Associate testifies in wind-farm case | Contractor tells how he tricked investors | By Ron Wood | Arkansas Democrat-Gazette | August 31, 2021 | www.arkansasonline.com
FAYETTEVILLE – An associate of two men charged with fraud involving a failed wind farm at Elm Springs said he lied to a friend to get an investment in Dragonfly International then split the proceeds with the company’s CEO.
Cody Fell testified he got an investor to cut a cashier’s check to Dragonfly for $13,930 in January 2016 by telling him the money was needed to pay engineers, then split the take with Jody Davis. Davis, CEO of Dragonfly, endorsed and cashed the check, then handed Fell a check for $8,000, which Fell used to forestall repossession of a pickup he’d bought for his son. Fell said he also later got some cash from Davis.
Davis, who is married to Fell’s sister, got part of the remaining balance with Fell.
Davis and Phillip Vincent Ridings are accused of scamming investors in a proposed wind farm project at Elm Springs, Arkansas One.
They are charged with multiple counts of wire fraud, aiding and abetting wire fraud, money laundering and aiding and abetting money laundering.
Both men have entered not guilty pleas.
Fell, of Springdale, was a contractor and principal in the firm, who pleaded guilty to federal wire fraud and tax evasion charges in December 2018. Fell agreed to cooperate with the government and hasn’t been sentenced.
“I didn’t do anything without calling Jody Davis first on Dragonfly,” Fell said.
Fell said he moved to Northwest Arkansas from Oklahoma at Davis’ urging for a construction role in the company. He ended up persuading a friend, Brandon Smith, a residential development contractor from Fayetteville, to guarantee payment on a $2 million loan to buy property at Elm Springs that was to have been part of the site of the wind farm. Smith was left on the hook for the loan and the land eventually went back to the bank.
Asked why Davis and Ridings didn’t buy the land, Fell said, “I knew they didn’t have no money.”
Fell said he enticed another investor to put in $300,000 to pay engineers and was forwarded about $94,000 of that money by Davis.
Fell said he also got drawings on the Internet and misrepresented them to an investor as being drawings done by engineers for Dragonfly. He also downloaded a wind study online and passed it off to several people as being Dragonfly’s. Another time, Fell said, he had a sign printed and put it on the Elm Springs property to make it appear work was being done on the site.
Ridings said during cross-examination Fell was no longer with Dragonfly after March of 2015.
Davis and Ridings scammed six investors in Northwest Arkansas and southwest Missouri, according to an indictment. The investors are identified only by their initials. They lost amounts ranging from $13,000 to $300,000, the indictment claims.
Patty Campbell, with Belcan engineers, said Monday the company was contacted to analyze a wind turbine design in 2014 and developed a proposal for the work in early 2015. The work was estimated to cost $574,900, with 10% up front.
Six months later, Belcan got a check for $58,000 and did an initial analysis. Belcan determined it wouldn’t work, telling Davis and Ridings in a status report in late 2015 the turbine wasn’t feasible because it was about 10 times too small to make the amount of power they wanted.
“Analysis won’t change the fact you’re an order of magnitude off,” Campbell said.
Campbell said the data Belcan used was provided by Ridings.
Belcan engineers estimated the turbine would have to be 151 feet in diameter at the inlet to make 1 megawatt of power in a 33.5 mph wind. The design called for the turbine to be 25 feet in diameter.
Jason Bivens, also with Belcan, estimated the Dragonfly design might produce 20 to 50 kilowatts. Bivens said they discussed augmenting the power to the turbine and determined it would require adding about 950,000 watts of power to make the turbine itself produce 1 megawatt.
In one status report, Belcan’s chief engineer said he concurred with the findings the Dragonfly wind turbine didn’t look feasible.
Belcan outlined options to Dragonfly and recommended reducing the power target and scaling up the design.
Belcan considered the project on hold and did no more work on it after Sept. 30, 2015, Campbell said. They also returned $15,776 to Dragonfly that was unused.
According to testimony, investors in Dragonfly were told repeatedly Belcan was on the verge of validating the technology and was building a prototype turbine for Dragonfly.
Dragonfly sought to rezone 312 acres in Elm Springs in late 2015.
[rest of article available at source]
URL to article: https://www.wind-watch.org/news/2021/08/31/witness-in-wind-farm-fraud-trial-says-he-split-investors-money-with-defendant/