Abound Solar employees work
at the end of the company's automated production line in this file photo.
Manufacturing technicians Debbie Jakel, left, and Steve Yun, take a closer
inspection of one of the panels at it comes off the line and measurements are
taken. (Kathryn Scott Osler, The Denver Post)
Abound Solar, the defunct solar-panel
manufacturer, is under criminal investigation for possible securities fraud,
consumer fraud and financial misrepresentation, the Weld County district
attorney's office said Thursday.
Loveland-based Abound closed its
Colorado plant in July and filed for Chapter 7 bankruptcy liquidation in a
move that left 125 workers without jobs and taxpayers holding the bag for up to
$60 million in defaulted loans.
Abound Solar employees work
on the production line in this file photo. The long automated production line
can be seen behind Manufacturing Technician Gerald Bryant. (Kathryn Scott Osler,
The Denver Post)
The DA's office said no criminal charges have been filed.
Weld County officials confirmed the existence of an investigation to The
Denver Post last week, but Thursday's announcement provided more detail on the
nature of the investigation.
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.
Representatives of the company could not be reached for comment.
Abound has become the subject of political controversy over its failure after
the U.S. Department of Energy approved up to $400 million in federal loan
guarantees for the company.
Abound drew about $70 million in guaranteed loans. The DOE has estimated that
U.S. taxpayers will be on the hook for about $40 million to $60 million after
Abound officials blamed the shutdown on crippling competition from low-cost
Chinese manufacturers. But congressional Republicans, including U.S. Rep. Cory
Gardner of Colorado, are investigating to determine whether the DOE was aware of
Abound's alleged technical problems before it authorized the loan-guarantee
package in 2010.
DOE spokesman Damien LaVera said Thursday that Abound's loan package was
canceled because the company failed to meet "milestones" stipulated in the loan
agreement. He would not disclose which benchmarks were missed but said typical
guidelines include technological, financial and scheduling measures.
The Weld County DA's office said its investigation is unrelated to the
congressional probe. It said no further information will be released "to protect
the integrity of this active and ongoing investigation."
Abound, formerly known as AVA Solar, was created in 2007 by energy
researchers at Colorado State University. The company licensed the technology
from CSU and operated independently from the university.
CSU spokesman Mike Hooker said he is not aware of any university officials
being under investigation related to Abound.