Holtec has entered into a binding agreement with the State that will be in effect for up to three years. Holtec has agreed not to further pursue the Angel Investor Tax Credits for which Holtec and SRE submitted applications to the EDA in November 2018 and forego the $1 million in tax credits the companies claimed were due to them. Holtec further agreed to use an independent reviewer for any submissions it makes to State agencies for new applications for benefits during the term of the agreement. SRE has also agreed to a similar agreement, under which it too will not further pursue the Angel Investor Tax Credits for which Holtec and SRE submitted applications to the EDA in November 2018 and will use an independent reviewer for any submissions it makes to State agencies for benefits during the three-year term of the agreement. By the terms of the agreement, failure to comply with the conditions set by the State will result in the criminal prosecution of both companies, and potentially also individuals connected with the companies.

“These agreements reinforce our commitment to protecting New Jersey’s taxpayers and ensuring fairness and integrity in our economic system by preventing companies from defrauding the State’s tax incentive programs,” said Attorney General Platkin. “Today, we are sending a clear message: no matter how big and powerful you are, if you lie to the State for financial gain, we will hold you accountable – period.”

During the term of the agreements, Holtec and SRE will each use an outside independent reviewer approved by the State in all dealings concerning new awards, tax credits, loans and other benefits it may seek from any departments, authorities or agencies, including but not limited to the EDA. In the event either company seeks such new benefits, the reviewer must file reports with the State about Holtec’s and SRE’s compliance with each’s agreement.

The State has agreed not to prosecute Holtec and SRE for the November 2018 tax credit applications conduct in exchange for compliance with the terms of the agreements reached today. Nothing in the agreements restricts the ability of the State to investigate and prosecute any current or former Holtec or SRE director, officer, employee, or agent for unrelated matters not part of the agreement.

“This multimillion-dollar settlement serves as notice to other companies and individuals that attempts to exploit the State’s tax incentive program will be investigated and addressed,” said OPIA Executive Director Thomas Eicher. “Taxpayers should be confident in knowing that attempts to manipulate the system will be met with firm consequences.”

According to the agreements, Holtec is an energy technology company involved in, among other activities, the decommissioning of nuclear power sites. Representatives from Holtec and Eos Energy Storage (“Eos”), which produced batteries and battery systems for energy storage, conducted a series of meetings that resulted in Holtec investing $12 million in Eos in July 2018, in exchange for over 6 million shares of Eos. The President and Chief Executive Officer of Holtec signed the agreement on behalf of the company.

After the investment was complete, Holtec learned about the EDA’s Angel Investor Tax Credit Program, which provides tax incentives for qualified investments in emerging technology companies in New Jersey. Investors can be awarded tax credits of 10% of their investment, capped at $500,000 – meaning, any investment over $5 million would earn only the maximum $500,000 credit.

Despite Holtec having already made its $12 million investment in Eos, and in an attempt to double its tax credit from $500,000 to $1 million, new investment documents created sometime in September or October 2018 that Holtec, and Singh Real Estate Enterprises had each made a $6 million investment were “as of” July 2018, the date of Holtec’s original investment. The documents did not reflect anywhere that they had been created sometime in September or October 2018. SRE representatives had not participated in Holtec’s pre-investment meetings with Eos, did not have access to the investor data that was supplied to Holtec and had no plans to invest in Eos at the time of the July investment.

The applications for tax credits filed with the EDA by Holtec said the $6 million investments by Holtec and SRE had been made “as of” July 2018. At no time did Holtec, SRE, or anyone else inform the EDA that: (a) Holtec alone had made a $12 million investment in Eos in July 2018; (b) SRE had not actually invested in Eos in July 2018; (c) over 3 million shares of Eos owned by Holtec after its $12 million investment had been returned to Eos by Holtec and then re-issued to SRE by Eos at Holtec’s request in October 2018 despite there being no additional exchange of funds between Eos and either of the two companies; or (d) documents had been created in October 2018 and dated July 2018 or “as of” July 2018 to make it appear as though Holtec invested $6 million and SRE invested $6 million in Eos in July 2018, when in fact in July 2018, SRE was not contemplating an investment in Eos, had done no due diligence for such an investment, and made no investment in EOS.

The EDA relied on the information contained in the applications and documentation submitted to it and approved $500,000 tax credits for each of Holtec and SRE’s purported investments in Eos. Tax credit certificates were issued in the names of various owners of Holtec and SRE. After the certificates were issued, Holtec attempted to persuade the EDA or the State of New Jersey to re-issue the tax credit certificates in the names of Holtec and SRE. The EDA refused to do so, noting that Holtec’s applications to the EDA for various tax credits were under investigation.

OPIA Assistant Attorney General Anthony Picione, Deputy Attorneys General Adam Gerken, Andrew Wellbrock, Diana Bibb, and Domenico Stockton Rossini, former Deputy Attorney General Colin Keiffer, and detectives from the New Jersey State Police Official Corruption Unit investigated the case under the supervision of OPIA Executive Director Eicher.

A copy of the agreements reached between the State, Holtec, and SRE are being made publicly available at

https://www.nj.gov/oag/newsreleases24/2024-0130_Holtec-NPA.pdf

https://www.nj.gov/oag/newsreleases24/2024-0130_SRE-NPA.pdf

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