BY: Matthew Termine, Jenny Ahn, Sam Koppelman, Blake Spendley, Michelle Cera

EDITOR: Vikas Kumar

The nation’s second-largest homebuilder is struggling to sell houses. So it found a buyer it previously owned: Millrose Properties, which gets most of its revenue from Lennar and counts Lennar’s CEO as its largest voting shareholder. Contrary to the plans in its initial SEC filings, Millrose has now bought an estimated $200 million of Lennar homes in about a month and is renting them out at what appears to be a loss. For investors, this may obfuscate the true lack of demand for Lennar’s homes. For families in these developments, it means more rentals next door and, some homeowners worry, lower resale values.

This is the latest investigation in Hunterbrook’s housing beat, which began with our debut story in 2024: an exposé on United Wholesale Mortgage, which has since succumbed to a rescue financing. We’ve investigated the private jets, yacht, and mounting debt of Restoration Hardware; the aggressive sales tactics LGI Homes uses to lure renters into homes they can’t afford; and construction defects that turned dream homes into nightmares. We’ve also investigated houses on wheels, exposing how Winnebago covered up failing RV frames, now the focus of a national lawsuit. Today’s story on Lennar and Millrose is among the wildest yet.

Based on Hunterbrook Media’s reporting, at the time of publication Hunterbrook Capital is short $MRP, short $LEN, and long a basket of comparable securities. Positions may change at any time. This article is not investment advice or any recommendation. See full disclosures on our website.

• Lennar ($LEN) found a big buyer for its houses: the spinoff Millrose ($MRP) it created to hold its land last year. Now Millrose is buying Lennar’s finished homes: Hunterbrook identified more than 700 purchases across at least 51 counties in 15 states — an estimated $200 million or more in about a month. Sustained for a quarter, that pace would equal about a tenth of Lennar’s latest quarterly deliveries and over 7% of its home sales revenue. In the last month, Millrose already appears to have become the largest buyer of Lennar houses that Hunterbrook has identified. A Lennar homeowner in a subdivision where Millrose is buying up homes put it bluntly: “Why are you buying your own homes? Aren’t you supposed to be selling these?”

• The purchases arrived just when Lennar needed them. Hunterbrook identified at least 356 Millrose purchases in the final week of Lennar’s fiscal quarter. Lennar beat the bottom of its delivery forecast by just 340 homes — the only one of five homebuilding targets it met. These sales were the difference between meeting and missing the forecast.

• Millrose told investors it wouldn’t be a landlord. Now it’s renting out Lennar’s houses.Homebuilders need land to build on. To lighten its balance sheet, Lennar moved much of its land into Millrose in 2025. Lennar pays Millrose a fee for the right to buy the lots back, one at a time, when it’s ready to build. Millrose’s role was clear: It would own the lots, not rent out houses on them. Millrose’s annual report said it would not “have any tenants or occupants” on its properties. In August, Millrose changed its agreements to let it buy Lennar’s finished homes and rent them out.

• Millrose appears to earn less on these houses than it pays to borrow. Hunterbrook compared purchase prices in county records with advertised rents on Zillow. After estimated property expenses, the homes would return about 5% a year, before interest and corporate costs. Millrose’s latest bond offering carries interest rates of 6.5% to 6.75% — more than those estimated rental returns.

• Millrose appears to be paying more for these homes than individual buyers and at least one other institution. Millrose paid about 13% more than individual buyers in the same communities, according to Hunterbrook’s analysis, after accounting for the roughly 12% in incentives Lennar says individual buyers received on average. Millrose also paid about 5% more than KKR-linked Slate, another bulk buyer of Lennar homes, in the same communities. Differences between the houses, and incentives absent from public records, could affect the comparisons. But the records offer little evidence that Millrose bought at a discount that would make its rentals more profitable.

• These purchases come as Lennar barely generates cash. Lennar reported about $2.1 billion in profit in fiscal 2025 but just $28 million in free cash flow, the cash leftover after paying to run and invest in the business. That’s despite cutting its building costs — and, allegedly, its quality. Hunterbrook’s earlier “House from Hell“ investigation documented corner-cutting and serious construction defects, later echoed by the Wall Street Journal. One steady drain on Lennar’s cash is Millrose: Lennar pays it about $43 million a month to hold land, according to Millrose’s most recent report. Those payments continue until Lennar buys the lots or walks away from them, which would mean taking impairments on investments it has already made.

• Why would Millrose help Lennar? It depends on Lennar’s payments. As a real estate investment trust (REIT), Millrose must pay out at least 90% of all its taxable income. Lennar supplied 72% of Millrose’s revenue last quarter. Millrose lacks independent capacity: It has no employees and relies on an outside manager, selected by Lennar. Lennar CEO Stuart Miller also holds approximately 43% of Millrose’s voting power. Helping Lennar sell houses could protect Millrose’s biggest customer and voting shareholder. Millrose’s own filings warn that its agreements with Lennar weren’t negotiated at arm’s length and “may be considered more favorable to Lennar.”

• Accounting rules say a company cannot book a sale to an entity it controls; a forensic accountant told Hunterbrook the question of Lennar’s control over Millrose seems “black and white” in spirit, if not technically. Lennar says it lacks “the power” to direct Millrose, but “Millrose seems to be acting against their own best interest,” according to JP Krahel, chair of Loyola University Maryland’s accounting department. John McPherson, a forensic accountant whose tip helped bring a successful SEC enforcement action, told Hunterbrook, “This is a tripwire that takes us from a gray zone to black and white.”

• Lennar could not be reached for comment; Millrose did not provide a comment in response to Hunterbrook’s questions. When reached ahead of a prior Hunterbrook article, Lennar issued an 8-K proactively disputing certain issues.

‍It’s a round trip that would make Jensen Huang blush.

Lennar, the nation’s second-largest homebuilder, has found a big new buyer for its homes: Millrose Properties, the company it spun off last year, whose largest voting shareholder is Lennar’s own CEO, Stuart Miller.

In the last week of August, the final days of its fiscal quarter, Lennar sold at least 356 homes to Millrose, according to Hunterbrook’s review of property records. That may not sound like a lot for a company that delivers more than 20,000 homes a quarter. But it was just enough.

When Lennar reported third-quarter results on September 16, it fell short of four of the five homebuilding targets it had given investors: orders, price, margin and overhead. The one it hit was deliveries. Lennar had forecast at least 20,500 and reported 20,840, a cushion of 340 homes. Without the sales to Millrose, it would have missed that target, too.

The sales continued. By the end of September, Lennar had sold more than 700 Lennar homes to Millrose across at least 51 counties in 15 states — roughly $200 million in about a month1 — Hunterbrook found. The search is ongoing, and the national total could be higher. If that pace held for a full quarter, Millrose would buy approximately 2,100 homes for $588 million to $630 million. That’s equivalent to about a tenth of Lennar’s latest quarterly deliveries and over 7% of its home sales revenue.

During this period, across a sample analyzed by Hunterbrook — representing about half of Lennar’s development communities — no other Lennar buyer seemed to come close.2

That flips the relationship. Since spinning Millrose off in 2025, Lennar has been its biggest customer, paying Millrose hundreds of millions of dollars a year for the right to buy its land. Now, suddenly, Millrose has become a major customer of Lennar’s, too.

Peter, meet Paul. Paul, meet Peter.

In a striking example of the round trip, deed records in Marion County, Florida, show that Lennar:

• Transferred ownership of land to Millrose, a “wholly owned subsidiary of the same owner,” in August 2024;

• Bought back the land at roughly $49,500 per lot in 2025 and 2026 in order to build homes;

• Sold the houses for the average price of $244,351 to Millrose’s subsidiary, MRP Liberty, in September.

It wasn’t supposed to be this way.

Millrose was designed as a land bank: a company that owns land so a homebuilder doesn’t have to carry its real estate on its books. At its founding, Lennar handed Millrose about $5.5 billion of land, roughly 87,000 homesites, and $1 billion in cash. Lennar pays Millrose option fees, initially set at 8.5% a year, that let it buy the land back lot by lot as it’s ready to build. Lennar then builds the houses and sells them. A clear division of labor.

Millrose’s filings were explicit about that. In its inaugural 10-K filed in 2025, the company said it did “not, and will not, have any tenants or occupants on any of the properties” in its real estate portfolio. Its properties were for holding land until Lennar bought it and for financing development work. “For the avoidance of doubt,” the filing added, those uses did not include “entering into any leases.”

Then, on August 27 of this year, Millrose and three Lennar subsidiaries signed an amendment to their Founder’s Rights Agreement.

The companies added a new category of assets: “completed single family homes.” The disclosure stated that Millrose would buy these homes and then operate them as rentals, exactly what the land bank had said it wouldn’t do in its initial SEC filings. “What you often find with these things is they find other uses for the structure once they have it set up, as things evolve,” said John McPherson, a forensic accountant, referring to Lennar spinning out Millrose.

The same day, Millrose amended its management agreement to permit rental homes and to make Millrose, rather than its manager Kennedy Lewis, pay their operating expenses. Millrose disclosed both updates in exhibits to an 8-K dated September 1.

By the time the new agreements were signed, the buying had already begun.

An Arizona deed dated August 21, six days before the amendments were signed, identifies MRP Liberty LLC as the buyer of a single family home in Buckeye, Arizona, for approximately $1 million. The name doesn’t say who is behind the buyer. Its Florida corporate registration does: MRP Liberty’s sole member is Millrose Properties.

Select portions of the application of MRP Liberty LLC to do business in Florida, showing Millrose Properties, Inc. as the sole member/owner of MRP Liberty, LLC.

It was one of several hundred sales to MRP Liberty that helped boost the deliveries Lennar reported in its September 16 earnings release, though the homebuilder did not publicly identify Millrose as a buyer of its homes.

The day after that earnings print, Berkshire Hathaway stepped up its buying of Lennar stock. Over the next few days, it bought nearly $350 million, pushing its stake past 10%.

Did Berkshire know Lennar was selling homes to its own land bank spinoff?

The storied investment firm did not reply to Hunterbrook’s request for comment. But it would be hard to blame it for missing this update. Because this arrangement isn’t in Lennar’s footnotes, the kind Berkshire’s former leaders, Munger and Buffett, were known for gobbling up like peanut brittle.

In fact, Hunterbrook couldn’t find the new arrangement directly described in Lennar’s SEC filings at all.

Millrose’s New Bet

The arrangement is visible, though, on Feaster Drive in Wesley Chapel, Florida, where finished houses stand alongside homes still under construction in a Lennar development.

At house number 9828, the garage stood open when a Hunterbrook reporter visited. A man emerging from the house said he worked for a property manager and had been cleaning inside, and that the house was for rent. He loaded his equipment into a white van marked “Homes for Lease.”

The house was listed by Lennar for sale in April at $490,990, according to Zillow. By August, the asking price had dropped to $420,490. The listing was removed on August 14.

Pasco County deed records show that MRP Liberty, a Millrose subsidiary, bought the house in August for $409,300. It is now listed for rent at $2,825 a month.

It’s a head-scratching purchase.

If the house rents at the advertised price, Millrose would generate about $33,900 in annual rent on its $409,300 purchase. But Millrose only takes home about $3,100 per year after property taxes, insurance, and financing costs, according to Hunterbrook’s estimates, which assume Millrose borrowed at the approximate 5.5% rate on its revolving credit line. That’s a return of less than 1% — before HOA dues, maintenance, or vacancies.

The Pasco County house isn’t an outlier. Across the Millrose-owned homes Hunterbrook found listed for rent on Zillow, Millrose would earn little or nothing once expenses and borrowing costs are counted, based on Hunterbrook’s calculation.

Finding tenants will take time too, it seems.

On September 29, a Hunterbrook reporter visited 36 addresses now owned by Millrose across four Lennar developments in Florida’s Marion County. None appeared occupied. Through windows, they saw unfurnished rooms. At several houses, notices hung from doorknobs. This is, perhaps, unsurprising, given how recently Millrose bought these properties.

The next day, a Hunterbrook reporter visited 39 Millrose-owned homes in Princeton, Texas, where Millrose has purchased more than one in four homes Lennar has sold since late August, according to deed records. None appeared to be lived in. Most had no cars or trash cans outside; at one house on Sandpiper Lane, the reporter noted large spiderwebs on the door. A worker answered at one property, while neighbors said several other houses were empty. Construction continued around them. Only four of the 39 even had a rental listing on Zillow as of October 1.

