The Minnesota attorney general's office returned to court Wednesday seeking an emergency court order that would immediately stop an Excelsior company from selling any more small wind turbines to farmers while a lawsuit the attorney general filed against the company last month proceeds through Hennepin County District Court.
The lawsuit alleges that Renewable Energy SD (RESD) and its owner, Shawn Dooling, 46, of Shorewood, sold farmers in Minnesota and elsewhere faulty windmills using federal stimulus money aimed at helping the country during the recession. The company either failed to deliver many of the windmills or, in some cases, erected turbines that failed to perform properly or at all, the suit says.
Meanwhile, the company filed suit in federal court on Feb. 4, blaming many of its problems on one of its turbine manufacturers, New Jersey-based Polaris America LLC, and its CEO, Christopher A. Filos. That suit alleges breach of contract, fraud and related charges.
"For many turbine orders, RESD has paid the complete purchase price to Polaris -- typically, in excess of $120,000 -- but Polaris has kept the money and has not delivered the turbines," the suit says. "RESD has learned that Polaris is selling RESD's turbines to the highest bidder, and in doing so, converting RESD's turbines and defrauding RESD and its customers out of what is rightfully theirs."
Polaris has not responded to the lawsuit. However, Filos filed an affidavit in the attorney general's case saying RESD had not made any payments for windmills purchased by 40 customers who claim they've paid for the turbines. Many of the problems relate to turbines obtained from manufacturers other than Polaris.
Millions of dollars are at stake. Attorney General Lori Swanson's office identified between 100 and 150 RESD customers and has indications that there may be more. Some 40 customers have filed affidavits in the attorney general's suit, which seeks a temporary restraining order and a prompt accounting from the company.
Company says it will respond
Attorney Thomas Pursell, of Lindquist and Vennum, who represents RESD, said Wednesday that he is studying the motion and will respond later.
According to Swanson, Dooling and his sales staff promised state-of-the-art wind turbines that would last up to 25 years and qualify for federal grants under the American Recovery and Reinvestment Act of 2009. Dooling, who formerly sold security systems in Minnesota and Missouri, formed RESD in South Dakota, about two months after the law took effect. The law provided grants to cover 30 percent of each turbine's cost.
Swanson's lawsuit says farmers were told the windmills would produce excess energy that could be sold to the power grid, earning them $700 to $1,300 a month that could be used to recoup their initial costs within five to 10 years. The company promised to quickly obtain the necessary permits, apply for stimulus funds and bank loans, and build and maintain the windmills.
Swanson said at a January news conference that RESD broke its promises repeatedly. When farmers complained, she said, the company refused to refund their money and pressured them to buy upgraded equipment to salvage their initial investment. In some cases, the more expensive replacements also failed or produced just a fraction of the promised energy.
As a result, farmers had to pay interest on money they borrowed to install the units. Rules on federal stimulus money require that the equipment work for at least five years, so farmers might also be forced to repay the grants.
In the interim, Dooling has lived in expensive homes and driven luxury automobiles. Swanson's suit says he and RESD spent about $1.1 million in the past few years on two Bentleys, a Lamborghini, a Ferrari and two Audis.
Investigators also found a 37-foot boat named "Under Surveillance" registered to Dooling.
The company said in a statement that it will address its customers' concerns.
Dan Browning 612-673-4493