Three companies and two Colorado principals are paying $2.6 million to settle federal allegations they rigged the federal 1603 renewable energy rebate program, stealing taxpayer funds meant to jumpstart clean energy during the Great Recession. The scheme centered on a biomass plant in Gypsum, where fake development fees were invented, claimed, and then written off—while the government still reimbursed them.
Eagle Valley Clean Energy, LLC, its parent Evergreen Clean Energy Corporation, and Evergreen Clean Energy, LLC—all tied to Dean Rostrom and Kendric Wait—submitted a 2014 application to the U.S. Treasury’s 1603 Program, seeking reimbursement for up to 30 percent of project costs. They claimed $3.2 million in eligible expenses, including $1.5 million in ‘development services’ fees owed to Evergreen Clean Energy, LLC under a contract that, investigators say, was never honored.
Despite billing Eagle Valley for development work, Evergreen never collected the fee. Instead, Eagle Valley wrote off the debt. Evergreen made no attempt to collect. The reimbursement from Treasury, however, still covered 30 percent of that phantom cost—effectively handing the companies hundreds of thousands in taxpayer cash for a payment that never existed. The government says Eagle Valley was required to report the unpaid fee and return the funds. They did neither.
Under the False Claims Act, the United States alleges the entire arrangement was a shell game designed to inflate reimbursable costs. No actual services justified the fee, and the circular contract between related entities smacked of fraud. The Department of Justice says the defendants knowingly submitted false claims to the National Renewable Energy Laboratory (NREL) in Golden, Colorado, which processed applications for the Treasury-backed program.
The settlement requires Eagle Valley Clean Energy to pay $2,350,000, while Dean Rostrom and Kendric Wait each pay $125,000 out of pocket. No criminal charges were filed, but the civil resolution holds them accountable for exploiting a program meant to support legitimate renewable energy development—not financial fraud cloaked in green energy rhetoric.
“This program had important goals: jump-starting the economy during the Great Recession, and helping companies that took real steps to move our renewable energy industry forward,” said U.S. Attorney Jason Dunn. “Taxpayers paid for that program. Companies and individuals who get taxpayer money from government programs like this one, but don’t do what they promised to do, will be held to account and will face consequences.”
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Key Facts
- State: Colorado
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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