The environmental and economic potential of solar power is enticing to many people in Florida and across the country. However, some unscrupulous companies may launch fraudulent solar projects to garner green investment funds while company founders allegedly run off with the proceeds. In one case, investors are suing major law firms for legal malpractice in the aftermath of what authorities described as a Ponzi-style scheme operating as a solar panel manufacturing company.
The plaintiffs in the case, including GEICO and Progressive insurance companies, say that they invested in DC Solar due to the advice of major law firms, including Nixon Peabody, Foley Lardner and Bryan Cave. They say that the firms recommended that they invest in the company because it would provide tax savings as a solar energy investment and had a strong potential upside due to market demand. They say that they relied on the firms’ opinions to invest hundreds of millions of dollars. The investors are also suing financial advisors and others involved in the deal.
In 2019, the FBI announced the alleged Ponzi scheme at DC Solar. They said that investments were used to fund the founders’ private, luxurious lifestyles rather than developing and marketing solar panels. In addition, they said that newer investors’ funds went to pay dividends to older investors, rather than establishing any value in the company. After the exposure, the company filed for bankruptcy in February, leaving the insurers’ investments largely worthless.
The companies say that they lost substantial sums by relying on the firms’ legal opinions that the investments were real, but that the lawyers should have known that the transactions were a sham. People and businesses that lose money due to information from their lawyers may consult with an attorney about whether legal malpractice was a factor in their case and pursue compensation if so.