SolarCity Booked “Millions in Phantom Revenue”, Created “Bogus Accounts” Ex-Employee Claims

A SolarCity ex-employee has told ARS Technica that they believe millions of dollars in phantom revenue was recorded by the company – and that after “more than a dozen” people reported the event to the company, and to Elon Musk himself, nothing was done about it. 

This revelation, and others suggesting that SolarCity operated like a “struggling startup” were made as ARS Technica sought comment on a new lawsuit filed against SolarCity, and its parent corporation, Tesla.

The news of a lawsuit alleging that SolarCity is guilty of discriminatory practices against its employees has been making the rounds over the last couple of days: we reported it two days ago when the news first broke and the lawsuit was first made available.

But what was not fleshed out in the original piece – and is now the focus of a new report – is the alleged “tens of hundreds of millions [sic]” of dollars in fake revenue that may have been recorded by SolarCity as a result of fake accounts that the company tacitly may have been aware of. ARS Technica cites “a person with knowledge of the lawsuit who used to work in the San Diego office”, and who spoke under the condition of anonymity. That person stated the following:

A person with knowledge of the lawsuit who used to work in the San Diego office said that “thousands” of bogus SolarCity accounts may have been created by supposedly requesting solar panels for homes that turned out not to exist. Sometimes, these faux deals would be a valid residence but with a fake property owner’s name—the real person did not intend to move ahead with solar panels.

This tactic allegedly resulted, this person said, in tens of hundreds of millions of dollars in phantom revenue. He added that more than a dozen people reported the practice to the relevant human resources representatives, and CEO Elon Musk himself, who never replied. Ars granted anonymity as this person feared reprisal from Tesla.

On top of that, the same employee stated that SolarCity is allegedly just “crap” behind the scenes, noting that the company operated like a “struggling startup”. The disorganization and inefficiency, according to this employee, trickled down all the way from the human resources office to curtailing the amount of sugar and milk they were offering employees with their coffee:

This former San Diego employee also said that, despite working for a high-tech energy company, the SolarCity office, just south of the Marine Corps Air Station Miramar, operated more like a struggling startup, with electrical plugins that didn’t work, spotty office lighting, and even cutting back on sugar and creamer for the shared office coffee.

“Everything else behind the scenes was just crap,” he said.

The report also provides further details about the discrimination lawsuit we wrote about days ago. The lead plaintiff in the case alleges that even after he brought to the company’s attention that he, a gay man, was being berated and called names like “faggot”, “bitch” and “pussy”, that the company did nothing. He also claimed he had reached out to CEO Elon Musk personally, but to no avail. Perhaps Musk was out personally delivering a Model 3 that day.

The lead plaintiff in the case, Andrew Staples, who is gay, also alleged that he was “repeatedly and continuously harassed” by a supervisor from another department, Grant Katzenellenbogen.

“Specifically, this supervising employee continuously harassed Plaintiff Staples by calling him things like ‘bitch,’ ‘pussy’ and ‘faggot,’” his lawyers wrote. “These comments were made to Staples on numerous different days throughout his employment.”

According to the civil lawsuit filed last Wednesday in San Diego County Superior Court, Staples reported the insults and the questionable corporate practices to various managers, including to CEO Elon Musk himself, who seemingly took no action.

Staples was then terminated from his position at the end of May 2017, which he believes was retaliation for his complaints.

Another employee corroborated Staples’ claims:

According to Michael Beardsley, a former Tesla employee who said he was “witness” to much of the allegations outlined in the lawsuit, confirmed the ex-employees’ allegations. Beardsley, who is not named in the lawsuit, provided copies of emails that Staples sent to Tesla HR.

“I really appreciate you taking the time and effort,” Staples wrote on April 14, 2017. “I have voiced my concerns in the past to management, but I haven’t received a response and the seemingly unethical behavior by some on the team hasn’t changed. I can put up with a lot, but to have people that I’m mentoring become frustrated, and some who have come to me in tears over these issues and others disturbs me. I’m concerned that those who are truly putting in the effort and who are upstanding individuals are becoming disheartened.”

He also provided ARS Technica with specific examples of what he called “frat boy locker room crap”, including photos of female colleagues in their panties:

In addition, Beardsley explained, they were sent “incendiary pictures, memes and even pictures of female employees in their panties, etc.” It is not clear under what circumstances such pictures were taken or obtained.

Beardsley provided Ars with an example of a picture of someone he said was a female colleague dressed in what appears to be a bra and underwear running on a lawn at night. The San Diego ex-employee, who corroborated receiving that same picture from a different female colleague, was dismayed by what he called “frat boy locker room crap.”

Perhaps it is this kind of “locker room crap” that Tesla’s CEO finds interesting. Any questions about potential fraud at Solar City on tomorrow’s earnings call, on the other hand, should promptly lead to another “boring” temper tantrum.

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