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Source: US State of California

         SANTA ANA, California – Federal prosecutors today filed criminal charges against an Irvine man whose company used high-pressure sales tactics to raise more than $9.5 million with bogus claims that the outfit’s solar panels utilized nanotechnology to generate electricity three times more efficiently than traditional solar panels.

         Michael James Sweaney, 56, the founder and owner of Nanotech Engineering, Inc., was charged with one count of mail fraud in a criminal information filed in United States District Court. In a plea agreement also filed today, Sweaney, who held the title of chief financial officer at Nanotech, agreed to plead guilty to the mail fraud charge.

         Nanotech, which had facilities in Irvine and Loveland, Colorado, used a team of salespeople to cold-call potential investors and pitch them with bogus claims the company had developed a compact “Nanopanel” with patent-pending nanotechnology that was one-third the cost of similar devices and would soon dominate the solar panel market. But, as Sweaney admitted in the plea agreement, the Nanopanel simply did not exist.

         As part of the scheme that started just over three years ago and continued until the end of 2019, Nanotech and its salesforce not only lied to investors, it also failed to disclose pertinent facts, which included identifying the CFO as “Michael Hatton” to conceal that Sweaney had previously been convicted of securities fraud, court documents state.

         In his plea agreement, Sweaney admitted that, using the “Michael Hatton alias,” he personally solicited a potential investor with lies, including that Nanotech did not pay commissions to sales personnel and that the company’s manufacturing equipment was worth $100 million. That potential investor was actually an undercover FBI agent.

         During the scheme, Sweaney instructed his nephew – who was in charge of Nanotech’s Colorado facility – to create a prop to make it appear that there were functioning Nanopanels, to make a video with a hired actor showing the product outperforming a traditional solar panel, and to make it appear the Loveland facility was manufacturing Nanopanels, the court documents state. In a 2018 email to his nephew, Sweaney wrote, “We need to spend ALOT OF CASH, we need IMMEDIATELY equipment in the warehouse, without it JAIL, and that’s no joke, no equipment and using investment funds EQUALS JAIL, however spending money on equipment WILL SET US FREE.”

         Once he enters the guilty plea in this case, Sweaney will face a statutory maximum sentence of 20 years in federal prison.

         Sweaney admitted in his plea agreement that investor funds – which purportedly would be spent on company overhead and the manufacturing of Nanopanels – were used to fund his lavish lifestyle, which included a 46-foot yacht, two Maserati GranTurismo automobiles, a gold Cartier watch and cosmetic surgery. As part of the plea agreement, Sweaney agreed to forfeit the yacht, the cars, the watch and approximately $1.5 million in cash, bank accounts and checks previous seized by investigators.

         Sweaney’s nephew – David Wayne Sweaney, 41, of Fort Collins, Colorado, who was listed on documents as Nanotech’s chief executive officer – pleaded guilty last month to one count of mail fraud. He is scheduled to be sentenced by United States District Judge Josephine L. Staton on April 2, 2021, at which time he will face a statutory maximum sentence of 20 years in prison.

         According to court documents, David Sweaney assisted in the scheme orchestrated by his uncle in a number of ways, including depositing victims’ checks into Nanotech bank accounts in Colorado, purchasing and installing $300,000 in used solar panel manufacturing equipment, arranging for at least two potential victim-investors to tour Nanotech’s Colorado facility, and creating a video showing a prop Nanopanel outperforming a standard solar panel – an illusion he created by powering the purported Nanopanel with a hidden battery pack.

         These cases are the result an ongoing investigation by the FBI.

         This case is being prosecuted by Special Assistant United States Attorney Ryan G. Adams of the Santa Ana Branch Office.

         The United States Securities and Exchange Commission has filed a civil action against Nanotech and the Sweaneys, and the agency announced three weeks ago it obtained a partial judgment against David Sweaney.

MIL OSI USA News