A former Danville business owner facing federal grant fraud charges said he's confident he will be cleared of any wrongdoing.
A former Danville business owner facing federal grant fraud charges said Thursday he's confident he will be cleared of any wrongdoing.
"This story is a lot bigger than what you're hearing right now," said Joseph S. "Joe" Kozicki, the owner and chief executive officer of AA Solar Inc. "When the whole story comes out, it will be proven that I never took any money for my personal benefit."
The 78-year-old Choctaw, Okla., man was indicted by a federal grand jury in U.S. District Court in Springfield on Thursday.
According to the indictment, Kozicki applied for and received a $1.77 million-plus grant from the U.S. Department of Energy in March 2010. The grant was to purchase and install equipment for a manufacturing facility at 1303 E. Voorhees St., Danville, to make solar tracking systems.
The indictment alleges the company submitted false documents to the Department of Commerce and Economic Opportunity; submitted the same invoice on multiple occasions to the state; used some of the money for Kozicki's personal benefit; and attempted to hide the scheme from authorities.
It also alleges the company failed to provide the required cash match of $1.98 million-plus; failed to establish a production line and sold very few systems, despite receiving more than $1.5 million in grant money; and failed to pay vendors when it received grant money.
If convicted, Kozicki faces up to 10 years in prison in federal prison and up to $1 million in fines.
The day after the indictment was handed down, Kozicki called The News-Gazette to explain his side of the story. He said he knew he was being investigated back in 2012 but was caught off-guard by the charges, and he was afraid people would automatically think he was guilty.
He described himself as a longtime businessman who worked primarily in Chicago and California. From 1980 to 2008, he said, he owned the Professional Building Management Co. in Chicago, which leased a building on the west side to the city of Chicago and another to the state of Illinois.
"I thought that was my retirement," Kozicki said.
He claimed that around 2008 when the recession hit, Chicago broke its lease with him, the state didn't pay rent for a year and without the annual income of about $200,000, he couldn't pay the mortgages. Around that time, he said, the federal government closed his bank, and the bank that took over foreclosed on the properties.
Kozicki, who had been living in California for several years, applied for the Department of Energy grant in 2009. After he lost his buildings in Chicago, he said, he tried to find private investors to put up the matching funds.
He said a Texas firm agreed to invest $2.5 million, then backed out. Then, he claimed, he gave $10,000 to a New York investor, but he was convicted of fraud and sentenced to prison.
"From Day 1, the state knew we didn't have any money on our end, but they continued to fund me," Kozicki said, adding he moved forward with his plans.
After looking at several Midwestern sites for his manufacturing facility, Kozicki said, he found a "nice, reasonably priced" building in Danville "by accident," and then an investor to buy it. He said he brought in engineers from California and Utah, hired welders and office workers locally and operated the business from 2010 to early this year.
"We bought a lot of equipment, and we did a lot of research and development, and we've come up with some of the best solutions in solar that there is today," he said. He said some of the creations are on the company's website, aasolartracking.com, which describes basic roof-mounted and mobile solar tracking systems.
Kozicki admitted he knew he was supposed to use the grant for equipment purchase and installation. But when money became tight, he admitted, he used some for personnel and overhead expenses.
"It was either close the company or pay salaries and overhead," he said. "We weren't stealing anything. Nothing was done to harm anyone. It was done to keep people employed. It was always the intent to pay it back."
Kozicki said he doesn't understand the basis of the allegation that vendors weren't paid.
"Some of the vendors weren't paid on time. Every vendor has been paid in full," he said. Then he backtracked and said he still owes two or three vendors a total of about $20,000.
But he vehemently denied using the grant for personal expenses.
"If I used the money personally, my house in California wouldn't have been foreclosed on," said Kozicki, who claimed it was worth more than $2 million.
Kozicki also said the company was evicted from the Danville location. Now he's trying to move the business to Oklahoma City.
Kozicki said he couldn't speak further about the allegations until he had talked to his attorney.