Holtec to pay $5M in penalties to settle dispute over Angel Tax Credit application

In the latest and perhaps the last interaction between the state of New Jersey and Holtec International in an ongoing dispute involving state tax incentives, Holtec agreed Tuesday to pay $5 million in penalties and retain an independent reviewer approved by the state to monitor future applications for state benefits.

The agreement follows a lengthy investigation into applications by Holtec and a related company, Singh Real Estate Enterprises, to the New Jersey Economic Development Authority for $1 million worth of tax credits from the Angel Investor Tax Credit Program.

As part of the agreement, the state has agreed to defer all criminal prosecution against Holtec, a Camden-based energy technology company.

Holtec, which admitted no wrongdoing, has agreed to no longer pursue the Angel Investor Tax Credits the company applied for in 2018 — and to forgo the $1 million in tax credits the companies claimed were due to them.

Attorney General Matt Platkin, who announced the settlement along with the Office of Public Integrity and Accountability, said in a release that the agreement makes a bigger statement.

“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,” he 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 officials, in a release, said 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 officials also pointed to a previous dispute with the state regarding the $260 million Grow NJ award the company was given after building a 700,000-square-foot manufacturing facility in Camden.

After the state refused to honor their agreement, Holtec took the state to court, winning both in Superior Court and on appeal.

Under the term of the agreement announced Tuesday, Holtec and SRE will each use an outside independent reviewer approved by the state in all dealings concerning new awards, tax credits, loans and other benefits they may seek from any departments, authorities or agencies, including but not limited to the EDA.

In the event either company seeks such new benefits, the reviewer must file reports with the state about Holtec’s and SRE’s compliance with each’s agreement.