Testimony continues in $50 million solar 'scheme' trial

By Amy Joi O'Donoghue

Published: April 19, 2018 3:17 pm

SALT LAKE CITY Customers of a Utah-based energy technology company testified Thursday in federal court about their purchases of solar lenses purchases the federal government contends are a part of an "abusive tax scheme" costing the U.S. Treasury at least $50 million.

The U.S. Department of Justice in 2015 sought to stop RaPower3, International Automated Systems, LTB1, Gregory Shepard, Neldon Johnson and Roger Freeborn from selling the lenses.

The government says the lenses have never been associated with any production of energy and never will.

In documents filed in federal court before Judge David Nuffer, federal prosecutors assert customers sign a contract to purchase a solar lens for $3,500 for a rectangular piece of plastic that costs between $52 and $70.

As the Deseret News first reported in 2013, Johnson and IAUS were involved in promoting low-cost revolutionary energy technology for more than a decade that had not been associated with any significant production of energy.

One of those projects involve a Millard County "plant" in which solar tree arrays have been erected and where a warehouse sits. Shepard, associated with RaPower3, organizes tours for the Delta facility.

Lynette Williams told the court Thursday she'd been to the site multiple times since her purchases of lenses.

Each time, she testified she saw "progress being made ... Every time I went, progressively more things were being done."

Williams said she was looking to make residual income when she purchased $54,000 worth of lenses, beginning 10 years ago.

The South Jordan resident said she never took the complete tax credit which is a third of the purchase price and remains happy with the company despite the lack of energy production.

"I am a techy girl," she testified. "It always takes longer than you think it will take."

The government contends that Shepard and Freeborn (who has since died) sold the lenses by telling people of three ways to make money: through tax benefits, rental of the lenses, and from a bonus contact.

"But they both knew that the only way a customer has ever 'made money' from buying a lens is through tax benefits; no customer has earned money from rental income or from income from a bonus contract," according to a court document.

Preston Fredrick Olsen, a Salt Lake City attorney, testified that he invested between $74,000 and $84,000 out-of-pocket on the lenses, beginning in 2009.

He has 59 lenses but told Department of Justice attorney Christopher R. Moran he can't identify in particular which of the lenses may belong to him at the Delta site.

"One of them is mine," he said.

Olsen told the court he has not received any income from the lenses or from bonus contracts.

He formed a distribution company to sell the lenses from RaPower3 and projects he will see future revenue from rentals and bonuses, according to his testimony.

Olsen said he's been claiming the federal tax credits on the purchases of lenses, and bases his purchases depending on how it would affect his tax liability.

"Sometimes I bought too many, sometimes I bought too few."

According to the Department of Justice, the IRS began investigating the defendants in 2012. By 2013, the IRS was auditing their customers.

RaPower3 and Johnson, according to the government, continue to promote their technology.

Olsen said he listens to a weekly radio program that still broadcasts and touts the benefits of the energy technology.

The trial continues Friday.

Link to original article at DeseretNews.com