By Eric Freedman
A federal judge has sentenced an Illinois man to 15 months behind bars for cheating a U.S. Energy Department grant program and ordered him to repay the government $383,318.
In 2010, Joseph Kozicki was chief executive officer of AA Solar Inc. in Danville, Illinois, when the start-up company received a $1.8 million Green Industry Business Development Grant. The money was earmarked to buy and install equipment for a plant to manufacture solar tracking systems for “ground-based, roof-mounted, and mobile and street light applications,” according to the indictment and a press statement from the U.S. Attorney’s office.
The grant was part of an American Recovery and Reinvestment Act– or Stimulus Act — program intended to boost the economy during the Great Recession.
Kozicki, who pleaded guilty, was the only person charged in the case, said Sharon Paul, a public information officer for the U.S. Attorney’s office. AA Solar is now defunct.
The prosecution said Kozicki told company employees to submit phony invoices, purchase orders and other documents to the Illinois Department of Commerce and Economic Opportunity, which administered the grant program in the state.
For example, AA Solar sometimes collected money from the agency but didn’t use it to pay vendors, while on other occasions it submitted the same invoices for payment more than once. It also billed the program $10,000 for nonexistent engineering services.
The indictment said that during the grant period, the company submitted 13 payment requests for about $1.8 million and got 11 checks totaling $1.5 million.
“However, AA Solar failed to establish a production line to produce solar tracking systems and sold very few,” it said. In addition, the company failed to provide the required cash match of almost $2 million,
The U.S. Attorney’s statement said, “During the scheme, Kozicki made payments or withdrawals from AA Solar’s bank accounts for personal expenses,” and fraudulently obtained $383,318 from the grant. The state agency refused to pay another $265,269 after becoming aware of the scheme.
The prosecution’s sentencing memorandum said that Kozicki “used AA Solar’s bank accounts as his personal checking accounts. According to records of an area casino, over a two-year period, he gambled 250 cumulative hours. His player’s club transactions at three area casinos showed him gambling approximately $137,602 during the relevant time frame.”
It said, “This fraud, as many frauds, appears driven by the defendant’s selfish desires, including his desire to gamble and live in a $3 million personal residence.”
“If not for the defendant’s actions in submitting false documentation to fraudulently obtain this money, this grant could have been used by another recipient to actually invest in a ‘green’ business that would have employed workers and improved our environment.”
Kozicki has filed a notice of appeal but the document did not disclose the basis of his appeal. His lawyer, Assistant Public Defender Elizabeth Pollock, said she cannot discuss the case,
The prosecution had asked for a 30-month prison sentence for Kozicki, who is now 80.
The maximum penalty on the fraud charge is 10 years in prison and a $1 million fine.