NEW YORK — New York Attorney General Letitia James has obtained an order that blocks a Western New York company and its founder from offering and selling unregistered securities and from using investor funds to subsidize the founder’s lifestyle.

The Office of the Attorney General sought and obtained a temporary restraining order by the Erie County State Supreme Court against Kean Wind Turbines Inc. and its founder, Kean Stimm, blocking both from continuing to commit fraud against Western New Yorkers by marketing unregistered securities and diverting investor monies to pay for Stimm’s personal expenses, including the payment of a penthouse apartment and a personal assistant, among other items. The order forbids the defendants from selling or marketing any additional securities or from further dissipating investor assets – ensuring investments cannot be expended as the case proceeds to trial or there is a final disposition. Stimm and Kean Wind are accused of violating New York State’s Martin Act and Executive Law 63(12).\

After the Attorney General’s office opened an investigation into Kean Wind, Stimm and his company made assurances that they would no longer seek investments and would stop using investor money for personal expenses, but still continued to do so, even as COVID-19 public health crisis spread across the nation and many New Yorkers were left struggling financially.

“Kean Wind and its founder targeted environmentally-conscious individuals who wanted to invest in green energy and were sold on a ‘revolutionary’ wind turbine, but all investors got were empty promises full of hot air,” James said. “As the coronavirus continues to spread across our state and millions of New Yorkers worry about dwindling savings, it is unconscionable that Kean Wind has continued to cheat New Yorkers out of their hard-earned money. We are pleased that the court has immediately halted this company from further preying on innocent New Yorkers and making a mockery out of efforts to combat climate change.”

As stated in the complaint and memorandum of law — both filed simultaneously with the request for a temporary restraining order — Stimm raised more than $3.5 million from 435 investors in Western New York through years of illegal sales and false and misleading statements. According to Kean Wind, the company has supposedly engaged in developing a windmill called “the Newtonian Wind Turbine,” meant to generate electricity. But, while Stimm has assured investors that production was planned for “later this year,” each year, since 2013, the turbine has never gone into production. Among the other false and misleading statements listed in the complaint are that Stimm assured investors that their money had “virtually zero risk with an incredible potential yearly return for 17 years” and that his never-produced invention would be 50 to 100 times more efficient than existing wind turbines.

To date, investors have not received any returns on their investments and — seven years after Stimm began soliciting investments — the company is nowhere close to production on a turbine.

An investigation by the Attorney General’s office began after a complaint was filed with the office. The investigation found that Stimm and his company diverted investor funds to pay for a penthouse apartment, a personal aide, a cruise and a piano while he denied the use of money to pay for personal expenses. As recently as last month, Stimm continued to use investor funds for personal use.