Attorney General James Holds ‘Green’ Inventor Accountable, Ends Use of Investor Funds for Personal Expenses
Self-Professed Developer of “Revolutionary” Wind Turbine Will Step Down from Board,
Release Patent Rights and Voting Control, and Pay Back $300,000 to Company
NEW YORK – New York Attorney General Letitia James today delivered a victory for environmentally-conscious “green” investors in Upstate New York by getting a Western New York company and its founder to end the illegal profiting from the sale of unregistered securities, which allowed the founder to subsidize his lifestyle. Attorney General James obtained a consent order and judgment from the Erie County State Supreme Court against Kean Stimm and the company he founded, Kean Wind Turbines, Inc., that forces Stimm to stop serving as an officer or director of the company, orders him to release all patent rights to the company, suspends his voting control of the company, and orders him to repay $300,000 in restitution and damages for money that he diverted for personal use.
“This scheme deliberately targeted environmentally-conscious investors and preyed upon their desire to do good,” said Attorney General James. “Western New Yorkers who wanted to invest in a socially-conscious cause and help combat climate change instead were duped into subsidizing Stimm’s lifestyle. What’s worse is that even after COVID-19 began to spread rapidly across New York State and the nation, Stimm continued to solicit Western New Yorkers’ dwindling funds and take advantage of their good nature. This agreement will ensure Kean Stimm surrenders all rights to the patent he was marketing and suspends his voting control of the company, so that investors can continue to invest towards a working wind turbine, while simultaneously forcing Stimm to return $300,000 to the company.”
As stated in the complaint, Stimm raised millions from 435 investors in Western New York through years of illegal sales and false and misleading statements. The company was supposedly engaged in developing a wind turbine called “the Newtonian Wind Turbine,” meant to generate electricity. But, while Stimm had assured investors that production was planned for “later this year” (each year since 2013), the turbine has never gone into production. Among the other false and misleading statements alleged against Stimm were that he assured investors that their money had “[v]irtually zero risk with an incredible potential yearly return for 17 years” and that his never-produced invention would be 50 to 100 times more efficient than existing wind turbines. To date, investors have not received any returns on their investments. Instead, Stimm used investor funds to pay for his personal expenses, including the payment of a penthouse apartment, a personal assistant and other living expenses, a piano, a cruise vacation, among other items.
Today’s order permanently bars Stimm from participating in Kean Wind’s management, prohibits Stimm from selling any securities in New York State, blocks Stimm from continuing to use the company’s assets to pay for his own living expenses, and directs Stimm to pay back $300,000 in restitution and damages. Further, the order requires Kean Wind to call a shareholder meeting within 90 days to choose a new board of directors that will, in turn, appoint new officers. The company has also been enjoined from committing any further violations of the law in connection with raising funds from investors.
This matter was handled by Assistant Attorney General Christopher L. Boyd, Senior Consumer Fraud Representative Karen Davis, and Supervising Investigator Ken Peters, under Deputy Chief Investigator Jonathan Wood — all of the Buffalo Regional Office, under the supervision of Assistant Attorney General-in-Charge of the Buffalo Regional Office Michael Russo; and Assistant Attorney General Tanya Trakht of the Investor Protection Bureau (IPB) with assistance from Legal Assistant Renata Bodner — under the supervision of IPB Deputy Bureau Chief Kevin Wallace and IPB Bureau Chief Peter Pope; and Investigator Brian Metz — under the supervision of Supervising Investigator Michael Leahy and Deputy Chief John McManus. The Buffalo Regional Office is part of the Division of Regional Affairs, which is led by Deputy Attorney General for Regional Affairs Jill Faber. The Investor Protection Bureau is a bureau of the Division of Economic Justice, which is led by Chief Deputy Attorney General Christopher D'Angelo. The Division of Regional Affairs and the Division of Economic Justice are both overseen by First Deputy Attorney General Jennifer Levy.