Ormat and Puna Geothermal Agree to Pay the United States $5.5 Million to Resolve Civil Fraud Allegations

Several Reno companies that operate geothermal power plants in Nevada, California, Hawaii, and elsewhere, have agreed to pay the United States $5.5 million to resolve civil fraud allegations that they unlawfully applied for and received millions in federal clean energy grants, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.

“The False Claims Act is an effective civil tool to ferret out fraud in federal taxpayer-funded programs,” said U.S. Attorney Bogden. “The settlement monies announced today will be deposited into a federal fund used to help crime victims and for a variety of other law enforcement purposes.”

Ormat Technologies, Inc., Ormat Nevada, Inc., Puna Geothermal Venture II, L.P., ORNI 18, LLC, and Puna Geothermal Venture, G.P. (hereinafter referred to as Ormat), and the United States entered into the agreement to avoid the delay, uncertainty and expense of protracted litigation. The agreement states that it is neither an admission of liability by the defendants nor a concession by the United States that its claims are not well founded.

The settlement agreement, effective this week, arises out of a civil lawsuit filed on Feb. 4, 2013, by Tina Calilung and Jamie Kell against Ormat alleging that they violated the civil False Claims Act by submitting false applications for federal clean energy grants to which they were not entitled. The defendant companies are based in Reno, Nev. Calilung and Kell are former employees of Ormat Technologies.

The lawsuit alleged that the federal government had claims against the defendant arising from the submission of applications for and receipt of grants under the American Recovery and Reinvestment Tax Act of 2009, related to the 8MW Puna Geothermal Power Plant and Puna KS-14 Well, both on the island of Hawaii, and the North Brawley Geothermal Power Plant in Imperial County, Calif.

puna-geothermal-venture-signSince January 2009 and through the end of federal fiscal year 2015, the Justice Department has recovered a total of more than $26.4 billion from cases involving fraud and false claims against the government. The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans’ benefits, federally insured loans and mortgages, highway funds, research grants, agricultural supports, school lunches, and disaster assistance. In 1986, Congress strengthened the Act by amending it to increase incentives for whistleblowers to file lawsuits on behalf of the government.

Most false claims actions are filed under the Act’s whistleblower, or qui tam, provisions that allow individuals to file lawsuits alleging false claims on behalf of the government. If the government prevails in the action, the whistleblower, also known as the relator, receives up to 30 percent of the recovery. Whistleblowers filed 638 qui tam suits in fiscal year 2015 and the department recovered $2.8 billion in these and earlier filed suits this past year. Whistleblower awards during the same period totaled $597 million. https://www.justice.gov/opa/pr/justice-department-recovers-over-35-billion-false-claims-act-cases-fiscal-year-2015.

Assistant United States Attorney Roger Wenthe handled the case on behalf of the U.S. Attorney’s Office for the District of Nevada.

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