For Lennar, Millrose’s purchases came at a good time.

Lennar’s third-quarter net earnings fell by 43% compared to the same quarter last year. Home sales revenue fell 6%, new orders dropped 9%, and the average selling price slipped to $372,000 as incentives averaged about 12% of purchase price. Incentives are discounts or perks builders offer to entice buyers, such as mortgage-rate buydowns and closing-cost assistance.

Not a bad moment to find a new institutional buyer to perk up demand.

Millrose’s decision to absorb finished homes may also help Lennar with a bigger problem: option fees piling up on lots still sitting in land banks. Lennar pays those fees, at annual rates upwards of 8.5% on an estimated $18.5 billion of optioned land, until it buys the lots.

As Hunterbrook reported in “What Lennar Owes,” Lennar capitalizes the fees, recording them as an asset rather than an immediate expense. That asset line, called deposits and pre-acquisition costs, also includes other development costs. It stood at $7.3 billion at the end of August, up from $6.0 billion a year earlier.

Those fees may sit on the balance sheet as an asset, but they’re ultimately paid in cash. And Lennar has been draining its resources — fast.

The company ended August with approximately $1.2 billion in homebuilding cash, down from $3.4 billion in November.

So it seems pretty clear that Lennar stands to benefit from its new relationship with Millrose and the cash that comes from a new institutional buyer of its homes. But what’s in it for Millrose? Why would it want to suddenly start a new rental business whose economics seem so unfavorable?

Well, if Lennar struggles to sell homes it has already built, it might have to slow down buying more land to build even more homes. In fact, it’s already slowing down.

Lennar’s lot purchases from Millrose fell by a third between the December and June quarters. And on Lennar’s September earnings call, Miller acknowledged that slower growth had stretched out Lennar’s land purchases, increasing the fees it pays while waiting to buy.

If Lennar can’t sell homes, it has two interesting options: It could just walk away from the land, although that means forfeiting deposits, paying termination fees, and completing remaining land-development obligations.

Or Lennar could pause purchases of new land from Millrose; the agreements let Lennar, in specified circumstances, do that.

Neither is a great outcome for Millrose.

If Lennar pauses purchases, that cuts the affected monthly option payments to Millrose in half. If Lennar walks entirely, Millrose gets to keep the deposits, termination fees, and potentially other fees. But that could also present problems for Millrose, like finding new customers for those lots in a slow housing market.

Instead, by buying Lennar homes, Millrose can help ensure Lennar keeps the land and keeps paying fees on it. That’s important, as Lennar was responsible for 72% of Millrose’s revenue last quarter.

But “protecting the customer” is a form of control Lennar is exerting on Millrose, according to JP Krahel, chair of Loyola University Maryland’s accounting department. He described the arrangement as having Catch-22 logic.

If Millrose is so dependent on Lennar that it must make irrational purchases, then Lennar controls it, he argued. And if that’s the case, the accounting rules say Lennar should fold Millrose into its own financial statements, where sales between the two would cancel out. They would not count as revenue at all.

But if Millrose is independent enough to stay off Lennar’s books, it has no reason to buy houses that lose money, both McPherson and Krahel said.

“Millrose seems to be acting against their own best interest,” said Krahel, “and why would they do that if they were an independent organization?”

Millrose’s New Landlord Business: More Responsibilities, Less Income

Millrose discussed its rental-home program in a call summarized in a September 30 Goldman Sachs note to clients. Management described a small rent-to-own pilot for prospective buyers who cannot qualify for mortgages.

Under the proposed model, Millrose would buy homes with signed leases already in place and credit part of tenants’ payments toward an eventual purchase. Management said builder discounts and eventual home sales should produce returns comparable to or better than land banking. It also said the initiative originated inside Millrose, rather than with a builder, and that no asset management fee was currently charged on these homes.

If tenants did not ultimately buy, Millrose would sell the properties on the open market — with no right to return them to the builder.

Here’s what Hunterbrook found.

Millrose’s main land deal with Lennar yielded a weighted average of 8.5% a year as of June, before corporate expenses and financing costs. Its land banking deals with other customers yield even higher returns, according to the company.

The finished home purchases Millrose is now making, on the other hand, offer worse returns, according to Hunterbrook’s calculations.

On the surface, the numbers seem fine: The rent Millrose is asking for on Zillow adds up to about 8.4% of what it paid for the homes each year, according to Hunterbrook’s review of county deeds and Zillow rental listings for the homes Millrose purchased. That aligns with Millrose telling Goldman Sachs it has similar returns to its existing land banking business. But that’s not the full story.

8.4% is the gross yield. Out of that, a landlord must pay property taxes, insurance, HOA fees, repairs and management fees— which together add up to roughly 40% of the gross rent, based on Hunterbrook’s review of margins disclosed at comparable businesses.

That leaves about a 5% annual return.

And that’s before factoring in Millrose’s cost of capital. On September 22, Millrose priced new bonds at interest rates of 6.5% and 6.75%. The bonds don’t appear to be directly tied to these houses, but borrowing at those rates to buy homes yielding about 5% doesn’t appear to be a money-making proposition.

Other landlords have declined to make this trade.

American Homes 4 Rent, a leading industry player, said at a Bank of America-hosted real estate conference in September that homes it delivered in the second quarter yielded about 5.4%, and that it won’t underwrite new land below around 6%. The eight major institutional landlords were reportedly net sellers of 3,011 homes in the second quarter, five times as many as a year earlier.

Lennar’s largest peer DR Horton, which, among other business lines, builds rental communities and sells them to investors, reported a 44% drop in sales to institutional landlords, according to a recent 10-Q.

Invitation Homes, another large owner of single-family homes, has been selling its portfolio to fund share buy backs, vowing to continue to do so as long as its shares trade at a discount to NAV. Millrose too trades at a significant discount to NAV.

That is the environment in which Millrose has, suddenly, decided to start purchasing homes to rent.

So why is Millrose doing this? Is Lennar making Millrose an offer it can’t refuse? Houses at tremendous discounts?

Nope. Doesn’t look like it!

In the 47 Lennar communities where the pricing information was available on public deed data Hunterbrook found, Millrose paid an average of $290,661 per home.3 That’s a few hundred dollars cheaper than what individual buyers in the same communities paid: $291,112 on average, weighted to match Millrose’s purchases.

But individual buyers also got incentives, which Lennar said averaged about 12% last quarter. Subtract those, and families effectively paid about $256,000. Assuming Millrose didn’t receive similar incentives, it paid roughly 13% more than individual buyers.

Another, clearly arms-length institutional buyer did get a better deal.

KKR-linked Slate, which also appeared to be a major institutional buyer of Lennar homes in our deed data, paid about $263,000 on average on Lennar homes compared to $277,000 Millrose paid across 15 communities where both companies purchased homes and where pricing data was available.

The comparison doesn’t capture every difference in size, lot or finishes, or incentives missing from public records. The homes could still pay off for Millrose through rising rents, appreciation, or favorable financing. But on the surface, it’s hard to see why this is a particularly good use of capital for Millrose.

Hunterbrook also spoke with five homeowners in these communities grappling with institutional landlords. A resident in Millwood Estates, the Lennar community in Florida where Lennar sold homes back to Millrose after purchasing lots from Millrose months earlier, said they noticed more homes for rent and worried about what institutional buying meant for home values. “I’ve been thinking about trying to sell, and I don’t even know if I could get what I put into it,” the homeowner said.

A 2025 study of more than 9,000 homes bought by institutional investors around Charlotte, North Carolina found that neighboring home values fell about “2% within five years,” with more crime and far fewer building permits nearby, and that the declines occurred only around homes owned by publicly traded REITs. Another study, a Federal Reserve Bank of Philadelphia working paper released the same year, however, concluded single-family REITs modestly raised prices.

Andrew Baird, another Millwood Estates resident, mentioned no one in his community has figured out yet that the institutional buyer is related to Lennar. “It’s just kind of a weird dynamic,” he said. “Why are you buying your own homes? Aren’t you supposed to be selling these?”

Kevin Franz, a homeowner in Prosperity Lakes in Manatee County, Florida, noted that Lennar appeared to be slashing prices to move inventory and make way for yet to be launched developments in the area. “A lot of us are underwater now,” Franz said.

Lennar’s Hold on Millrose

Millrose and Lennar are technically separate companies, but they share the same DNA.

In addition to Lennar being Millrose’s largest customer — and Lennar CEO Miller being Millrose’s largest voting shareholder, with 43% of the votes — Lennar’s influence also runs through Kennedy Lewis, which has had a long, close relationship with the homebuilder. Lennar picked Kennedy Lewis for the job of managing Millrose, and the ties between Kennedy Lewis co-founder Darren Richman and Lennar go back two decades.

Richman, now the CEO of Millrose, once covered Lennar as a high-yield credit research analyst at Goldman Sachs. In 2021, Lennar and Kennedy Lewis began a land-banking partnership that Millrose’s investor presentation called a “deep-rooted relationship highlighted by their completion of $4.5B+ of land-banking transactions since 2022.”

Kennedy Lewis also served as Lennar’s unpaid strategic adviser on the structure, formation, and contracts of the Millrose spinoff. According to Millrose’s prospectus, “Lennar did not engage in a competitive selection process to evaluate KL against other potential manager candidates, including managers with relevant experience in managing public companies.”

Millrose has a separate board, whose directors it identifies as independent. But its policies give standing preapproval to the Lennar agreements and the transactions they contemplate. And the August 27 amendment permitting the rentals refers to an “approved single family home rental strategy.”

The filing does not say who, exactly, was behind that approval.

Asked for any more detail on the discussions between Lennar and Millrose, neither company provided a comment.

But Millrose itself has warned investors about potential conflicts of interest.

Because it had “no independent management or personnel before the spinoff,” its agreements with Lennar “have not been done at arm’s length,” the company disclosed to the SEC, and “there can be no assurance that Lennar negotiated the Management Agreement with Millrose’s best interests in mind.”

The terms, it said, “may be considered more favorable to Lennar than if Lennar had negotiated with a third-party land bank.”

And that was before Millrose started buying Lennar’s homes.

AUTHORS

Matthew Termine is a former corporate lawyer with significant experience advising companies operating within regulated industries. Matt led Hunterbrook’s investigation and reporting on United Wholesale Mortgage. In 2017, Matt was credited by the Wall Street Journal, among others, for identifying suspicious mortgage loan transactions that led to several successful criminal prosecutions, including that of a prominent political operative and the chief executive officer of a federally chartered bank. He is a graduate of Trinity College and Fordham University School of Law.

Jenny Ahn joined Hunterbrook after serving many years as a senior analyst in the US government. She is a seasoned geopolitical expert with a particular focus on the Asia-Pacific and has diverse overseas experience. She has an M.A. in International Affairs from Yale and a B.S. in International Relations from Stanford. Jenny is based in Virginia.

Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life. Sam is based in New York City.

Blake Spendley joined Hunterbrook from the Center for Naval Analyses (CNA), where he led investigations as a Research Specialist for the Marine Corps and US Navy. He built and owns the leading open-source intelligence (OSINT) account on X/Twitter, called @OSINTTechnical (over 1 million followers), which also distributes Hunterbrook Media reporting. His OSINT research has been published in Bloomberg, the Wall Street Journal, and The Economist, among other top business outlets. He has a B.A. in Political Science from USC.

Michelle Cera trained as a sociologist specializing in digital ethnography and pedagogy. She completed her PhD in Sociology at New York University, building on her Bachelor of Arts degree with Highest Honors from the University of California, Berkeley. She has also served as a Workshop Coordinator at NYU’s Anthropology and Sociology Departments, fostering interdisciplinary collaboration and innovative research methodologies.

EDITOR

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

DISCLOSURES

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BY: Jenny Ahn, Michelle Cera, Ruth Reader

EDITORS: Jim Impoco, Vikas Kumar

Based on Hunterbrook Media’s reporting, at the time of publication Hunterbrook Capital is short $LIFE and short bonds issued by Sammons Financial Group. Positions may change at any time. This article is not investment advice or any recommendation. See full disclosures on our website.

