There was a lot of wind behind their turbines, but not in a good way. Their claims were false and the men were siphoning off investor funds to themselves, authorities allege.
Author of the article: Adrian Humphreys
Publishing date: Jul 17, 2020
Last Updated 3 months ago
4 minute read
Two Canadians claiming to have developed unprecedented utility-grade wind farm turbines told investors their technology was so hot their company could be the next Google, Amazon or Facebook.
There was a lot of wind behind their turbines, but not in a good way. Their claims were false and the men, including the company’s Toronto-area president, were siphoning off investor funds to enrich themselves, U.S. authorities allege.
The snappy slogan of Thunderbird Power is: “For us, Power is a Breeze.”
Such conceit is easy if, as U.S. federal authorities allege, there is no need to have a successful product before making out-sized claims and selling investments in it.
One Thunderbird promotional video shows a piece of a metal fan being examined in a fabricating workshop.
“I think they look incredible. Like, my instinct says that it just works super awesome,” a voice says as the fan is fawned over.
Not to say there aren’t innovative ideas in the plans, but a wary observer might ask why there is only a single fan in a large factory that is building other things. Or why so many involved in examining the turbine are wearing dark sunglasses in an indoor factory. Or why such qualifying words like “my instinct says” are included in a sales pitch.
The U.S. Securities and Exchange Commission asked a lot of questions too, and, as an answer, filed charges against Thunderbird Power Corp., an Arizona-based company, and three officials for allegedly defrauding investors.
Thunderbird’s president, Anthony Goldstein, of Pickering, just east of Toronto, and John Alexander van Arem, 62, who goes by the first name “Lex” and lives in Toronto, listed as a consultant, were charged together with Thunderbird’s CEO, Richard Hinds, 67, of Arizona.
There was no basis in fact for Thunderbird and its officers to make any claims
Goldstein’s age is not given in the SEC’s documents filed in court.
His LinkedIn page says he attended York University from 1987 to 1991 in an undergraduate Political Science degree program after graduating high school in Toronto at Forest Hill Collegiate Institute. He has been president of Thunderbird since May 2015, it says.
The three men “orchestrated” a fraud through bogus claims and misleading statements in investment packages, press releases and promotional materials, the SEC alleged.
Thunderbird claimed to have developed the world’s most energy-efficient power generating technology, a special wind turbine called “the PowerStack.”
The scientist who thought up the PowerStack idea previously worked with Goldstein and van Arem at another company and introduced them to Hinds, court documents say.
The two Canadians then retained, supervised and paid a nationwide network of sales agents to email and cold-call prospective investors using false claims to elicit investments, the SEC alleged.
They pushed an enticing but false narrative of the company’s technology, success and financial potential, authorities said.
They boasted that, like with early investors in tech giants Amazon, Google and Facebook, who made enormous profit, investing in Thunderbird had a “virtually limitless potential.”
Among the claims the SEC said are false or misleading is that Siemens, a huge, internationally known engineering company, had “confirmed that the PowerStack extracts more kinetic energy from wind than any other wind turbine technology on the market.”
A press release issued in 2018 boasts that Siemans confirmed “the PowerStack Wind turbine is the most efficient and cost efficient wind turbine technology on the market and will produce electricity at a tiny fraction of the cost of any other method, renewable or fossil.”
A year before, a press released claimed it was “the world’s most economical means of generating utility-grade electricity.”
Press releases, YouTube videos, a company web site, Facebook and LinkedIn posts all pumped bogus claims, the SEC alleged.
Siemens, in fact, had not laid eyes on a PowerStack turbine let alone tested one; the company only did number crunching of conceptual data Thunderbird gave it, according to the SEC.
There wasn’t even a turbine to test at the time, as the press releases were issued before work to build a turbine had even begun.
“Without even a prototype wind turbine constructed, and without any physical testing on an actual product, there was no basis in fact for Thunderbird and its officers to make any claims about the operation, production cost and efficiency of any wind turbine,” the SEC documents say.
By October 2018, the company had raised almost US$2 million from at least 60 investors.
About a third of investors’ money was used to pay commissions to Goldstein, van Arem, and a large network of sales agents; van Arem was to receive 50 per cent of proceeds for his services, the complaint says.
According to the complaint, Hinds, Goldstein, and van Arem misappropriated nearly US$850,000 — more than 40 per cent of investor funds — to enrich themselves and pay the sales agents to seek out more unsuspecting investors.
The investment activity spanned at least from August 2016 through to October 2018, the SEC said.
A message left at Thunderbird’s phone number, on which a recorded message said calls were returned within one hour during the business day, was not returned prior to publication. An email to the company’s email address was returned as undeliverable.
The SEC’s complaint, filed in federal court in the Southern District of Florida, charges Thunderbird, Hinds and Goldstein under the Securities Act rather than criminally.
The SEC seeks the return of “ill-gotten gains,” with interest, and the payment of unspecified civil penalties.
The SEC also wants Hinds and Goldstein banned from being an officer or director of any public company and all three, including van Arem, banned from participating in future offering of penny stock.
The allegations have not been proven in court.