SolarCity, which is now owned by Tesla, will pay $29.5 million to settle allegations that it tried to cheat the government (TSLA)

The Justice Department has been investigating SolarCity since 2012, claiming it overstated the costs of its installations in order to receive inflated grant payments.
SolarCity denies the claims and will pay $29.5 million in a settlement, which is not an admission of guilt.
SolarCity was acquired by Tesla in November 2016, but the alleged conduct occurred before the merger.

SolarCity, a company Tesla acquired in Nov. 2016, has agreed to pay $29.5 million to resolve allegations that it lied to the government by submitting inflated claims to cash in on a solar stimulus program, the Department of Justice announced Friday.

The settlement, which is not an admission of guilt, is a SolarCity obligation, a company representative told Business Insider.

The investigation centered on a program — Section 1603 — set up under the Obama administration that was meant to encourage solar adoption by subsidizing installation costs. The program allowed solar companies to receive a federal grant that was equal to 30% of the cost to install or acquire solar systems.

The Justice Department alleges that SolarCity made thousands of claims that overstated the costs of its installations, allowing it to receive inflated grant payments. It has been probing SolarCity and several other solar companies since 2012.

"This program expired, but this settlement demonstrates that the government will still hold accountable those who sought to take improper advantage of government programs at the expense of American taxpayers," Chad Readler, the acting assistant attorney of the Justice Department's Civil Division, wrote in a press statement.

A SolarCity spokesperson denied the claims, stating that the company was entitled to the full amounts approved by the US Treasury.

"SolarCity took its responsibilities under the program very seriously, and far from trying to overstate the value of those projects, it went to great lengths to determine accurate values," A SolarCity representative said in a statement. "Independent appraisers, accountants, and investors gave those projects a total value of approximately $1.8 billion."

SolarCity had countersued the US government, claiming it was owed money for installing solar systems that qualified for the grants. Those charges were dropped as part of the settlement.

"As SolarCity has said all along, its projects were valued correctly, and the methods used to value its projects were sound," the SolarCity representative said.

Tesla acquired SolarCity after the alleged conduct occurred, the Justice Department said. The automaker acquired SolarCity in a deal worth $2.1 billion and has been selling a new solar roof product as part of the merger.

SolarCity, which is now owned by Tesla, will pay $29.5 million to settle allegations that it tried to cheat the government (TSLA)

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