Holtec International reaches deferred prosecution agreement to resolve tax-credit dispute

TRENTON – Holtec International and a related firm will pay $5 million in penalties to avoid prosecution for alleged misstatements on tax-credit applications, according to the state Attorney General’s Office.

Camden-based Holtec, which denies any wrongdoing, also must retain a state-approved reviewer to monitor future applications for state benefits during a three-year period.

The agreement follows a “lengthy” investigation into November 2018 applications for tax credits worth a combined $1 million for Holtec and Singh Real Estate Enterprises (SRE), the law enforcement agency said.

The deferred prosecution agreements send “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,” Attorney General Matthew Platkin said in a statement Tuesday.

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Holtec, an energy technology firm, asserted it reached the agreement “under threat of unfounded retaliatory criminal prosecution." It claimed the state was “needlessly punishing a large New Jersey manufacturer.”

Among other ventures, Holtec decommissions former nuclear power plants, including the Oyster Creek complex in Ocean County.

Holtec also said the penalty would cost less than the estimated cost of continued litigation, “while proactively resolving any threat of criminal proceedings.”

Agreement defers prosecution for Holtec

Under the agreement, the state will not prosecute Holtec and SRE in connection with the firms’ applications for tax credits under the Angel Investors program of the state Economic Development Authority.

According to the state, Holtec in July 2018 paid $12 million for a stake in Eos Energy Storage, an Edison, Middlesex County, firm that makes batteries and related products.

It alleged Holtec then learned of the EDA’s Angel Investor program, which provides tax credits for qualified investments in emerging technology companies in New Jersey.

The program awards tax credits worth 10 percent of an applicant’s investment, capped at $500,000.

The state alleged Holtec, seeking to evade the cap, created new documents to indicate it and SRE had each invested $6 million in Eos "as of" July 2018, the date of Holtec’s original investment. That allowed two awards of $500,000 each.

“The documents did not reflect anywhere that they had been created sometime in September or October 2018,” the Attorney General’s Office said.

It also noted 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.”

State: Stock transaction not disclosed

It said the firms did not disclose that Holtec returned 3 million shares to EOS and that those shares were then re-issued to SRE at Holtec’s request.

Holtec said it and SRE “appropriately sought, received and relied upon the advice” of a prominent accounting and tax firm in making the applications. It also said the company’s legal counsel oversaw preparation of the documents.

The agreement noted an email exchange where a Holtec employee suggested to an "outside advisor" that the tax credits' total value could be increased further if the $12 million investment were spread over three purported investors.

The advisor responded in part, "I did not want to be too cute with an exact 5m, 5m, 2m investment but we could if you all want to pursue."

A higher-ranking Holtec executive then joined the email exchange: 'Leave it at 2 investments.'

The EDA relied on information provided by the firms to approve $500,000 tax credits for each applicant. Holtec and SRE will not pursue those credits under the agreement.

“While our dispute was unfortunate, we are pleased to put it behind us and redouble our focus on the important clean energy work of our New Jersey employees,” said Kelly Trice, president of Holtec International Nuclear Generation and Decommissioning.

In its statement, Holtec also noted the state previously lost twice in a court fight over $260 million in tax credits that funded development of the company’s Camden campus. Those credits were provided by the EDA’s Grow New Jersey program.

Holtec alleged the state had threatened prosecution “to finally get a public ‘win.’”

Jim Walsh is a senior reporter for the Courier-Post, Burlington County Times and The Daily Journal. Email: Jwalsh@cpsj.com.

This article originally appeared on Cherry Hill Courier-Post: Holtec International denies wrongdoing in fight over tax credits