Renewable energy company pays $387,000 to settle allegations of fraud in American Recovery and Reinvestment Act program

DENVER -- WECSREP Inc., a renewable energy company based in Palm Springs, California, has paid $387,000 to settle allegations that it violated the False Claims Act when it submitted applications to the U.S. Department of Treasury under a program created by the American Recovery and Reinvestment Act of 2009 (ARRA).

The National Renewable Energy Laboratory (NREL) in Golden, Colorado reviewed applications for a program that offered companies up to a 30 percent cash reimbursement for initiating and placing into service “renewable energy properties” such as solar and wind projects.  The funds for the reimbursement came from Treasury funds set aside under section 1603 of the ARRA.

To qualify for this program, companies submitted the costs they incurred building renewable energy projects to NREL, which reviewed and approved projects for reimbursement with Treasury funds.  In its 35 applications to this program, WECSREP claimed inflated installation costs of up to 414 percent of the original installation costs, while concealing the original installation costs from NREL and Treasury.  In many cases, instead of receiving a 30 percent reimbursement for its projects, WECSREP was able to recoup the entire installation cost of the project from Treasury funds based on the inflated costs submitted in its applications.  The money paid to WECSREP went far beyond what was authorized by the program, and the United States alleged that WECSREP’s abuse of this government program violated the False Claims Act.

“WECSCREP abused a renewable energy program set up under the American Recovery and Reinvestment Act to help stimulate the economy in the tough days after the 2008 Financial Crisis,” said U.S. Attorney John Walsh. “By paying this penalty under the False Claims Act, WECSREP is finally handing back the taxpayer money it received by inflating costs estimates, inflated estimates that may have deprived others of the opportunity to participate in these programs at a time of economic crisis.”

“This settlement reinforces the commitment of the Treasury Office of the Inspector General to pursue cases against those who attempt to defraud the U.S. Treasury Department and misuse public funds,” said Assistant Inspector General for Investigations John L. Phillips.

The claims settled by this agreement are allegations only.  There has been no determination of liability.

This matter was investigated by the U.S. Department of Treasury’s Office of Inspector General.  It was handled by Assistant U.S. Attorneys Amanda Rocque and Zeyen Wu.