St. Joseph Man Pleads Guilty to His Role in Solar Company’s $1.4 Million Fraud Scheme
| U.S. Attorney’s OfficeSeptember 02, 2015 |
KANSAS CITY, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced an owner of a solar energy installation company in St. Joseph, Mo., pleaded guilty in federal court today to his role in a fraud scheme that totaled nearly $1.4 million in rebates through state and federal programs.
Richard Schonemann, 38, of St. Joseph, waived his right to a grand jury and pleaded guilty before U.S. Chief District Judge Greg Kays to a two-count information that charges him with one count of conspiracy related to false statements in regard to a federal rebate program, and one count of false statements related to kilowatt updates in a federal solar rebate program.
Schonemann was an owner of U.S. Solar in St. Joseph, which sold and installed solar-powered panel systems to businesses and home owners in northwest Missouri. Between 2011 and 2013, Schonemann and U.S. Solar participated in two solar panel rebate programs, one authorized by the state of Missouri and the second administered by the federal government. As a result of this scheme, U.S. Solar received a total of $1,398,236 in fraudulent rebates.
Solar Photovoltaic Rebate Program ($465,360 Fraud Scheme)
According to today’s plea agreement, U.S. Solar and a co-conspirator were involved in obtaining fraudulent rebates from KCP&L as part of the state rebate program. U.S. Solar overstated the number of solar panels installed on approximately 27 homes or businesses from December 2011 through June 2013. As a result, U.S. Solar was paid $465,360 more in rebates than the company was entitled to receive.
KCP&L administered the state’s Solar Photovoltaic Rebate Program, which was created in 2008 by the state of Missouri and funded by a tax on power customers. The rebate allowed for a payment of $2 per watt, not to exceed $50,000, to customers that installed solar powered panel systems on their homes or businesses. U.S. Solar was one of the larger solar powered panel system installation companies that utilized this rebate program through KCP&L. To utilize the state rebate program, U.S. Solar submitted applications and schematic drawings on behalf of their customers via e-mail to KCP&L. Once the application process was completed, funds were disbursed to U.S. Solar by checks mailed from KCP&L.
American Recovery and Reinvestment Act of 2009 ($932,876 Fraud Scheme)
During the investigation of the state rebate scheme, the FBI uncovered unexplained payments from the federal government to U.S. Solar that led to the discovery of a second fraudulent scheme that was part of the conspiracy.
Schonemann and a co-conspirator obtained fraudulent rebates authorized by the American Recovery and Reinvestment Act of 2009. Under the federal program, the government reimbursed 30 percent of the cost of the installation of a solar-powered panel system leased to the property owner. U.S. Solar received federal funds under this program from August 2011 to September 2013, because U.S. Solar certified they installed systems and leased those systems to the property owners. The certification was false because the systems were owned by customers rather than leased. U.S. Solar submitted forged lease contracts in order to receive the federal rebates.
U.S.lar received 34 payments from the federal government, totaling $932,876. U.S. Solar was not eligible to receive any of the $932,876 paid under the federal program.
False Statements
Additionally, each year after installation, U.S. Solar was required to certify that the installed systems were still running and report the systems’ output. Schonemann and a co-conspirator provided updates showing kilowatt usage on each of those properties to the federal government in 2012 and 2013. In some instances, Schonemann simply made up the numbers.
A co-conspirator created false paperwork and computer entries using U.S. Solar customer information. The conspiracy involved the use of false paperwork and computer entries, including lease agreements, certification that U.S. Solar retained ownership of the solar-powered panel systems, detailed cost breakdowns on each system and usage reports. Schonemann and a co-conspirator were involved in preparation of the false usage reports.
One of the fraudulent federal payments related to Schonemann’s place of employment, Prolific Technologies, Inc. Fraudulent paperwork was submitted requesting payment for 36 extra panels not installed or leased, resulting in a rebate overpayment of $20,028.
Penalties
Under the terms of today’s plea agreement, Schonemann must forfeit to the government $350,000 that he received from the fraud scheme.
During the course of the conspiracy, Schonemann received payments from U.S. Solar that were described as profit distributions. A significant source for those profit distributions were funds received by U.S. Solar from the federal program. A portion of those funds were used towards the construction of a new house Schonemann built, which is currently listed for sale at an asking price of over $400,000.
Schonemann’s residential property is currently named in a civil judicial forfeiture action. Schonemann will be allowed to market this property and, if the property is sold, the first $350,000 in net equity will be used to pay restitution for the federal program fraud. If there is not a signed real estate contract on the property by Oct. 1, 2015, the civil forfeiture action shall proceed and the property will be forfeited to the government to be sold by the U.S. Marshal’s Service.
Under the terms of today’s plea agreement, the government’s sentencing recommendation to the court will not exceed 15 months in federal prison. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the FBI.
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