• Ethos’ third-party agencies, dominated by multilevel marketing organizations, make up about 40% of the company’s revenue. Ethos isn’t a carrier. It sells other companies’ policies for a commission, directly to consumers online and through third-party agencies. The agency channel grew about twice as fast as the direct business in 2024 and 2025.

• More than two-thirds of all Ethos agents and about 83% of its agency revenue is concentrated in just three agencies that Hunterbrook’s reporting indicates are multilevel marketers. Ethos doesn’t say who those agencies are, so Hunterbrook estimated using the personalized “microsites” Ethos gives every onboarded agent. Nearly 70% of these sites belong to three agencies, based on Hunterbrook Media’s investigation, and five of the top six run on multilevel compensation structures. The largest, Family First Life (FFL), accounts for an estimated 42% of all agents on the platform.

• The agencies recruit with income claims regulators have already called deceptive. MLM agencies rely on new recruits as a key source of revenue, and promise great wealth to attract new recruits. In reality, studies show up to 99% of MLM participants lose money. In December 2021, the FTC sent FFL a cease-and-desist letter for “unlawfully misrepresenting” that recruits were “likely to earn substantial income.”

• Ethos sells its abandoned applications as leads, and the leads fuel the recruitment machine. When someone starts an application on Ethos’ website and doesn’t finish, Ethos sells the information to FFL and potentially other partner agencies. FFL agents are pressured and possibly even required to purchase thousands of dollars’ worth of leads, a cost they theoretically recoup by selling insurance. Pay-to-play, which the FTC has warned could indicate a pyramid scheme, is one of the most controversial aspects of MLMs.

• Ethos’ customers may not know their information is being sold to third parties for profit. When applying for insurance on Ethos’ platform, the only chance Hunterbrook reporters got to opt out of data sharing was a single line buried in the privacy policy that users “agree to” by clicking “continue” to launch the online application. Consumers complain on the Better Business Bureau website and social media sites about calls from multiple “Ethos agents,” calls after 9 p.m., and calls after asking to be removed. At least eight federal robocall lawsuits have named Ethos since 2020, some arguing Ethos is liable for the callers because Ethos benefits from the activities.

• Some of Ethos’ MLM agents appear to engage in improper sales and marketing practices, including steering customers toward more expensive products they don’t need. Ethos built an “exclusive” “exclusive” indexed universal life (IUL) product “specifically” for FFL agents, and IULs were a significant driver of revenue growth in Ethos’ agency channel last year. Consumer advocates warn IULs are complex products often missold because they’re lucrative. Ethos gives additional bonuses for selling IULs, and FFL’s blog pitches IULs for their “larger average commissions.”

• Some agents also appear to be replacing policies for more commission, sometimes without customer consent. Agents are told to “review” clients’ policies every six to 12 months in order to replace them, according to a former FFL agent who spoke with Hunterbrook. This practice, known as “churning,” is often prohibited under state laws like Florida’s. Customers eat the cost, while agents earn a fresh commission.

• Agents also sometimes appear to suggest an affiliation with government programs or agencies. Training materials obtained by Hunterbrook instruct agents to handle objections by mentioning they represent a state-regulated program. In a recording of an alleged FFL agent, the man admits to using a sham website to mislead veterans. These practices could violate the FTC’s Impersonation Rule, The Telemarketing Sales Rule, and NAIC model regulations.

• Some agents even appear to have had their licenses revoked or denied. A 2024 FFL post celebrating the week’s top “Ethos superstars” included two agents who had previously been fined for selling insurance without a license or had their license revoked. Hunterbrook found dozens of agents with Ethos microsites whose licenses were revoked or suspended for, among other reasons, submitting fictitious applications, misappropriating client money, or misrepresenting insurance policies. One, a lawyer, was disbarred for misappropriating client funds. Others have had licenses revoked for child neglect, fraud, and making misrepresentations to potential clients.

• Ethos’s business model carries concentration risk. Hunterbrook reported on September 15 that at a recent FFL conference, FFL President Shawn Meaike ranked Ethos the “weakest” of FFL’s partners onstage. Meaike made Ethos’ reps apologize for their handling of a weekslong system outage at TruStage, one of Ethos’ three main carriers. Meaike then said Instabrain, which offers a similar agent platform to Ethos, was brought on specifically because it can do everything Ethos can do.

• Agency growth is eroding margins. Contribution margins fell from 42% in 2025 to 33% in the second quarter of 2026, which management blamed on channel and product mix. The Bear Cave, now a Hunterbrook publication, reported in May that Ethos is little more than a “lead-gen business;” J.P. Morgan rebutted that claim by pointing out that Ethos’ margin was well above pure lead generators.

• Venture backers and insiders have sold shares. Google Ventures, now GV, has sold close to 46% of its stake. Chief Executive Peter Colis, President Lingke Wang, Chief Financial Officer Christopher Capozzi, and Chief Accounting Officer Brandt Kucharski sold roughly $19 million of stock combined in August and September. Those transactions included sales under previously adopted trading plans and mandatory sales to cover tax withholding.

• Ethos, FFL, GFI, Equis, and Experior did not provide any comment as of the time of this publication.

To Wall Street, Ethos Technologies ($LIFE) is a rare success story in “insurtech” — industry shorthand for startups trying to replace traditional insurance brokers with code. Ethos’ pitch is simple: Bypass the pushy salesmen and inconvenient doctor visits with a “100% online” app that uses algorithms to approve life insurance in minutes.

Backed by GV, formerly Google Ventures, and SoftBank, Ethos has sold investors on rapid, profitable growth that eluded earlier insurtech peers that collapsed or were sold off for scrap, its CEO Peter Colis told TechCrunch. Ethos’ stock closed September 30 at $33.57 about 77% above its $19 IPO price, after trading at more than double that price early last month.

J.P. Morgan, Barclays, and Deutsche Bank — investment banks that helped underwrite its IPO and now cover the company — essentially tell the same bullish story: Ethos is a technology-driven insurance broker with high margins, high customer-satisfaction scores, and a large underinsured market to expand into. In May, Deutsche Bank called it “essentially the only digitally-native scaled life insurance provider left in the market.”

In May, The Bear Cave, now a Hunterbrook Media publication, described Ethos as a mediocre “lead-generation business” with “a narrow moat,” facing “allegations of misconduct from consumer complaints filed with regulators.” J.P. Morgan largely defended Ethos, citing the company’s margins well above lead-gen businesses.

But the reality on the ground may be grittier. A months-long Hunterbrook investigation shows that Ethos’ growth is increasingly fueled by a sprawling army of mostly commission-only multilevel marketing recruits churning out sales via aggressive cold calls and predatory and sometimes deceptive sales tactics.

MLMs aren’t illegal per se. But they’re controversial because of a recruitment-driven structure that the Federal Trade Commission has warned can cross into an unlawful “pyramid scheme.” That could happen when participants’ income comes mainly from recruiting new distributors rather than from selling products to real customers. Hunterbrook found numerous signs of recruitment-driven compensation at Ethos partner agencies.

One obvious sign: the constant churn of social media posts peddling promises of wealth. In reality, wealth in MLM organizations is often concentrated at the top, with some estimates showing as much as 99% of all participants losing money. Several of Ethos’ partner MLM agencies have faced lawsuits and enforcement actions for misrepresenting earnings potential to new recruits.

Ethos tells investors that its third-party agencies and agents are primarily independent contractors beyond its operational control. But Ethos’ role in the MLM machine may not be so passive.

Ethos provides Family First Life, a life insurance MLM and by far the largest of Ethos’ partner agencies by head count, according to Hunterbrook’s analysis, with bespoke products, hosts training sessions, and supplies the lifeblood of the recruitment machine: leads. The leads are compiled from the personal data of consumers who started an Ethos application and walked away.

MLM recruitment ads and training materials obtained by Hunterbrook repeatedly emphasize the importance of purchasing these leads, which is an indication of how important they are as a revenue source for Ethos’ key partner MLM agencies. Agents are pressured to “invest” what could amount to thousands of dollars a month in leads, according to a former agent who spoke with Hunterbrook.

Leads also enable the MLM business model, which has been accused of inflicting spam calls, privacy infringement, and predatory sales tactics on customers.

At a recent FFL training conference held in Fort Lauderdale on September 10, MLM agents said they make hundreds of calls for up to 12 hours a day. Customers could get called “50 times” from different agents based on the same lead, according to a former FFL agent. Hunterbrook found at least 10 do-not-call lawsuits against FFL and its parent company, Integrity Marketing Group, as well as eight separate suits naming Ethos as a defendant since 2020.

Agents appear to routinely cross lines, steering customers to more expensive products, misleading them about the agents’ affiliation, and writing policies without customer consent, according to multiple interviews with customers and MLM agents, accounts posted by former agents and customers on YouTube and social media, federal court complaints, and state regulatory actions against agents who sell Ethos policies.

Ironically, these tactics don’t always help Ethos’ bottom line. A phone script specifically for calling Ethos leads posted on an FFL branch website instructs agents to call Ethos a “secondary carrier” and promise customers a better rate with a “preferred carrier.”

Some agents have a checkered record that regulators have already deemed disqualifying. Hunterbrook found dozens of agents listed on Ethos’s platform whose licenses had previously been revoked or placed on probation.

Regulatory risk isn’t the only potential problem Hunterbrook found with the business model. Ethos relies on just three agencies to provide the brokers making most of the calls, which suggests concentration risk.

In its 2025 10-K, Ethos said 31% of total revenue came from “three of our most significant agency relationships,” up from 17% in 2023 and 25% in 2024. That means roughly 83% of the channel came from three distributors in 2025. That’s also broadly consistent with Hunterbrook’s estimate based on counting the personalized “microsites” Ethos gives every onboarded agent, which put the top three agencies at about 70% of the total agents onboarded with Ethos.

The danger in relying on too few agencies was on full display at a recent FFL sales conference, in a particularly embarrassing way for Ethos. On September 15, Hunterbrook reported an open rebuke by FFL President Meaike, who ranked Ethos as his agency’s “weakest” partner and demanded Ethos reps apologize onstage. The awkward moment came after an outage at one of Ethos’ main carriers, TruStage, caused policy lapses and other service disruptions, according to Ethos strategic accounts manager Dylan Cummings.

“We saw a 15% increase in lapses than we normally would” during the roughly three weeks of outage in July, Cummings told a Hunterbrook reporter on the sidelines of the conference. The day after Hunterbrook’s report, Ethos filed an 8-K addressing the TruStage outage for the first time, though it claimed no change to the lapse rates “in the July billing cycle.”

Later onstage, Meaike welcomed another technology partner, Instabrain, telling the audience that he brought the company on because it has all the capabilities Ethos has.

Ethos’ Sprawling Network of MLMs

Ethos isn’t itself an insurance carrier. It’s a middleman that sells insurance policies for other carriers, then earns a commission on those sales. It does so mainly in two ways: directly to consumers on its online platform, and through a network of third-party distributors that sell on Ethos’ behalf.

In 2019, Ethos Senior Vice President of Risk & Actuarial Brett Wilson framed the company’s focus on its direct-to-consumer platform as an ethical choice: “In the commissioned sales model, overselling is in the agent’s interest,” he told an interviewer. He added, ”We have no interest in selling someone a policy they might not be able to afford.”

But the priorities appear to have since shifted. According to Pranav Lal, Ethos’ former director of Enterprise Systems, who worked at the company from 2021 to 2022, there was a “big push” internally to establish third-party partnerships. “Partnership business was … what they were placing most of their bets on, to increase the revenue,” Lal told Hunterbrook.

The numbers confirm the shift. Third-party revenue doubled in 2024 and grew another 79% in 2025, roughly twice the rate of the direct-to-consumer channel, which grew by 46% and 40% over the same period, according to Hunterbrook’s review of the prospectus and the 2025 10K. The third-party channel went from a quarter of Ethos’ revenue in 2023 to 37% in 2025, and 39% in the most recent quarter.1 Three banks covering Ethos noted the agency channel is taking a growing share of revenue, with Deutsche Bank forecasting it “becoming a larger component of the mix,” in a sell side report in August.

And the agency channel appears heavily concentrated in just a handful of distributors. Ethos doesn’t disclose the breakdown of its agency partners, but Hunterbrook hypothesized a useful proxy: Ethos’ microsites for agents. Microsites are separate, personalized websites on Ethos’ domain that agents onboarded with Ethos receive and can share with their clients.

