Holtec paying $5 million fine, but ducks charges in NJ probe of tax incentives

New Jersey-based energy company Holtec International will pay a $5 million fine while avoiding criminal prosecution for what authorities describe as a scheme to cheat a state tax incentive program.

The case stems from an application by Holtec in 2018 to the Angel Investor Tax Break Program, which awards credits to companies that invest in emerging technology as an incentive to create more technology business and jobs in the state.

It’s a much smaller program than one that awarded Holtec $260 million in 2014 for building a manufacturing plant in Camden, the second-largest tax break in New Jersey history.

Holtec is one of 13 Camden companies connected to South Jersey Democratic power broker George Norcross that received large tax breaks during then-Gov. Chris Christie’s administration and were later investigated by a task force commissioned by Gov. Phil Murphy. In 2019, WNYC and ProPublica reported that $1.1 billion worth of tax breaks went to companies tied to Norcross and his brother. Norcross, who had a close working relationship with Christie, is a member of Holtec’s board of directors.

An agreement announced by New Jersey Attorney General Matthew Platkin on Tuesday addresses a far more limited $1 million in combined tax incentives, which Holtec will now forgo. The company must also have an independent reviewer vet any future applications for state benefits.

In exchange for that and the $5 million penalty, Platkin’s office said it won’t prosecute Holtec over the $1 million in incentives. But the agreement leaves open the possibility of pursuing action against the company for other matters.

The attorney general’s office said Holtec agreed to invest $12 million in Eos, a battery-systems company, in July 2018, and then learned about the Angel Investor Tax Break Program that could net it up to $500,000 for investing in emerging energy technologies.

Platkin said Holtec and a real estate company owned by its CEO, Kris Singh, then fraudulently filed for two $500,000 tax breaks, even though the real estate company had no role in the Eos investment to that point. By claiming each of the companies invested $6 million individually, Holtec sought to double their combined tax credit, according to the attorney general’s office.

“These agreements reinforce our commitment to protecting New Jersey’s taxpayers and ensuring fairness and integrity in our economic system by preventing companies from defrauding the state’s tax incentive programs,” Platkin said. “Today, we are sending a clear message: no matter how big and powerful you are, if you lie to the state for financial gain, we will hold you accountable — period.”

Holtec said it signed the agreement “under threat of unfounded retaliatory criminal prosecution” and that it has not admitted to any wrongdoing.

“Holtec denies engaging in any misconduct,” the company said in a written statement on Tuesday. “Instead, the current settlement contemplates a payment less than the estimated cost of litigating the matter with the State while proactively resolving any threat of criminal proceedings.”

Holtec manufactures nuclear power equipment and holds contracts around the country to decommission nuclear power plants.

Years of scrutiny from the state

Holtec has been a key target in the Murphy administration’s ongoing efforts to rein in and investigate tax breaks instituted during the Christie years.

Holtec received the $260 million tax break to move its headquarters to Camden in 2014 under a program run by the state Economic Development Authority. WNYC and ProPublica reported in 2019 that the tax break included a false answer in a sworn certification letter signed by Singh. Shortly afterward, the state froze the tax break, citing the false answer — but Holtec took the state to court and won, convincing a judge that the answer on the form did not change enough of Holtec’s qualifications for the tax break.

The company became a lightning rod for local opposition in Camden to the tax break program. Community activists opposed the state strategy that handed out large tax breaks for companies that moved to the city but didn’t necessarily hire local residents. A report in early 2023 showed that about half of those companies had hired fewer than a dozen residents. Holtec hired more residents than most of the companies, employing 37 Camden residents out of its 1,623 employees.

In 2019, Murphy appointed a task force to investigate the tax break program. That investigation found many companies that received tax credits from throughout the state had falsely threatened to leave New Jersey to obtain the tax credit. The task force recommended a criminal investigation, and the state froze $578 million worth of tax breaks while the investigation was underway. Holtec’s tax break was released after the company took legal action.

Platkin’s agreement not to prosecute Holtec over the Angel Investment Tax Break Program is the first time authorities have acknowledged pursuing a criminal case.