GreenTech Automotive Under Investigation by SEC and Senate Committee

Investors looking to score on the next Tesla Motors should start slapping themselves back to reality. Most startup electric automakers are either dead or barely standing, fettered with poor management, little cash, and exaggerated promises. This year alone, Coda, VPG, and Fisker—for all intents and purposes—shut down, following earlier bankruptcies from Aptera, Azure Dynamics, and Norwegian automaker Think. Next up, according to our battery-powered crystal ball: GreenTech Automotive, a Virginia-based builder of low-speed electric vehicles.

Like Coda and new startup Detroit Electric, GreenTech’s business relies almost entirely on Chinese investors and incentives from state governments. But the company’s tiny MyCar, designed by Giorgetto Giugiaro for Chinese automaker EuAuto and manufactured in Horn Lake, Mississippi, isn’t a real car. It’s a “neighborhood electric vehicle” restricted to 35 mph and banned from highways. Base cars start at $15,000 with lead-acid batteries, while upper trims use lithium-ion packs that GreenTech claims will deliver up to 115 miles per charge. Former chairman Terry McAuliffe said GreenTech would build 10,000 cars by the end of 2013, although only a small fraction have been finished by its several dozen plant employees. The company hasn’t released sales or production figures, and GreenTech representatives did not return requests for comment.

GreenTech announced it would add this sedan to its lineup with production slated to begin later this year.

But GreenTech’s true salvation is a retrofitted electric sedan built by JAC, a Chinese automaker best known for cloning the Ford F-150, that will be assembled in a new Mississippi factory later this year. It sounds remarkably similar to BG Automotive, a defunct Philadelphia automaker that tried selling shoddy Chinese NEVs while boasting plans for a second, full-speed EV sedan it promised would deliver a 200-mile range and hundreds of new American jobs. To say “dead on arrival” would have been too kind.

GreenTech’s problems are far more serious, however. It’s under investigation for visa fraud by the Securities and Exchange Commission and by the Senate Committee on Homeland Security and Governmental Affairs for allegedly conspiring with immigration officials. According to recent emails released by the Senate Committee, GreenTech “absolutely received preferential treatment” by the Department of Homeland Security for the nation’s controversial EB-5 visa program, in which wealthy foreigners who invest at least $500,000 in high unemployment areas can be fast-tracked into the country. GreenTech allegedly promised returns for 21 foreign investors—an act illegal in itself—while immigration officials placed a “fraud or national security hold” on “all 21” applications, according to the documents.

McAuliffe, a Virginia gubernatorial candidate who ran Hillary Clinton’s 2008 presidential campaign and chaired the Democratic National Committee, has been silent since resigning from GreenTech in December. He’s tied to GreenTech’s visa investment firm, Gulf Coast Funds Management, which had its bank statements subpoenaed by the SEC in May. That company is run by Hillary Clinton’s brother, Anthony Rodham. Rick Wade, who previously served as a top advisor for President Barack Obama’s 2008 campaign and as a senior aide in the Commerce Department, is GreenTech’s senior vice president.

McAuliffe, who kept his resignation secret until April when GreenTech sued a nonprofit journalism group for publishing reports of potential visa fraud, won’t say what happened. His campaign did not respond to calls and emails. This year, two other visa firms in Chicago and McAllen, Texas, were accused of defrauding foreign investors and running Ponzi schemes. Legal experts say the visa program, now in its 23rd year, goes mostly unchecked.

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So, apparently, does GreenTech’s marketing team, whose pitches to prospective dealers sound lost in translation.

“Going green is right in many ways. Link to the future of transportation, for combustion engines will give way as the horse and buggy did a hundred years ago,” its website says.

The future is indeed coming. Companies like GreenTech just won’t be part of it.

Source: CarAndDriver