Hunterbrook’s analysis revealed an estimated 178,000 live microsites associated with unique agents. Nearly 70% of them belong to agents affiliated with just three agencies.

All three appear to operate on multilevel compensation structures.

At the top of the list is Family First Life, representing 42% of total head count, with the second largest agency, Global Financial Impact, trailing far behind at just about half of FFL’s head count.

MLMs also make up five out of the top six agency partners, representing nearly 80% of total agents on Ethos’ platform.

Ethos agencies’ websites don’t exactly describe themselves as MLMs. Eric Olson, founder of GFI, even explicitly denied GFI is an MLM in a 2024 video podcast with Ethos CEO Peter Colis. Olson is a former star agent at the World Financial Group, which faced a class action lawsuit filed in 2018 by former agents over worker classification and wage-and-hour claims. The plaintiffs also alleged a “massive pyramid scheme.” The firm settled that case for $65 million while denying liability.

Across social media and other marketing material, it’s clear Ethos’ top partner agencies rely on “downline“ recruitment, which is MLM industry jargon.

One giveaway is the promise of “overrides” or “spreads,” the perpetual cuts of the commissions earned by an agent’s recruits, their recruits, and every layer stacked beneath them. The bigger the pyramid, the more the agent might earn.

Experior, number three in Hunterbrook’s ranking based on Ethos’ agent microsites, even illustrates its compensation structure in the shape of a pyramid: each level holds a higher commission contract and keeps the ‘spread’ on sales by agents below. It’s a structure its co-founder Jamie Prickett calls a model “build on spreads,” even while avoiding calling it an MLM, instead calling it a “Tri-brid.”

Equis, Ethos’ sixth-largest agency by head count, spells out exactly how much more people at the top of the pyramid can earn: A “Builder Bonus” of up to $50,000 a month compared with up to $5,000 for individual producers, subject to production requirements.

Publicly available FFL documents break down the numbers in the compensation structure — and the role Ethos plays in it. A copy of FFL’s 2023 compensation hierarchy marked “internal” shows FFL agents are assigned a “contract level” based on their own and their teams’ production: the more policies their recruits write, the higher their contract level.

That contract level determines the percentage cut of the first-year premium agents receive as commissions from carriers. A separate document called the “Comp Guide” updated as recently as August 2026 shows how an agent’s contract level affects their compensation for policies sourced from Ethos. The actual compensation rate varies depending on the product, but the link is clear: FFL’s compensation structure is difficult to climb without recruiting, and agents’ compensation for selling Ethos-sourced plans feeds directly into it.

Ethos designed its platform for that structure. In its 2025 10-K, it described its agency platform as built for “downline performance management” to help agencies scale and accelerate their business. CEO Colis emphasized the point at an investor conference hosted by Goldman Sachs on September 9, calling Ethos’ platform “transformative for the agency owner” because it gives them “control over their downline agents’ productivity.” Colis added, “We’re always recruiting and onboarding new agencies who roll us out to all their existing agents, but then also go and keep recruiting more agents to our platform at no incremental cost.”

To sustain their stream of recruits, MLMs aggressively pitch prospective recruits on the promise of riches. “I don’t know what other business you can start for under 1,000 bucks and be making six figures, seven figures, sometimes eight figures in five to 10 years[ ]… if that fool can do it, I can do it,” a speaker said at an FFL training conference in Fort Lauderdale.

Social media posts by MLM agencies like FFL and GFI are filled with vignettes of successful agents making tens of thousands of dollars a month.

FFL CEO Shawn Meaike has even claimed his company has made more millionaires than anyone else in the sales industry.

The Federal Trade Commission warns that even talking about personal experiences during recruiting may be false or misleading if they don’t reflect the general outcomes for most participants.

Bonnie Patten, co-founder of consumer protection advocacy group Truth in Advertising, said such claims about business opportunities are deceptive by definition.

“Big claims like you can obtain financial freedom, quit your full-time job, replace your income… retire early. All those kinds of claims are just by definition deceptive because the MLM model in and of itself just doesn’t provide that kind of income for the typical distributor,” Patten told Hunterbrook in an interview.

That’s consistent with the FTC’s observation that MLMs’ emphasis on recruitment may be a feature of an “illegal pyramid scheme” resulting in an “insupportably large number of distributors” relative to real sales opportunities.

Hunterbrook’s data analysis estimated that the 178,000 agents implied by Ethos’ microsite count are more than 10 times the 15,000 active agents Ethos claims it has, defined as anyone who’s sold a policy in the last 12 months. In keeping with the FTC’s warning, that suggests roughly nine out of 10 agents might not have sold a single Ethos policy in the last year.

The microsites could presumably persist for someone who has left the agency. But the numbers also roughly track with FFL’s reported figures of current agents. The firm claims it has more than 80,000 affiliated agents; an estimated 74,000 microsites associated with FFL suggest nearly every FFL recruit is onboarded to Ethos. But only about 6,000 agents — or fewer than one in 10 of FFL’s 80,000 agents — wrote policies in July, according to an FFL Facebook post.

That’s typical of MLMs, William Keep, a retired business professor at The College of New Jersey who has studied MLMs for more than 20 years, told Hunterbrook. Almost all the inactive agents lose money, Keep said.

The FTC has also scrutinized, and faulted, FFL more directly. In December 2021, the FTC sent FFL a cease-and-desist letter finding that FFL was “unlawfully misrepresenting that consumers who become Family First Life business opportunity participants are likely to earn substantial income.” The FTC cited recruiting videos touting “$40k in a month” — similar FFL videos remain online. In August 2024, the Oklahoma Department of Securities issued an enforcement recommendation alleging FFL sold “business opportunities” without registration.

Experior has also faced regulatory scrutiny. In 2023, regulators in Ontario, Canada, named Experior as one of three insurance agencies using a “tiered-recruitment model.” In that review, 65 agents across the three agencies were cited for violations of the provincial Insurance Act, including 11 of the 30 Experior agents selected for examination.

Last year, State Rep. Melanie Ross Levin submitted a bill to the Delaware General Assembly that would require MLMs to disclose basic facts like how much their participants actually earn. The industry fought back hard, saying it would destroy their industry, Ross Levin told Hunterbrook, including by flooding her inbox with an alleged “10,000 emails” and threatening to storm her office with hundreds of lobbyists.

“If a little bit of disclosures closes down your industry, you know that you’re hiding something,” she said.

FFL’s “Ethos Superstars”

Agents aren’t the only ones harmed by these recruitment mills. Ethos customers are exposed to MLM agents who have faced fraud allegations, carry criminal records, or have been barred from selling insurance.

Selling insurance without a valid license is illegal in every state. Ethos said in its 10-K that “agents must complete an annual compliance certification to access our platform;” that its contracts make agencies “responsible for supervising their affiliated agents,” and that it uses machine learning to monitor agent quality. At the Goldman conference on September 9, Colis said that machine learning “allows us to be less discriminating in onboarding our agents than we otherwise would have to be.”

But the system does not appear to catch everything. Ethos admitted as much in its 10-K, stating that its “ability to monitor and influence agency and agent conduct is limited due to a variety of factors.”

And the data suggests how limited Ethos’ monitoring abilities may be. As one example, a Top 10 weekly Ethos sellers list FFL published in 2024 includes at least two agents with regulatory records.

The agent declared the No. 1 Ethos superstar in a 2024 weekly ranking, for instance, had been fined by the New Jersey Department of Banking and Insurance the year before for multiple violations, including soliciting insurance business without a license and misleading advertising. Regulators said multiple websites that this agent ran advertised “guaranteed returns” of “up to 7%” with “no market risk” without specifying the “insurers or annuity policies that would produce such results.” His Ethos microsite, which invites customers to “Get instant life insurance” and “Schedule a call with me!” is live today.

Another FFL agent who appeared as No. 9 on the 2024 list, agreed to the permanent revocation of his Wisconsin license “based on allegations of violating insurance laws and lacking the character required of insurance intermediaries.”

Under the National Association of Insurance Commissioners (NAIC) model act, which all states have adopted a version of, a license revoked in one state is grounds for revocation in every other state. If it’s the agent’s home-state license, their nonresident licenses elsewhere typically terminate automatically. And the National Insurance Producer Registry’s Producer Database, which insurance businesses can access for a fee, centralizes licensing information from all 50 states and incorporates regulatory-action records through the NAIC’s Regulatory Information Retrieval System—in theory allowing businesses like Ethos to efficiently identify problematic agents.

Yet, searching in enforcement databases in just five states, Hunterbrook matched 28 agents with live Ethos microsites to disciplinary records showing their licenses had previously been suspended or revoked. The reasons ranged from misleading customers about policies to submitting fictitious or invalid policy applications.

Other agents who have sold Ethos policies have questionable pasts unrelated to insurance, including grand theft, robbery, burglary of an occupied dwelling, false imprisonment, child neglect, methamphetamine and cocaine possession, and, in one case, video voyeurism and possession of images of animal sexual activity. All have an active Ethos microsite, though it’s unclear if they are still selling policies.

The lack of vetting isn’t confined to rogue foot soldiers. A featured speaker at FFL’s 2026 annual convention applied for his Pennsylvania insurance license in March 2024, three days after a misdemeanor conviction for carrying a firearm in public in Philadelphia. The state granted his license only under a consent order that lets regulators suspend the license immediately on any confirmed complaint for three years.

One of FFL’s senior leaders, who heads a large branch, was recently fined by the New York State Department of Financial Services for failing to disclose several criminal convictions on his “original application to act as an agent” in the state.At the pinnacle is FFL’s CEO and founder, who admits he had a cocaine habit and faced arrests for assault and drug possession. In 2019, he was arrested and “charged with third-degree criminal attempt” for “trying to board a plane with a loaded handgun.”

“PART OF THE PARTNERSHIP”

Ethos has said it isn’t responsible for its third-party agents’ conduct because they “operate independently.” But Hunterbrook found evidence of Ethos’ longstanding structural ties with the agencies that challenges the company’s narrative of arm’s-length independence.

Since 2022, when FFL announced a partnership with Ethos, Ethos CEO Peter Colis and former Chief Distribution Officer Marty Schafer have personally appeared on FFL-hosted videos to promote the partnership and announce “exclusive” Ethos products “specifically” for FFL.

A TikTok video also shows Ethos sponsoring FFL agents through a new car giveaway.

GFI founder Eric Olson also highlighted GFI’s partnership with Ethos on social media in 2025, calling Ethos the “official tech partner of GFI” that is rolling out “exclusive” solutions for GFI. “GFI wouldn’t be where it’s at without Ethos,” Olson added.

Colis appears to be no stranger to GFI’s recruitment-based business structure. “You’re only going to go as far as the people you recruit into the business,” Colis said, speaking to GFI agents visiting Ethos headquarters in one video posted by Olson in January. At some point when your team gets large enough, you have to stop doing things yourself and focus on,”Am I recruiting the absolute best possible people and making them as successful as I possibly can?” Colis said.

In fact, Ethos appears to have helped bring GFI into existence. In a 2024 video podcast hosted by Ethos CEO Peter Colis, Colis asks Olson how “working with us helped launch GFI.” Olson pointed to Ethos’ tech platform giving GFI unprecedented speed in business turnover: “There’s people literally getting recruited on a Wednesday that are licensed already Thursday, they’re getting appointed with Ethos, and then Friday they’re getting a paycheck.”

And perhaps the most concrete example of Ethos’ role in the recruitment machine: Ethos sells abandoned applications on its website as leads to FFL, which then sells them to its own agents as “exclusive” customer leads. A former FFL agent described being compelled to pay thousands of dollars for leads.

For the agency owners, lead sales to their own agents appear to be a central source of revenue — and what drives the engine that concentrates income at the top of the pyramid, often at the expense of new recruits.

Ethos Leads Supporting the Pyramid

Ethos’s 10-K does not highlight selling leads, mentioning it only in passing with language like: “With our agent platform, agents can enroll in minutes, acquire high-intent leads, sell a policy the same day, and get paid as early as the next day.” The filing doesn’t say where those leads come from, how much revenue they generate, or who buys them.

These “abandoned cart” leads, as FFL America calls them, are information that Ethos collects on consumers when they start a life insurance application on Ethos’ website and don’t finish.

