Abound Solar under investigation for fraud in Colorado

 

Abound Solar's manufacturing lineFollowing Abound Solar’s bankruptcy filing earlier this year, Weld County, Col., District Attorney Ken Buck launched an investigation into whether the company committed fraud and some other allegations. The company is being investigated over whether or not the company knowingly sold defective photovoltaic modules.

At this point no charges have been filed against the company or its executives. The chief allegation against the company is that it knew its cadmium telluride (CadTe) photovoltaic modules were defective prior to securing funding through the Department of Energy’s (DOE’s) now defunct loan guarantee program. The allegations include that the modules were defective, could catch fire and produced less energy than promised.

“Investigators are looking into possible instances of securities fraud based on 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 office said.

The company received a $400 million loan guarantee from the DOE, but was only able to access $70 million of it before the DOE said the company did not meet certain thresholds that would allow it to access more of the funding. After that the company was unable to raise funds from other sources that would allow it to move forward, so it declared bankruptcy, citing pricing competition from China as one of the main factors behind its inability to raise capital.

As with the Solyndra case, Republicans were quick to pounce on the Abound bankruptcy and allegations of impropriety, "We heard from one employee, a whistleblower employee, who made the statement; the solar panels worked fine as long as you didn't put them in the sun," Colorado Rep. Cory Gardner (R) told Fox News.  

As such, the District Attorney’s office in Weld County launched an investigation. “The district attorney emphasizes that the office is looking into allegations, and there is always a presumption of innocence. No one has been charged with a crime at this early point in the investigation,” the office said.

The office is conducting a secondary investigation as to whether Abound misled investors when it received a bridge loan to keep the company afloat until it received federally guaranteed loans. It’s also looking into whether Abound  engaged in consumer fraud and knowingly sold defective products to consumers.

At the same time the U.S. House Energy and Commerce Committee is undertaking a document probe, which is separate from the work being done through the county DA’s office, it said.

 

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