Former owner and CEO of defunct Able Energy, Michael Harvey, charged with theft-by-swindle

Monday,

The former owner and CEO of a now-defunct private solar energy and thermal installation company has been charged with theft-by-swindle for defrauding numerous clients across multiple counties in Minnesota, the Hennepin County Attorney's Office announced Monday.

Michael Harvey, 41, of River Falls, Wisconsin, the once owner, CEO and registered agent of Able Energy, which closed in 2018, was charged with one count theft-by-swindle for cheating some 53 clients out of more than $1M with false promises of providing and installing solar panels from January 1, 2017 to July 31, 2018. This charge comes after a year-and-a-half long criminal investigation by the Minnesota Commerce Fraud Bureau, in addition to the Minnesota Department of Labor and Industry’s Construction Codes and Licensing Division which conducted the civil licensing investigation.

Havery’s first appearance is scheduled for Sept. 16 at 1:30 p.m.
 
According to the criminal complaint, at Able Energy, Harvey handled technical issues, oversaw online marketing, and worked on new construction projects. He was also responsible for the company’s finances, acting as the signer for business bank accounts and the bulk of checks withdrawn from its accounts.

Harvey encouraged sales representatives to incentivize customers with the canard that their jobs would move up in the queue should they pay more upfront, the complaint says. This duplicity was done so Harvey could receive a larger amount of cash to “prop up his failing business.”

Harvey also instructed sales representatives to make statements or claims about a client’s contract, such as start dates, which were inaccurate. When employees raised concerns about completing projects, Harvey continued the ruse, pushing representatives to solicit more sales.

In addition to these falsified statements, clients were also encouraged to sign contracts with Able Energy to take advantage of financial incentives through electric utilities or government entities, the complaint states.

One such program was “Made in Minnesota,” which subsidized the installation of solar panels if some components of the solar panel system were made in Minnesota.

By mid-2017, Able Energy was working with a company called Itek, which supplied them with Made in Minnesota eligible solar panels, the complaint continues. For Able Energy to obtain the panels from Itek, advanced payments were required, which further exacerbated the company’s financial issues.

In fall 2017, Itek’s production of eligible solar panels was delayed for approximately two months. Able Energy and Harvey cited this delay in production as a reason why Made in Minnesota customers’ installation timelines would be postponed. However, the installation delays ensued as a result of Able Energy’s inability to pay for panels needed to complete client projects, even when material was readily available, the complaint says.

On Jan. 31, 2018, Itek received a check from Harvey for half of the panels available for his clients. Upon attempting to cash that check, it bounced.

Another program Able Energy used to lure clients with was “SolarSense,” a rebate program offered through Minnesota Power. To qualify for the rebate, the client’s solar installation project had to be finished within a certain time. By December 2017, 10 potential SolarSense projects to be installed by Able Energy did not meet the deadline, and five other projects were likely to miss it as well.

Minnesota Power stopped approving SolarSense applications from Able Energy, notifying the company of their decision in a letter on Dec. 22, 2017.

Despite this, Harvey continued to solicit SolarSense projects, and did not inform clients who had pending applications with SolarSense. Harvey instead submitted applications to Minnesota Power under an assetless and defunct company of Harvey’s called Financed Energy LLC. All applications under Financed Energy LLC were rejected, the complaint states.

On Mar. 1, 2018, Able Energy’s state electrical contractor license expired, and on Mar. 5, 2018, the Minnesota Department of Labor and Industry issued a licensing order stating that Able Energy’s electrical contractor license and Harvey’s master electrician license had been revoked, the complaint says. Despite this revocation, Harvey continued receiving payments from clients who had signed contracts already, and pushed sales associates to continue soliciting more projects.

From Mar. 5, 2018 – July 31, 2018, Harvey collected roughly $82,000 in contract payments. Not a single client was informed that Able Energy’s licenses had been pulled.

Harvey kept Able Energy’s financial troubles hidden from associates, including an accountant he asked for help in January 2018 to assess payroll and taxes. The accountant’s repeated attempts to rectify the troubled situation were declined, with Harvey never submitting bank records to the accountant for review, the complaint continues.

Bank records from late 2016 showed how money came in and out of Able Energy’s accounts, typically beginning with a check from a new contract which would then be deposited into one of the business’ accounts. Then, the money which was earmarked for solar installations, would instead go to expenses such as advertising, loan payments and payroll. Personal purchases at restaurants, retailers, hotels and grocery stores were also made with clients’ money. Funds were also transferred to Harvey’s personal account, the complaint states.

By the end of June 2018, all of Able Energy’s known business accounts were empty, overdrawn or closed.

From Jan 1. 2017 – July 31, 2018, 53 clients from more than 10 counties were defrauded by Harvey for approximately $1M. A total of 22 clients from Hennepin County during the same time period lost $500,000.

Criminal Complaint (PDF)