“We spend a lot of money for people to come to our website, and when people don’t finish the application, after about a week, Ethos sells them as leads,” Nick Taylor, another Ethos representative who was at the recent FFL conference in Fort Lauderdale, told a Hunterbrook reporter.

FFL offers Ethos leads through ILC, or the Integrity Lead Center, Taylor said. (Integrity Marketing Group is FFL’s parent company). On its website, a branch called FFL America advertises two types of Ethos leads — “premium” and “value” — available through the Integrity Lead Center, “your one-stop shop” for quality leads.

Lal, the former Ethos director, confirmed to Hunterbrook that Ethos sold those leads as “part of the partnership.” He said individuals can’t buy leads unless they’re an established partner. Cummings told a Hunterbrook reporter at the September 10 FFL conference that there were “a couple” of other agencies Ethos sold leads to, but that he wasn’t sure if Ethos was going to keep those programs because “it might be more trouble than it’s worth.”

In a 2025 FFL training video, an Ethos representative explained that leads run $8 to $18 apiece, depending on how “fresh” they are. Agents buy “15 or 20 of them a day,” or even 400 at a time, FFL agents co-hosting the video said. The Ethos rep added that the company generates “anywhere from 10,000 to 15,000 [leads] a week.”

That’s as much as $270,000 maximum lead revenue potential per week, or an estimated $14 million a year, potentially shared between Ethos and FFL depending on the profit-sharing agreement.

It’s also millions a year FFL agents are paying into their own company, which is one of the model’s most controversial features: Agents may end up paying more to participate in the business than they earn from it. The FTC documented the pattern in a 2024 staff report, which concluded that participants’ expenses “can, and in some MLMs often do, outstrip income.

In the training video with Ethos, FFL co-founder Andrew Taylor conceded as much: “Some people lose money,” he said, though he added, “I don’t know why.”

Patrick Teschke, a former agent with FFL and Equis, another Ethos’ partner MLM agency owned by the same parent company, Integrity, told Hunterbrook agents can spend thousands on leads that convert at rates as low as 5%. YouTube videos by FFL agents describe being pressured to buy leads, costing them $500 to $2,000 a week. One person described how spending $4,000 on leads made them “almost homeless.”

In at least one instance Hunterbrook found, buying leads isn’t optional.

At one FFL agency called Horizon, agents have been required to purchase leads weekly. A 2022 contract obtained by Hunterbrook required agents to commit to at least $500 per week and as much as $2,500 a week in nonrefundable lead “dues.” Agents were only allowed to opt for the $500 option for a total of three weeks.

Others may not be explicitly required to buy leads, but are intensely pressured to do so. Ethos’ CEO describes the cycle as a feature. A new agent, Colis told investors at the September Goldman Sachs conference, “can onboard, learn, sell a policy, get paid the next day a commission, reinvest those commissions in lead prospect — in lead buying or prospecting and so on and so forth.”

In an FFL leadership group chat in 2021 obtained by Hunterbrook, an FFL senior leader instructed the other managers to “reach out to ALL their new agents today and make sure they are buying leads TODAY.” That agent is now married to FFL President Shawn Meaike and shares his last name.

Numerous FFL videos on social media also feature FFL leaders aggressively messaging to agents on the need to buy leads.

“Don’t think about the cost,” FFL CEO Meaike tells agents in a video, promising them the worst thing that can happen is breaking even. In another YouTube video posted by an FFL executive, a speaker tells agents, “Your lead flow literally is your cash flow.” . She added, “I don’t care if it’s your last $500.” Before joining FFL, this agent was a “top distributor” at Vemma, an MLM company effectively wound down by the FTC in 2016 as an illegal pyramid scheme that “compensated participants mainly for recruiting others rather than for retail sales.”

At the September 10 FFL conference, the message was the same: “It’s more dangerous to not get leads than it is to get more leads,” one speaker said during a panel dedicated to helping new agents overcome fears of spending so much of their own money on leads.

“You have to change your mindset from being an employee to a business owner,” said another. “If you’re a business owner, you have to have inventory.”

An exchange between the host and an FFL agent onstage at a September 10 FFL training conference held in Fort Lauderdale describes the agent overcoming his initial fear of investing personal money into leads, then turning that money into tens of thousands of commission revenue.

The leads may not be as valuable as their price tag suggests, according to Teschke. He said the ones being sold by the agencies as “exclusive” might have been sold to 50 other agents at a time.

“I’m not exaggerating when I say this,” he said, saying he pegged that number to the people he called, who consistently told him “you’re like the 50th person to call me.” His statement echoed a complaint from a Reddit user describing Ethos leads as “sold ten times over.” One former agent for FFL warned others about lead recycling on Glassdoor. “FFL is double-dipping, triple-dipping, quadruple-dipping ... on the same lead over and over again,” they said. The leads end up “being hounded by agents” over and over again. Others discussing leads on Facebook, however, appeared to like Ethos leads, with one commenter saying, ”Ethos Abandoned Cart leads are 🔥.”

A class action filed in 2022 alleged FFL earned $3 million to $4 million a week selling recycled leads to its own agents, although the case was dismissed for lack of personal jurisdiction without any ruling on the merits.

Consent by “Click to Continue” to Personal Data Sales, Robocalls

Consumers who volunteer their personal information when applying for life insurance on Ethos’ website may be unaware that Ethos distributes that information to third-parties for profit.

To see how easy it might be for shoppers on Ethos’ website to learn — and consent to — the fact that Ethos might sell their personal information to third parties, Hunterbrook reporters applied for life insurance on Ethos’ website.

The only way Hunterbrook reporters found to opt out of data sharing was a single line buried in the privacy policy, bundled with other disclosures about personal data collection that users “agree to” by clicking “continue” to launch the online application.

Consumers who tried to apply for life insurance on Ethos’ platform have complained on the Better Business Bureau website and other consumer review sites about being harassed daily with calls from multiple “Ethos agents,” spoofed numbers, calls after 9 p.m., and refusals to stop after repeated opt-outs. One complaint said the agent even replied, “maybe you should stop submitting applications then.”

Ethos’ standard reply to the BBB complaints directs people to a “Make a Privacy Request” portal, which several complainants say did not help.

One reply amounts to an acknowledgement of how lead sales can go wrong. A complainant wrote that someone claiming to be an Ethos agent asked for her Social Security number “for medical records” and pitched an “upgraded whole life policy.” Ethos responded, dated 10/28/2025:

“it is likely that the client’s contact information was shared with some of our affiliates including licensed life insurance agents that may not be contracted directly through Ethos.”

Hunterbrook found at least 10 federal robocall lawsuits against FFL or Integrity Marketing Group and eight separate lawsuits filed against Ethos since 2020. They describe the same pattern: consumers who had filled out an Ethos form received unwanted calls and texts from agents who wouldn’t say who they worked for, with an Ethos-hosted invite link. Most are Do-Not-Call cases under the Telephone Consumer Protection Act, or TCPA.

In three of the eight Ethos cases, plaintiffs sued the agent or marketing firm they say placed the calls but also sought to hold Ethos responsible for that caller’s conduct. The most recent case, filed in February, argued Ethos “ratified” the calls by knowingly accepting their benefits. It cited the defendant-agent’s own admission that Ethos “provides him with computer systems, software, and leads.”

Ethos acknowledged the risk in its 10-K filing, stating that the company has “received informational requests from governmental authorities and have been and may in the future be subject to investigations and enforcement actions … related to disclosures of personal information, including certain types of sensitive health information.”

Beyond the TCPA, however, consumers may have limited statutory protection. According to Harold Ting, a consumer advocate at the NAIC, there’s no modern privacy law specific to insurance anywhere in the U.S.2 He described the consent shoppers give as largely illusory, with a privacy notice that “steers you into accepting that you’re gonna share all your data” or made deliberately “challenging and difficult to understand.” The practice, coined “dark pattern,” however, is not illegal in most states, Ting said, with an NAIC model rule requiring more explicit disclosures on its sixth year of facing industry opposition.3

Eric Troutman, a defense attorney and co-founder of the privacy and telecom law firm Troutman Amin, also agreed that Ethos’ privacy disclosure likely covers the company legally: Once a consumer clicks past even a boilerplate notice, he said, courts will generally treat that as permission to pass the information on. “These lead generators operate with very little risk because there’s really no law that prevents them from selling the data as long as there’s a disclosure,” Troutman said.

Nevertheless, Troutman argued that lead generators share substantial moral culpability: “It’s really the Ethoses of the world, it’s the lead generators of the world, who are selling their data sometimes without permission, who are actually leading to all these robocalls down the line,” he said.

Consumer Harm: Sold Up, Switched, and Signed Without Consent

Beyond spam calls are allegations of more serious harm to consumers conducted by Ethos’ third-party agents, documented across lawsuits and regulatory actions as well as consumer review sites and hundreds of videos and social media posts by former agents and industry watchdogs.

Ethos says, “We don’t employ a single commissioned agent, meaning individuals don’t profit from selling a policy, eliminating the temptation to hard-sell or upsell.”

That appears to be only partially true: Ethos’ third-party agents may not be direct hires, but they do profit from selling policies and appear to be routinely pressured to hard-sell, Hunterbrook’s investigation suggests. Agency leaders instruct agents to steer customers to more expensive products, train them not to take no for an answer, and push them to replace existing policies, according to former agents who spoke with Hunterbrook and on social media, and Hunterbrook’s analysis of publicly available training materials and videos.

Steering Customers to Products for Agent Benefit

“Steering” occurs when a seller pushes a consumer toward a particular product for the seller’s benefit — say, an accumulation indexed universal life (IUL) policy— rather than the coverage best suited for the consumer.

Accumulation IULs combine life insurance with a tax-advantaged savings account whose growth is linked to a stock-market index. While insurance sellers often pitch features of these policies like downside protection, cash withdrawals, and tax-free retirement savings, many independent financial planners agree that accumulation IULs only make sense for very high net worth individuals.

For others, advisory sites and plaintiff law firms call them “complex and opaque” products often containing high, hidden fees that make them prone to lapsing, often misrepresented and missold by agents. But because they’re lucrative, MLMs often push IULs as their primary product, according to investment fraud law firm RP Legal.

Ethos representative Cummings described the same sliver of wealthy customers as IUL sales targets when asked by FFL agents at the conference: he explained that IUL policies are for clients who have already maxed out on 401k and still have money they “literally don’t know what to do with” and who also need life insurance. “If you need the money in five years, this isn’t for you,” he said, and clients “need the discipline to put $500 away and not think about the cash value at all.”

Few average consumers fit that profile. Yet Ethos appears to have made a strategic decision to push IULs to a broader population, especially through its agent channel. In an earnings call earlier this year, CEO Colis described IULs as traditionally a product “dedicated to the high-net-worth market,” but that Ethos is making it “more accessible to the mass affluent market.” He added that “there is demand from agents for this.”

On Meaike’s podcast, Ethos CEO Peter Colis said Ethos rolled out its branded IUL product specifically for FFL agents. In an October 31, 2023 video posted by an Ethos agent, Ethos’ then Chief Distribution Officer discusses Ethos’ new IUL product built “exclusively” for FFL. He said Ethos was giving away a $150 lead credit to agents who sold the policy discussed in the video before year end, and a free iPad for the first 100 FFL agents who sold the product.

Teschke told Hunterbrook agents were “brainwashed” to steer customers to IULs and other more expensive or lower-quality products. One reason: higher premiums, which means more commission. “My IULs I’m selling averaging 200 bucks a month rather than 90 bucks a month, I’m making a lot more on IULs,” Teschke said.

Agents also like IULs also because they have a lower lapse rate. In a blog post from last year titled “Why You Should Be Selling IULs,” FFL promises that “when structured correctly” IULs often bring “stable premium payments,” “larger average commissions,” and “opportunities to cross-sell,” not to mention higher retention. In another FFL podcast, an FFL agent explains that, because IULs tend to have a much higher monthly premium, policyholders are less likely to discontinue the policy because of the sunk costs. “It’s like the fear of loss is too powerful.”

Consideration for whether or not the IUL is the best fit for the customer appears secondary, if existing at all. “A lot of times I’m not even showing them the prices,” one agent at a FFL training conference in 2020 said. “I run this pre-qualification to make sure they can get it … so I can easily do a product that’s potentially more expensive.”

