Investors in Solar-Energy Farms File Fraud Suit

Eleven Orange County area residents who collectively invested up to $400,000 in corporations operating three solar-energy “farms” in Borrego Springs and Northern California filed a lawsuit Wednesday claiming they were defrauded of their investments.

Each of the investors paid cash deposits of $12,000 to $14,500 and signed promissory notes of about $24,000 after being told the investments would serve as viable tax shelters, said attorney John Bisnar, who filed the lawsuit in Orange County Superior Court.

Named as defendants in the lawsuit are: Tandem Planning Inc. of Santa Ana; United Energy Corp. and Renewable Power Corp., both incorporated in Hawaii but operated out of offices in Foster City, Calif., and the Insurance Company of Santa Cruz Inc.

The lawsuit charges the defendants with fraud, conspiracy and breach of contract.

Principals in the firms could not be reached late Wednesday for comment.

Tax Shelter Plans

Bisnar said plaintiffs in the lawsuit were told their money would be used to purchase Power Module 500DXs, devices which generate electricity that is in turn sold to major power companies.

Most of those who invested in the corporations in October and November of 1984 intended to use the investments as a means of lessening tax liabilities, Bisnar said. Instead, they learned earlier this year that the devices were “never purchased and never installed,” Bisnar said.

“In the beginning, everything seemed to be all right,” Bisnar said. “Perhaps they (corporations) got too successful and got more investors than they could handle. There could be some very honest mistakes here.”

Renewable Power Corp. was named in a civil lawsuit filed on Oct. 31, 1984, by the California Corporations Commission, which alleged violations of state securities laws. The state failed in its attempt to get an injunction to put the corporations out of business and the case has yet to come to trial, he said.

Bisnar said United Energy Corp. and Renewable Power Corp. manufactured and sold the equipment, Tandem acted as sales representatives and the Insurance Co. of Santa Cruz was solicited to insure the investments.

Damages Not Specified

Named in the lawsuit as principals in the corporations were Ernest and Daphine Lampert of Foster City.

The lawsuit does not specify any damages. Bisnar said the investors would be pleased if they could recover their investments and attorney’s fees.

“If Mr. Lampert called tomorrow and said ‘I’ll give them their money back,’ I’d be willing to drop the whole thing,” Bisnar said.