The convicted developer was also under investigation for claiming state solar energy tax credits for work that was not always done, sources say.
French’s company applied for more than $440,000 in rebates for solar power systems on several of his properties but canceled the applications just after FBI and IRS agents raided his Shockoe Slip office, government records show.
Sources familiar with the situation say that, in most cases, French wasn’t installing the panels but was claiming the systems were installed to receive a 20 percent state rebate.
In all, French sought rebates for 20 projects. A search of city permit records show no electrical building permits were filed for 15 of the projects. One project had a permit for a solar installation, but it was killed without the work being completed. The four remaining projects, located on a set of duplexes on Q Street in Church Hill, were recorded as completed. However, the rebates sought by French for those projects were twice what they should have been, according to the cost of work reported on the permit.
Bernie Stanley, president and founder of Shockoe Solar, said he was approached by state and federal authorities and asked to assist them in investigating French’s suspected misuse of solar incentives.
“They caught wind of the fact that Justin French was taking solar panels and putting them on a roof of a building to take pictures and submit them as evidence that he completed the job,” Stanley said.
Stanley said that he was asked to call French from FBI headquarters in Richmond to see whether he needed help completing any solar installations. If they could get French on the record saying he wasn’t interested, it would be further proof that he had no intention of completing the projects and would make for a stronger case. Claiming he didn’t have the resources to finish the projects would not be a defense, because he had already applied for credits on work that should have been completed.
But Stanley said French didn’t answer and did not call back.
A week later, FBI agents raided French’s office, and he soon after pulled his rebate applications. He was later arrested and charged with fraud related to his abuse of the state and federal historic tax credit programs.
Earlier this month, French was sent to federal prison in West Virginia to serve a 16-year sentence.
An FBI media representative declined to comment, as did French’s lawyer in reference to anything about the solar program. The supervisor for the state solar rebate program did not return several calls seeking comment.
French was not charged with any crimes relating to the state solar rebate program. It is possible that French planned to finish the projects but got sidetracked by the investigations.
The cost of installing solar electric systems is considered a qualified expense for the purpose of receiving historic tax credits as well. French pleaded guilty to inflating costs on construction projects, so it’s possible he also was using solar as a way to further inflate his historic tax credits.
Stanley said he was recently hired by an electrical company to inspect a solar system that wasn’t working. When he arrived, he realized that the building at1707 Summit Ave. was one of the projects that French had used to apply for a solar credit.
Stanley said he went on the roof and found rows of solar panels neatly arranged but not connected to anything.
“They were just lying on the roof so that they looked cool and someone could take a picture of them,” Stanley said.
Later Stanley found inverters and racking equipment in the basement, which could have been used to complete the system.
Stanley said he is working on getting the system up and running.
Although French didn’t reap any rebates from the solar program, his plan to do so wasn’t without victims.
In July 2009, French bought half of Cityspace Solar, a local solar contracting firm started by Blue Crump. That partnership only lasted about eight months, with Crump severing ties with French and going on to start a new company called Urban Grid Solar.
Crump said it wasn’t long after they went into business together when he started to have second thoughts.
“I quickly had feelings of regret as I started to view more and more of his business practices,” Crump said.
Crump said French would delay payment to contractors and subcontractors and sometimes not pay them at all. At the same time, he was aggressively trying to assume ownership in Crump’s other company, Cityspace Construction.
Crump said that as he became more familiar with French’s projects, he came to question how they were economically feasible. That prompted Crump to conduct his own investigation, which including pulling Department of Historic Resources records and hiring a private investigator. Crump also said he came across invoices that had his construction company’s letterhead on them stating amounts higher than what he had submitted to French.
That was enough for Crump to walk away from the company he started and to try to start again from scratch. Crump said that French threatened him with a non-compete agreement. When Crump fired back with court records from French’s 1994 gun-dealing conviction that the investigator dug up, Crump said that French backed down.
“And that was the last time I ever heard from him,” Crump said.
That was about four months before French was arrested. Crump said he had been contacted by and cooperated with investigators who asked questions about French’s business dealings.
Looking back, Crump said he felt like French targeted him to use as a pawn in a plot to take advantage of solar energy rebates.
“He courted us,” Crump said. “I think Justin identified solar as an opportunity to replicate manipulation of a system that he had somewhat perfected with historic tax credits.”