Rather than explain how IULs work, Teschke said agents are trained to sell emotion: “They’re speaking emotionally to them about what that policy is going to do for them … rather than telling the honest truth.”

Another former agent spelled out the potential dangers to a consumer who purchases an IUL without fully understanding the policy: “Imagine a 70-year-old that cannot go back to work, and they bought a product thinking they are going to retire off of it and they take a couple years worth of loans,” Michael Garcia, a life insurance agent who used to work for FFL, told Hunterbrook. “They’re over leveraged, the policy lapses, and all of a sudden, they have a massive tax bill because these policies grow tax deferred, not tax free.”

And, by Cummings’ own account, Ethos’ IULs are not the best out there. Cummings said he personally has two term life insurance policies with Ethos but that he opted to go with Mutual of Omaha for his IUL “because I wanted it to be underwritten and get better rates.” He said, “Mutual of Omaha has among the best IULs on the market,” adding he worked there for more than 15 years before joining Ethos.

Ethos’ efforts to push IULs nevertheless appears to be working. In its annual report, Ethos attributed the agency channel’s faster growth in 2025 to IUL and whole life products “which were mainly sold through the third-party channel.” Whole life, like IUL, is permanent insurance that builds cash value, unlike term, the simpler, lower-cost coverage that dominates Ethos’ direct channel. Ethos reported triple-digit percentage growth in “other products” compared to a more modest 29% growth in term life products year over year.

The NAIC has repeatedly tightened guidelines on how insurers can illustrate IUL performance amid concerns that consumers don’t understand complex products like IULs.

Customers may also be getting steered toward buying more insurance than they need.

At FFL’s 2020 sales conference, a senior leader taught agents to talk homeowners out of their own estimates, inventing equity for the family to “lose” and a reason to buy mortgage protection. If a customer with a $250,000 mortgage says the house is worth $235,000, the agent should counter that “these same houses were going for around $300,000” before the 2008 crash, he said.

“What I’ve automatically done is I’ve given them $50,000 more dollars in equity in their house.”

FFL agents are compensated based on the premiums generated by the policies they sell.

Courts have previously punished similar conduct that relies on deceptive tactics to steer customers toward more expensive products. In what is believed to be the largest total of civil penalties ever under the Massachusetts Consumer Protection Act, a Suffolk Superior Court judge ordered three UnitedHealth insurance companies, HealthMarkets, Inc. and its subsidiaries, to pay over $50 million in restitution for consumers and over $115 million in civil penalties to Massachusetts for misleading consumers.

HealthMarkets is a third-party agency that appears on Ethos’ website.

A screenshot of Ethos’ website showing HealthMarkets as a partner agency. Source: Ethos

The December 31, 2024 order was a result of a complaint filed by Attorney General Maura Healey, who said at the time, the companies’ business model “was to dupe consumers into buying supplemental health insurance products, which they did not know about, did not want, or were misled into thinking were necessary or valuable.” Healey specifically identified HealthMarkets as a repeat offender adding, “We are suing to recover the money taken from Massachusetts residents and ensure that this never happens again.” HealthMarkets has appealed the decision. The case is pending.

Churning: Unnecessarily Replacing Policies for More Revenue

“Churning” is a related insurance sales abuse that is explicitly prohibited under some state laws governing insurance sales. Under Florida law, churning means using an existing policy’s value to buy a new one from the same insurer to earn a new commission, without a demonstrable benefit to the customer. Former agent Teschke said churning was built into how agents were trained. “They teach you to call your clients every six to 12 months; they call it a policy review,” he said. But what they’re implying without saying it directly, he said, is “to replace your own policies every year so you can keep making money.”

The customer absorbs the cost. Each replacement restarts the coverage, and charges can sometimes eliminate or reduce the cash value of the surrendered policy. It can also restart the contestability period — the two-year window where the company can investigate your medical history if a death claim is filed and refuse to pay out the benefit, Teschke claimed.

Indexed products, including IULs and indexed annuities, are structured in ways that encourage churning, said Birny Birnbaum, executive director of the consumer group Center for Economic Justice and a former chief economist at the Texas Department of Insurance. Such products cap the customer’s upside, and the cap “isn’t guaranteed. So after a year, the company can say we’re reducing the cap to 7% or 6%,” he said, and “at that point the consumer has a real interest in moving to a new product.” The industry is “structuring this in a way that either encourages consumers to churn their policy or to lapse their policy,” Birnbaum said.

Ethos appears aware of the practice. At the conference, Cummings explained to FFL agents that Ethos was clamping down on policy replacements because there was a perception that people were “unfairly replacing policies” by taking an Ethos policy and replacing it with another Ethos policy.

Ethos has also seemingly alluded to churning in its SEC filings, stating in a risk factor that agents working with Ethos may terminate Ethos policies and replace them with different policies “in an improper manner,” which Ethos prohibits in its contracts with its partner agencies.

Churning may be damaging for agents too. Teschke claimed senior agents often tried to replace policies written by junior agents with more competitive ones, taking the commission on the new policy and leaving the junior agent with a chargeback — the money Ethos and insurers claw back on the commission advanced to the agent if policies lapse or are canceled within the advance window.4 Teschke acknowledged that this is hard to prove, but said it might be one reason FFL pushes junior agents to sell Ethos and Americo, its two most sold products: senior agents know the policies are uncompetitive and can beat them with their more quality offerings.

The practice is visible to the public. A document titled “Ethos Script” on a FFL branch Relentless Insurance website provides a phone script apparently for calling people who didn’t finish their Ethos applications, and —- ironically — telling them: “Well the reason I’m giving you a call here is because it looks like you’re eligible for one of our preferred carriers with better rates.”

Another document titled “Rebuttals (Ethos Tailored)” seems to offer agents a one-size-fits-all script for leading existing policyholders into a new policy. Agents are coached to claim they should be able to see the customer’s policy but can’t, then to tell the customer that their coverage is “actually one of our secondary carriers that we will usually only place people with major health issues.”

A document titled “Updated Rebuttals (Ethos Tailored) on FFL America’s resource page for agents provides a call script for selling insurance policies. Source: FFL America

Even a former Ethos underwriter agreed Ethos products were uncompetitive. “It’s definitely more expensive … they’re competing more on the sales experience than they are in price.”

Impersonating Government Officials, Drafting Policies Without Consent

Jonathan Marcoulides made a simple mistake of googling for information on his own insurer, Primerica, to lower his premium. He called a number that appeared in the results. The person who picked up persuaded him to get a new, cheaper policy, but said he needed to re-submit his bank details because “banking information doesn’t carry over.”

According to Marcoulides, he called back just 10 minutes later only to find out that the agent was actually with Ethos, not Primerica. He told Hunterbrook that Ethos had already pulled $191 from his bank account. “I never said I was with Primerica,” Marcoulides recalls the agent saying when confronted. It took a month and a complaint to Oklahoma regulators to get the money back from Ethos, Marcoulides said.

Marcoulides’ ordeal also echoes complaints across consumer review and social media sites accusing “Ethos agents” of pretending to be someone else or submitting a policy without their consent.

One shopper wrote in a Facebook post that, after filling out an Ethos application, he received a call from a woman who held herself out to be an official with the DeKalb County office of Georgia’s insurance commissioner.

A TikTok video shows a recording of an alleged FFL agent who claims he targeted veterans by introducing himself as from the “Veteran Support Agency” — a “bullshit” domain name, according to the shopper, purchased specifically to target veterans.

The website is real, and appears to be a lead generator. It asks visitors their contact information and directs them to an FFL agent who appears to have a dedicated Ethos microsite.

At Equis, call scripts obtained by Hunterbrook show some agents are trained to sound like they are connected with a governmental program or agency.

Phone scripts for Equis agents obtained by Hunterbrook says, if the agent receives an objection, their response should claim the plans are “state regulated” and they “have to do certain steps.” It also instructs agents to mention they “have been asked to get this taken care of” and that the program is state-regulated. Source: Hunterbrook Media

This conduct could violate the FTC’s Impersonation Rule, the Telemarketing Sales Rule, and NAIC model regulations. The FTC’s Impersonation Rule, in effect since April 1, 2024, makes it unlawful to “materially misrepresent, directly or by implication, affiliation with, including endorsement or sponsorship by, a government entity.” The Telemarketing Sales Rule prohibits misrepresenting affiliation with a government entity. And the NAIC model regulation, adopted by roughly two dozen states, bars anything that leads a consumer to believe solicitation is in some manner connected with a governmental program or agency.

The alleged misconduct has already begun to catch up to FFL agents, though not through Ethos. John Hancock recently terminated nine agents, all of whom were affiliated with FFL, for alleged insurance fraud and misrepresentation, including “impersonating clients to redraft policy premiums and/or cancel policy” without their authorization. When Hancock followed up with customers, it found that they never applied for a policy and were unaware the agents had opened an entirely new policy. One agent, the investigation found, was even paying for their customers’ premiums out of their own bank account.

Hunterbrook confirmed that at least four of the agents have since had their licenses revoked, three by Rhode Island and one by Utah, and two others settled with Rhode Island regulators. At least three still have active Ethos microsites.

And although Ethos doesn’t directly employ FFL, GFI, Equis, or other MLM agents, the company could still be responsible for their conduct, says Kati Daffan, a lawyer with consumer protection-focused firm Vaca Daffan and former Federal Trade Commission official.

“The law is clear. If an outsourced seller acts like your agent, you own their misconduct. MLMs add another layer because the incentives are critical,” she told Hunterbrook.

A repeated allegation in the eight federal telemarketing complaints against Ethos in the past five years is that agents avoided saying who they work for on calls. One plaintiff got only first names, apparently pseudonyms, and one caller declined to identify his employer’s proper name. Three of the complaints argue Ethos is liable for calls placed by someone else.5

Concentration Risk

Aside from potential regulatory risks, Ethos’ reliance on third-party sales networks may be an earnings issue.

For one, the agency channel appears to be a much lower-margin business because Ethos keeps only the spread between the commission it gets from the carriers and what it has to pay the third-party agents.

The company doesn’t disclose profitability by channel, but blended margin dropped from 43% in the last quarter of 2025 to 39%6 then again to 33% in subsequent quarters. Management attributed the decline to channel mix and product mix in the agency channel — referring, seemingly, to a growing share of its business coming from whole life policies, which are less profitable for Ethos but demanded by agents.

Moreover, with nearly a third of its revenue tied to just three agencies, Ethos may be exposed to significant concentration risk if its relationship with those agencies weakens.

Already, Ethos’ edge as a technology-forward partner for independent agencies may be facing pressure from multiple angles.

At the FFL conference where Ethos reps were asked to apologize onstage for TruStage’s outage, Shawn Meaike pointed to another tech partner, Instabrain, as a potential replacement.

“Is there anything that Ethos does on their platform that you won’t do?” Meaike asked the CTO of Instabrain onstage. “No! That’s why we brought them here!” Meaike said, speaking to the audience.

Instabrain offers insurance agencies a similar tech platform to Ethos’ to write their customers’ policies and get approved in minutes. The Instabrain CTO said the company has been adding new carriers and their products on the platform. “Instabrain platform that we built to be the easiest platform in the industry,” he pledged.

Cummings didn’t seem to agree. Cummings said to a Hunterbrook reporter that he hadn’t heard “amazing” things about them, despite seemingly everyone at the conference talking about them.

Then there is Sammons Financial Group, another key partner of Ethos’ helping to drive its third-party revenue; a Sammons subsidiary, North American Company for Life and Health Insurance, underwrites the new IUL products for Ethos.

As Hunterbrook Media first reported, Sammons is deeply entangled with Guggenheim Partners, which faces an active federal criminal inquiry over its alleged failure to disclose related-party transactions. Sammons’ parent company is the largest single stakeholder in Guggenheim’s holding company, and Sammons had been responsible for $130 billion of life insurance assets largely managed by Guggenheim. Sammons recently claimed it is reducing its exposure to Guggenheim.

Sammons’ bonds fell to their lowest since being issued in June as the Walter investigation progressed.

Against this backdrop, some of those closest to Ethos have been unloading their stakes. Chief Executive Peter Colis, President Lingke Wang, and Chief Accounting Officer Brandt Kucharski have all sold shares in August and September. Some transactions followed previously adopted trading plans or covered tax withholding. Some of Ethos’s early venture backers have been selling, too, including Google Ventures, which has shed close to 46% of its stake.

