FBI investigating defunct Sun Badger Solar for possible fraud

The FBI is investigating Sun Badger Solar, a now-defunct Waukesha company, for fraud after dozens of customers paid thousands of dollars for solar projects that were never completed.

That’s according to an application for a search warrant and an affidavit supporting the warrant, filed in federal court in December 2023. A spokesperson for the FBI’s Milwaukee office declined to comment earlier this week.

As part of its investigation, the FBI sought employee communications records from California-based Slack Technologies, an electronics communications company. The federal agency received the records in January, according to a document filed last month in the U.S. Eastern District Court of Wisconsin.

Last year, customers in Wisconsin, Minnesota and Illinois were left scrambling when the company stopped solar installations. In March 2023, Sun Badger terminated its LLC license while dozens of clients still had incomplete installation projects and abandoned contracts, according to the affidavit.

Customers lost approximately $1.3 million, the affidavit said, citing a report from the Wisconsin Department of Agriculture, Trade and Consumer Protection, or DATCP.

Since late 2022, Sun Badger has faced a flurry of lawsuits from customers, suppliers and former employees. Last summer, a Waukesha court appointed a receiver to oversee the liquidation of the company’s assets, according to the Milwaukee Journal Sentinel.

The findings of an investigation by the state Department of Workforce Development Equal Rights Division, obtained through an open records request, show Sun Badger owed roughly three-dozen employees $430,363 in unpaid wages.

Since 2022, DATCP has received 148 complaints against the company, a department spokesperson said Tuesday. 

The Dane County Sheriff’s Office opened an investigation into Sun Badger Solar last year, but passed its findings over to DATCP when it learned of the state agency’s investigation, according to a sheriff’s office spokesperson. A DATCP spokesperson said the agency does not comment on investigations.

Affidavit provides timeline of Sun Badger’s financial woes

Sun Badger Solar was founded in 2018 by Trevor Sumner and Kristopher Sipe, and became one of the fastest growing solar companies in the Midwest, the affidavit says.

In 2022, agencies in Wisconsin, Illinois and Minnesota began to notice an increase in consumer complaints about the company. That includes complaints to local law enforcement, the Better Business Bureau and DATCP about Sun Badger taking payment for solar projects without fulfilling contracts, court documents say.

“Sun Badger Solar abandoned solar installation projects, leaving the customers with unfinished work,” the affidavit said. 

As the company struggled to manage existing contracts, it continued signing new contracts — without advising clients of its “ongoing business struggles,” court documents said.

More than 35 clients told law enforcement that they paid a 50 percent cash deposit in exchange for receiving an installed solar system within about four months, the affidavit said.

“To date, those clients have not received a fully installed solar system or financial refund,” the December 2023 document said.

In a 2023 interview with the Minnesota Attorney General’s office, a former sales director for Sun Badger said upper management instructed sales representatives in March 2022 to continue to promise short timelines for solar projects even though those schedules could not be met, according to the affidavit.

In fall 2022, a third party’s financial audit showed Sun Badger Solar was in the midst of a financial crisis, court documents said. Sumner and Sipe were allegedly aware of the findings. 

Sumner told WPR last year that the company’s financial troubles began in December 2022. But a former employee said he saw problems emerging that October.

By December 2022, Sumner sent an email to all employees announcing layoffs, the affidavit said. That month, the company missed a payroll right before the Christmas holiday, a former employee and Sumner told WPR last year.

WPR emailed an account used to contact Sumner last year, but that email bounced back. WPR also left a voicemail with an attorney representing Sumner in circuit court cases in Wisconsin and sent a message to the attorney’s firm, but did not hear back before publication.

The company sent an email to clients in January 2023, notifying them of solar installation delays, citing “market stresses.” Later that month, it issued a furlough notice to employees. By March, its LLC license was terminated.

Why did the FBI seek Slack messages?

In the affidavit, the FBI said there is probable cause to believe that Sun Badger Solar violated federal laws and may have committed mail and wire fraud.

In reviewing investigations from other agencies, the FBI was able to see some Slack messages between officials at the company. The affidavit said the messages demonstrate that employees used Slack to exchange information about payment terms being offered to customers, installation timelines and delays.

In August 2023, the FBI asked Slack to preserve accounts associated with sunbadger.com including those held by officials within the company for the period between January 2021 and August 2023, the affidavit says.

The agency believed evidence of Sun Badger’s “scheme” was contained within the Slack records, court documents said.

“Information retained by Slack, associated with [Sun Badger Solar], will lead to evidence, fruits, and instrumentalities of the aforementioned crimes as well as to the identification of individuals who are engaged in the commission of those and related crimes,” the affidavit said.