretary Steven Chu “requesting key documents and information concerning the loan in light of recent news reports highlighting Abound’s technological and manufacturing problems,” according to a statement.

“Recent reports and publicly available documents indicate that persistent technological problems contributed to Abound’s inability to remain commercially viable and, ultimately, its bankruptcy. We have questions about what role these technological problems played in DOE’s decision to suspend Abound’s loan guarantee disbursements in September 2011, and when DOE first became aware of these problems,” they wrote.

The Weld County investigation and congressional document probe are unrelated, according to the Post report.

In July, Abound Solar executives blamed Chinese government subsidies [7] and “aggressive price-cutting” for the company’s failure in testimony before the House Oversight and Government Reform Committee.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/10/26/doe-backed-abound-solar-facing-fraud-investigation-in-colorado/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/Abound-Solar-e1349521332419.jpg

[2] now-bankrupt solar company: http://www.denverpost.com/business/ci_20968001

[3] Denver Post reports: http://www.denverpost.com/commented/ci_21853854?source=commented-

[4] Daily Caller story revealed documents: http://dailycaller.com/2012/10/02/sources-documents-suggest-government-subsidized-abound-solar-was-selling-faulty-product/

[5] reported documents indicating “catastrophic failure”: http://blog.heritage.org/2012/10/06/bankrupt-doe-loan-recipient-abound-solar-under-investigation-panels-suffered-catastrophic-failure/

[6] also faces congressional scrutiny: http://blog.heritage.org/2012/10/11/house-committee-launches-document-probe-into-doe-abound-solar/

[7] Abound Solar executives blamed Chinese government subsidies: http://blog.heritage.org/2012/07/18/solar-company-leaders-blame-china-not-loan-process-for-bankruptcy/

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