It’s, perhaps, unsurprising, considering how far Ethos has moved from its original pitch.

A company that offered consumers a way to bypass commissioned agents now seems to depend on winning — and keeping — those agents’ business.

In 2019, Ethos presented its direct-to-consumer model as a way to protect customers from the incentives of traditional insurance sales.

“In the commissioned sales model, overselling is in the agent’s interest,” Brett Wilson, then Ethos’ vice president of risk and actuarial, told an interviewer. The company’s ambition went beyond moving applications online: “We’re not putting a website on top of a traditional insurance process.”

Not even a decade later, Ethos depends deeply on third-party agents. And the company builds products specifically for multilevel marketing agencies, helps their recruits get appointed and paid, and sells unfinished applications as leads for agents to pursue.

It’s generated quite a bit of business. It also may have created a meaningful liability for Ethos.

“If a payout structure encourages aggressive tactics or claims, it’s hard to claim the sellers went ‘rogue,’” Daffan, the consumer-protection lawyer and former FTC official, told Hunterbrook. “You could be ratifying the conduct by reaping the profits.”

Ethos, FFL, GFI, Equis, and Experior did not provide any comment as of the time of this publication.

AUTHORS

Jenny Ahn joined Hunterbrook after serving many years as a senior analyst in the US government. She is a seasoned geopolitical expert with a particular focus on the Asia-Pacific and has diverse overseas experience. She has an M.A. in International Affairs from Yale and a B.S. in International Relations from Stanford. Jenny is based in Virginia.

Michelle Cera trained as a sociologist specializing in digital ethnography and pedagogy. She completed her PhD in Sociology at New York University, building on her Bachelor of Arts degree with Highest Honors from the University of California, Berkeley. She has also served as a Workshop Coordinator at NYU’s Anthropology and Sociology Departments, fostering interdisciplinary collaboration and innovative research methodologies.

Ruth Reader has spent more than a decade reporting on the business and politics of technology and healthcare. Many of her stories concern how technology impacts American life and wellbeing, including how social media and artificial intelligence are affecting young people, the grassroots movements that have emerged to litigate and ultimately safeguard these technologies, and how tech companies influence major policy. She has been a staff reporter at POLITICO, Fast Company, VentureBeat, and Mic.com. She has also written for the late Baltimore City Paper and produced radio and video segments for New York Public Radio, Voice of America in D.C., and CBS Baltimore. She graduated from Columbia College with a bachelors in journalism.

‍EDITORS

Jim Impoco is the award-winning former editor-in-chief of Newsweek who returned the publication to print in 2014. Before that, he was executive editor at Thomson Reuters Digital, Sunday Business Editor at The New York Times, and Assistant Managing Editor at Fortune. Jim, who started his journalism career as a Tokyo-based reporter for The Associated Press and U.S. News & World Report, has a Master’s in Chinese and Japanese History from the University of California at Berkeley.

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

DISCLOSURES

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Authors: Jean Wang, Michelle Cera, Blake Spendley

Editors: Jim Impoco, Vikas Kumar

Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any positions related to this article at the time of publication. Positions may change at any time. Full disclosures on our website.

Meta launched Muse on September 8 as a personal AI agent, marketing it as “a safe, secure, private” assistant built “from the ground up” to handle all your errands. It has since surged to become the No. 1 free iPhone app in the U.S. While early reviews have mostly focused on how Muse handles its users’ own data, an investigation by Hunterbrook Media revealed a darker capability: what the agent can do with other people’s data. Over two days of testing, Hunterbrook found that Muse can be easily prompted to compile dossiers on Facebook and Instagram accounts belonging to members of vulnerable groups – including undocumented immigrants, transgender teachers, poll workers, Iranian dissidents, and women who said they had ordered abortion pills in states with abortion bans. Many of the accounts belonged to private individuals with no public persona. Hunterbrook shared its detailed findings with Meta. The company asked for additional information but has not responded to repeated requests for comment since.

Meta launched Muse on September 8 as a personal AI agent that can send emails, book travel, fill out forms, and make purchases on a user’s behalf. The promise of automated convenience swiftly drove 3.4 million-plus downloads, making Muse the No. 1 free iPhone app in the U.S.

To reassure early adopters, Meta pitched Muse as private by design, running on secure virtual machines and a Sentinel permission agent to police outside internet access. Early coverage of Muse has largely focused on how much of a user’s own data Muse can reach and what it can do with that data.

Yet when asked to profile third parties, a different picture emerged. Using plain language, Hunterbrook reporters asked Muse to compile lists of real Facebook and Instagram accounts across a range of communities: undocumented immigrants, transgender public school teachers, poll workers, pro-Palestinian individuals, pro-Israeli organizations, Iranian dissidents, Chicago drill rapper burners associated with specific gangs, ICE agents, military families planning to move bases, deployed Navy sailors, parents planning to protest against school boards, and women who have accessed or attempted to access abortion pills in states with abortion bans.

Muse complied. The agent delivered lists ranging from 10 to 100 accounts per prompt. Muse determined membership by mining data from its gargantuan social media platforms: Facebook, Instagram, and Threads, including Reels, posts, comments, threads, replies, usernames, bios, and username history. In some cases, it corroborated what it found with web searches, identifying a person’s full name and employer. Many of the accounts belonged to private individuals with no discernible public persona.

In one case, Muse unmasked a person whose name had been kept out of news reports for fear of retaliation and harassment. In another, it tied several pseudonymous accounts to the same person. It also matched a private Instagram account to a real person using usernames and web searches. Its chain of thought, the reasoning it displayed, showed it could look up Instagram users by former usernames.

Muse’s internal safeguards were erratic and easily evaded. In several conversations, it initially declined a request, citing the risks of profiling and harassment. Yet it repeatedly reversed course and executed the exact same search when reporters slightly reworded the prompt — or simply repeated the command as a follow-up in the same chat window. Worse, Muse helpfully offered ways to find members of the group our reporters asked about. Meta’s own AI terms of service prohibit users from using its tools to infringe on privacy rights or conduct surveillance.

To protect the people involved, Hunterbrook is not publishing its prompts or results. It shared them with Meta. It also shared its findings with three privacy experts.

“It’s very terrifying,” said Stevie Glaberson, director of research and advocacy at Georgetown Law’s Privacy Center. “You don’t need any special training to weaponize information in this way … It puts vulnerable people and people who belong in these categories in extreme danger.”

Ari Ezra Waldman, a law professor at the University of California, Irvine, who researches privacy and technology, said that by mining information from disparate sources, Muse destroys the obscurity that shields everyday social media users, “facilitating the identification and facilitating the doxxing of those people.”

Although aggregating someone’s information isn’t necessarily illegal, he said the practice carries “significant ethical baggage,” adding that the details Muse surfaced “gives someone a lot of the tools they need to go physically attack a person.”

Aaron Mackey, free speech and transparency litigation director at the Electronic Frontier Foundation, a digital rights group, said Muse fits a familiar pattern in tech, “where a tool is released that can basically supercharge harms that were already present.”

It was possible to manually search Facebook posts before, he said, but AI tools like Muse let everyday users compile personal information “in ways that aren’t necessarily possible to do at the same scale as before.”

Ordinary Facebook and Instagram users might not consent to their posts being aggregated in ways that could identify them, even if a post is technically public, Mackey said. He gave the example of poll workers: “If Meta came to them and said, ‘What we’d like to do is actually be able to have all of your personal information at the fingertips of someone who is looking for poll workers so that they can create a list’ … I think that person would say, ‘Heck no, that’s not what I want. Don’t do that.’”

“I don’t think they were thinking that in doing so they were giving Meta sort of carte blanche to take this information and then use it and compile it,” Mackey said.

Other popular AI assistants like ChatGPT and Claude cannot efficiently mine Facebook and Instagram data: Meta offers no general search API for users’ posts, and its research tool is limited to vetted academics and nonprofits. Muse’s search results, by contrast, showed that it drew on public posts, comments, replies, summaries and transcripts of Reels for identifying information to compile its lists, then cross-checked identifying details with web searches.

These capabilities aren’t entirely new. Well-resourced actors have long mined public social data, and Facebook’s own Graph Search offered something similar until 2019. But this may be the easiest such tool yet put in ordinary users’ hands: a free chat prompt that can systematically surveil, target, and aggregate personal information of individuals and groups through public Facebook and Instagram posts.

Hunterbrook discovered this capability on Tuesday, September 22, and immediately alerted Meta leadership. We received a response from Meta’s Public Affairs team the next day at 1:52 a.m. asking for more information. We followed up and shared our prompts, but Meta has since not responded to repeated requests for comment.

In the interest of protecting the individuals and vulnerable groups surfaced during our reporting, Hunterbrook will not publicly release the lists of accounts we obtained or the methodology that would enable others to reproduce these searches. Individuals or organizations interested in obtaining more detail about the design of our test may reach out to ideas@hntrbrk.com; Hunterbrook Media will make a case-by-case determination regarding whether and how much of our research to share.

Authors

Jean Wang is a machine learning engineer and data scientist at Hunterbrook Media. Previously, Jean worked on the alternative credit and fixed income desk at Magnetar Capital, studied Math at Yale University, and served as an editor for the Yale Daily News.

Michelle Cera trained as a sociologist specializing in digital ethnography and pedagogy. She completed her PhD in Sociology at New York University, building on her Bachelor of Arts degree with Highest Honors from the University of California, Berkeley. She has also served as a Workshop Coordinator at NYU’s Anthropology and Sociology Departments, fostering interdisciplinary collaboration and innovative research methodologies.

Blake Spendley joined Hunterbrook from the Center for Naval Analyses (CNA), where he led investigations as a Research Specialist for the Marine Corps and US Navy. He built and owns the leading open-source intelligence (OSINT) account on X/Twitter, called @OSINTTechnical (over 1 million followers), which also distributes Hunterbrook Media reporting. His OSINT research has been published in Bloomberg, the Wall Street Journal, and The Economist, among other top business outlets. He has a B.A. in Political Science from USC.

Editors

Jim Impoco is the award-winning former editor-in-chief of Newsweek who returned the publication to print in 2014. Before that, he was executive editor at Thomson Reuters Digital, Sunday Business Editor at The New York Times, and Assistant Managing Editor at Fortune. Jim, who started his journalism career as a Tokyo-based reporter for The Associated Press and U.S. News & World Report, has a Master’s in Chinese and Japanese History from the University of California at Berkeley.

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

LEGAL DISCLAIMER

© 2026 Hunterbrook Media LLC. When using this website, you acknowledge and accept that such usage is solely at your own discretion and risk.

Hunterbrook Media LLC (”Hunterbrook Media”) is an investigative news organization. Hunterbrook Media is affiliated with Hunterbrook Capital LP (”Hunterbrook Capital”), an exempt reporting adviser with the U.S. Securities and Exchange Commission that serves as investment adviser to one or more investment funds. Hunterbrook Media and Hunterbrook Capital are legally separate entities under common control. Hunterbrook Capital’s investment activities support Hunterbrook Media’s journalistic operations. Hunterbrook Capital’s investment performance can be affected by price movements in securities, derivatives, or other financial instruments related to companies covered in Hunterbrook Media’s reporting.

The specific position, if any, held by Hunterbrook Capital at the time of publication is disclosed at the top of this article. Any position or exposure may consist of direct holdings, short sales, options, swaps, other derivatives, or other forms of economic exposure to the securities or issuers discussed herein. Any position held may include equity securities, options, swaps, or other derivative instruments. Consistent with applicable policies and procedures, Hunterbrook Capital may establish, modify, or close positions in covered securities before or after this article is published. Following publication, Hunterbrook Capital will continue transacting in covered securities for an indefinite period and may hold long, short, or no positions at any time thereafter, regardless of any position described at publication. Hunterbrook Media has no obligation to update this article to reflect subsequent changes in Hunterbrook Capital’s positions. Any discussion in this article regarding value, valuation, downside, upside, or potential future stock price reflects Hunterbrook Media’s opinion as of the publication date. Such statements should not be interpreted as price targets and should not be understood to mean that Hunterbrook Capital intends to maintain any position until any particular price, valuation, or outcome is achieved. Hunterbrook Capital may modify, reduce, increase, hedge, or close positions at any time for risk management, portfolio management, liquidity, regulatory, investor, or other business reasons.

