U.S. District Judge Allows False Claims Suit to Proceed against Renewable Energy Company

U.S. District Court Judge Robert C. Jones denied a renewable energy company's Motion for Summary Judgment. The qui tam action that was brought under the False Claims Act alleged that the renewable energy company committed fraudulent actions from which it received approximately $136,800,000 in grant money from the United States, pursuant to Section 1603 of the American Recovery and Reinvestment Act of 2009 ("ARRA").

Former employees of the company ("Relators") claim to have "direct, independent and personal knowledge" of the company's alleged scheme to submit false information to the Secretary of the Treasury to obtain ARRA Section 1603 grants. The Relators allege that the company:

• misrepresented the placed-in-service date for the company's power plant;

• inflated the eligible basis of the company's power plant by intentionally driving up costs;

• misrepresented the viability of the power plant in order to qualify for additional Section 1603 funds;

• falsely represented an expansion of another power plant as a standalone facility;

• fraudulently allocated the full cost of the KS-14 production well to said expansion instead of representing that an ineligible property was the real beneficiary of the expense; and

• violated the Terms and Conditions of the Section 1603 program by submitting false or fraudulent annual reports for the power plant in order to prevent the recapture or disallowance of the Section 1603 funds obtained already.