Are Utahn's solar projects just pie in the sky? Claims raise questions in Millard County, elsewhere
Both representatives of the Governor's Office of Energy Development and Utah Clean Energy, a nonprofit advocacy organization that helps facilitate the development of renewable energy in Utah, said they have heard of IAUS and its latest corporate partner, RaPower3, but have never worked with them on any project.
"We are not working with that company," said Samantha Mary Julian, director of the state energy office. "Normally we get asked to work with companies, help them with ordinances, permits, advice, all kinds of things."
Julian said her office gives state-funded incentives to established technology. She said the IAUS technology being promoted in partnership with RaPower3 is something she's not familiar with.
Utah, she stressed, has no producing, "utility-scale," large solar projects.
"There are a couple utility-scale projects larger than 2 megawatts that are looking to come online," she said. "They could come online next year or the following year."
Neldon Johnson, for his part, insists his technology is viable and has other applications beyond the generation of electricity, such as the creation of heat to warm buildings or to purify brackish water for irrigation purposes.
The solar technology developed by Johnson through his company is not his first foray into business in which he claims an invention will achieve revolutionary technological accomplishments.
Before the solar thermal lenses the RaPower3 website said he developed with assistance of Hubble Space Telescope scientists, there was a new communications system called Digital Wave Modulation, which Johnson was promoting heavily from 1995-96.
A complaint by the SEC detailed that Johnson was behind the publication of eight separate news releases about Digital Wave Modulation disseminated 55 times and that he conducted a national news conference in Orem as well.
The news releases claimed, among other things, that the machine could transmit 1.8 billion bytes of information per second and network with up to 1,000 computers at a time, according to the SEC filing in federal court in Salt Lake City.
During the 12-month period the news releases were going out, the SEC noted that stock of International Automated Systems rose from $3.50 a share to $40 a share.
The claims of Digital Wave Modulation's abilities were simulated on a computer, and Johnson never "physically" built a machine or an operational prototype, the SEC said.
The federal agency brought a civil action of securities fraud in 1998 against Neldon Johnson and IAUS, a case that was ultimately settled in 2005 with an order issued by Judge Dee Benson.
Johnson was allowed to settle the case with the SEC absent an admission of guilt. A payment of $1.3 million in profits gained from the alleged activity and $1.2 million in interest, which Johnson was ordered to pay to the court, was waived because of Johnson's sworn statement of his financial assets, according to the judgment. The court documents don't specify his "financial condition."
Karen Martinez, an attorney on the case and now the regional director of the SEC for Utah, said an injunction was issued against Johnson warning him not to engage in any activity that would violate the anti-fraud section of federal law dealing with securities or engage in an act or practice that would "operate as fraud or deceit upon a person."
Martinez said she could neither confirm nor deny if the SEC had taken up any probe of IAUS in connection with the solar pronouncements, which have come steadily throughout the years even as the SEC digital case was unfolding in federal court.
A Millard County official, however, told the Deseret News that an IRS criminal investigator has recently been to the county offices inquiring about the Hinckley project.
IAUS shares continue to be publicly traded as a "pinksheet" penny stock at 25 cents a share — an amount that has only deviated slightly in the past year of trading. Penny stocks are not regulated by the state securities division but do fall under the purview of the SEC.
RaPower3 stresses on its website that people who become members of the company and purchase its solar technology are not buying a security, but instead make their money through lease agreements and tax credits generated from the solar equipment.
Members are said to receive a "placed in service" letter by February if they purchase by the end of this year and earn money based on new members they bring in. On its Facebook page in 2011, RaPower3 referenced the Millard County towers, saying people can "buy one of these," by Jan. 31 and qualify for a $6,000 "bonus." The company has a B+ rating by the Better Business Bureau, which has received no complaints against the company and describes it as a "multi-level selling company."
It remains to be seen what Johnson's Millard County project will do, but Smith and other county officials would like to know how to answer inquiries, and when Johnson will submit the proper paperwork.
Smith said it has become frustrating.
"When I asked him personally what was going on a couple of years ago, he was told he needed to come in and get a permit to be compliant. He said he would and he never has," Smith said.
Email: firstname.lastname@example.org, Twitter: amyjoi16
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