Nothing herein constitutes investment advice, a recommendation to buy, hold, or sell any security, or a solicitation to purchase or sell any securities. Hunterbrook Media is not a registered investment adviser in the United States or any other jurisdiction. All information and opinions presented are subject to change without notice.

Hunterbrook Media strives to ensure the accuracy and reliability of the information provided, drawing on sources believed to be trustworthy. Nevertheless, this information is provided “as is” without any guarantee of accuracy, timeliness, completeness, or fitness for any particular purpose. Hunterbrook Media does not guarantee the results obtained from the use of this information, and expressly disclaims any warranty, express or implied, as to accuracy or reliability. You should conduct your own research and seek advice from qualified financial, legal, and tax professionals before making any investment decisions based on information obtained from Hunterbrook Media.

The content provided by Hunterbrook Media does not constitute an offer to sell, nor a solicitation of an offer to purchase, any securities. No securities shall be offered or sold in any jurisdiction where such activities would be contrary to applicable securities laws. Hunterbrook Media authorizes redistribution of these materials, in whole or in part, for non-commercial, informational purposes only, provided that such redistribution includes this notice without alteration. Commercial use or alteration of these materials requires the express written approval of Hunterbrook Media LLC. By accessing this content, you agree to Hunterbrook Media’s Terms of Use.

‍

Authors: Sam Koppelman, Michelle Cera, Matthew Termine

Editor: Vikas Kumar

Based on Hunterbrook Media’s reporting, at the time of publication Hunterbrook Capital is long $INOD. Positions may change at any time. This article is not investment advice or any recommendation. See full disclosures on our website.

Meta’s $200 billion bet on AI has already transformed an obscure New Jersey-based data company called Innodata. Hiring records and former employees reveal how closely the two are connected. Now, amid fears Meta might move away from Innodata after the tech giant’s investment in Scale AI, a new project focused on the “personalization of long-horizon agents” points toward Innodata’s involvement in Muse, which has been No. 1 in Apple’s app store for days.

• Meta is Innodata’s largest customer, according to interviews with former employees, reviews of job postings, even an old short-report. In 2024, Innodata had roughly 400 full-time equivalent employees working on the Meta account, according to a former director. In the years since, that business has expanded.

• In August, amid reported layoffs and fears that its Meta business was beginning to contract, Innodata disclosed a new program focused on “personalization of long-horizon agents” with its largest customer. At the time, it was unclear what this meant. Our reporting indicates that the project could be Muse, though neither company confirmed or denied the deal in response to repeated requests for comment. The size and materiality of this contract were not disclosed.

Hunterbrook Media routinely deploys open-source intelligence to identify tech deals and other secretive partnerships, before the companies involved post a press release. Past articles include Teradyne and Amazon, Datadog and Anthropic, Modine and Google, and Himax and TSMC. Email us at ideas@hntrbrk.com if you identify similar relationships based on publicly available information.

To oversimplify an extremely complex field of research, the two rate-limiting factors for the quality of frontier AI models are: 1) Compute; and 2) Data.

In a world where compute is constrained — where HBM has become the new Birkin; where Jensen has become a first-name-only celebrity; and where data-center protests are proliferating amid eschatological warnings of doom from the technology’s creators — the second part of that equation, the data, has become even more important.

The problem: AI companies have already ingested the low-hanging data. They’ve scraped vast stretches of the internet. They’ve bought and scanned (and allegedly stolen) books, to say nothing of news articles. Now they’re chasing ever more obscure data drops like teenagers on the SNKRS app.

Bro, I got the Spirit Airlines bankruptcy data, you can almost hear the Google procurement guy bragging, after scoring a treasure trove of emails, Teams messages, and spreadsheets last month. Limited edition. Distressed.

The backup bidder for that Spirit bankruptcy data, at $7.5 million, was Mercor, an AI-training startup.

But not everything an AI needs to learn is out there in some bankruptcy estate. Teaching a model to solve a hard problem — or carry out a novel or complicated task — can require fresh material: input from subject-matter experts, worked examples, and simulated situations in which it can practice getting things right.

That demand has helped make companies selling human expertise some of Silicon Valley’s hottest assets. Mercor went from a $250 million valuation in its 2024 Series A to $10 billion in its 2025 Series C — a 40-fold jump — with a rumored $20 billion round around the corner. Other companies in the space, like Turing and Invisible, have become unicorns, too.

Meta made perhaps the biggest bet with its $14.3 billion investment for a 49% stake in Scale AI, a major supplier of training data. The deal also brought Scale’s founder, Alexandr Wang, into Meta to help lead its AI effort.

After months of choppy headlines, Wang’s team finally has a consumer hit. A big one: Muse. Ten days after its launch this month, Muse reached No. 1 on Apple’s U.S. free iPhone app chart, with a 4.9 rating. Yesterday alone, Meta stock gained more than $100 billion (with a b!) of market cap.

Muse is marketed as a personal assistant for everyone. According to Meta, it can remember your preferences, work across your apps, use a browser to carry out tasks and keep going after you close the app. People are eating it up.

“The muse reception has honestly been beyond our biggest dreams,” Wang said on his very active X account, where he posted dozens of times in recent days highlighting the response to Muse.

“someone today said i had the best social team for the muse launch,” Wang boasted. “bruh this is all me out here rawdogging these tweets. i don’t let the corposlops near my tweet cannon.”

He later added a caveat:

Scale, however, is not the only data supplier with a place inside Meta. Another company has spent years helping train Meta’s AI. It isn’t a VC-backed startup. It trades on the Nasdaq. And its latest publicly disclosed assignment sounds an awful lot like the work required to make Muse useful.

But because it’s based in Ridgefield Park, New Jersey not Silicon Valley — and spent decades in obscurity — you probably haven’t heard of it.

It’s called Innodata ($INOD).

Founded in 1988, Innodata spent decades doing the unglamorous work of turning documents into digitized, structured information. Today, alongside that older business, it supplies training material, human judgment, and testing to help AI models improve.

That prospect helped turn a roughly $4 stock in early 2023 into a $121.50 stock at its June closing high. At the center of the transformation was a customer Innodata did not name in its financial statements. By 2025, that customer accounted for approximately $146 million — 58% of the company’s revenue. All available evidence indicates the mystery customer was Meta.

Innodata’s stock has started to slip in recent months, however, in part on fear that Meta might bring more of this kind of work in-house — after its investment in Scale. Why keep paying Innodata if you just bought almost half of a larger competitor? The second-quarter results added fuel to the fire: Innodata’s largest customer’s share of revenue fell by roughly a third, from an estimated $50.5 million to $34.1 million, using the company’s rounded customer-concentration disclosures.The insider selling from Innodata’s executives didn’t help, either. And Glassdoor is full of reviews reporting layoffs throughout 2026. The company’s shares are now back near $57.

Yet interviews with former employees, public hiring records, and the company’s own disclosures point to deep ties with Meta and an ongoing relationship. Innodata personnel have worked closely with Meta’s AI organization across multiple projects for many years, according to former employees. And Innodata’s new assignment from its largest customer — personalizing agents that perform long, complicated tasks — resembles some of the work behind Muse, which might only just be beginning.

In an interview with Hunterbrook Media, one former employee whose work covered new sales and service lines — and who was at Innodata after Meta’s investment in Scale — pushed back on the fear that Scale would displace Innodata. Asked whether Meta had started cutting its outside help after the Scale investment, they said: “If anything, I would say it’s more.”

Switching suppliers could introduce problems that would outweigh the savings, they argued. “What are they going to get? A 5% discount and headaches that they don’t know to anticipate.”

This is also the story Innodata has been telling investors. “With our largest customer, we continue to grow as we diversify into more organizations and more AI workflows and partner with them on their flagship next-generation AI program,” Innodata’s CEO Jack Abuhoff said on the company’s first-quarter 2026 earnings call. Innodata Chief Revenue Officer Rahul Singhal will take over as CEO effective September 30, 2026.

And Meta is no longer driving all of Innodata’s growth. Revenue from a second, unnamed “Big Tech customer” more than doubled in Q2, to roughly $31 million, almost matching the largest account. (It is unclear whether spending will continue at that level.)

Innodata also disclosed in August that it had won another new customer: “one of the fastest-scaling frontier labs.”

The education of a machine

What makes an AI model better: design or data?

In a recently published experiment, Dwarkesh Patel, perhaps AI’s preeminent podcast host, and researcher Jerry Han mixed models and training datasets from different years, pairing old with new to isolate the source of progress. It turned out, according to this study, that an old model trained with new data is more intelligent than a new model trained with old data.

The study involved small models, not Muse, and was limited in its scope, focused on pre-training. But its broader point was powerful and supports a longstanding hypothesis: Advances in training material can be a major source of advances in large language models.

This has been a tailwind for companies like Innodata, which focus on selling datasets to hyperscalers.

Innodata, in particular, has been focused on selling datasets designed for agentic use-cases. “Through our research efforts, we have established an early position in agentic reinforcement learning, one of the most important frontiers in AI development,” the company said in its August 6 press release. It also highlighted “a second program covering reinforcement-learning environments for computer-use agentic tasks.”

What, exactly, does this mean?

Innodata is now building training material for AI that acts instead of just answering questions. The company says its simulated environments teach agents to “reason, recover from errors, and complete complex, long-horizon tasks.” The environments come populated with fictional people, emails, documents and databases — and are deliberately complicated by missing information and conflicting instructions. Think of it as a practice version of the messy digital life an assistant will eventually be asked to manage.

Consider an instruction as simple as “plan my trip to Paris.”

An assistant like Muse might need to check your calendar, compare flights, find a hotel, arrange transportation, and ask for approval before spending your money. Along the way, it might notice that an old email lists dates you have since changed, remember your preference for nonstop flights, and distinguish the restaurant your friend recommended from the one they warned you to avoid. That is the kind of challenge behind Meta’s promise of an assistant that works across applications and remembers what matters to its user.

Some parts have checkable answers: Did the agent select the right dates? Stay within budget? Obtain permission? Innodata says it builds automated checks for those kinds of outcomes. But other decisions depend on judgment. Is saving $100 worth a six-hour layover? Does “somewhere lively” mean a neighborhood full of restaurants — or a room above a nightclub? A reservation can be perfectly valid and still be a terrible choice. The challenge is not merely teaching the assistant to book a trip. It is teaching it to understand what a good trip means to the person asking.

That is where human judgment becomes training data. Innodata says its reviewers score AI responses and explain their mistakes, following guidelines intended to “objectify subjectivity.”

In a travel exercise, a reviewer might favor an answer that respects the traveler’s stated priorities — or asks a necessary question — over one that confidently picks the cheapest option. Those comparisons can help developers teach models which responses to favor, rather than simply which facts to recite.

For a company like Meta, the potential value is an assistant that learns when to act, when to ask, and when mission accomplished is not quite the same as a job well done.

Whether this agent-focused business becomes a large, durable profit stream for Innodata remains to be seen.

For Innodata, the opportunity is not a royalty on every Muse download. It is the possibility that a product Meta keeps improving will require repeated rounds of training material, testing and human feedback. Innodata’s newly disclosed assignment appears closely aligned with that work. But the company has not disclosed the program’s size, duration or profitability, and new work could partly replace older assignments rather than add to them.

Innodata certainly still has questions to answer. One former employee who spoke to Hunterbrook likened Innodata to the taxi industry — up against more modern Silicon Valley counterparts they compared to Uber.

Short sellers, including Wolfpack Research and J Capital, have issued skeptical reports regarding Innodata’s AI capabilities and the size of its customer agreements. The company also faced investigations by both the Department of Justice and the SEC, but disclosed in June 2025 that both inquiries had been closed without enforcement action.

All of which is to say: Innodata is not without hair on it, especially during a year when company executives have sold shares hand over fist.

And the path ahead may not be a straight line. Management has left open the possibility of a quarter-over-quarter revenue deceleration. “Within the constraints of our business model, it’s certainly possible,” Innodata’s CEO said on its most recent earnings call.

But to the extent Innodata’s destiny is tied to the success of Meta’s AI platform, this has been a big week for the company — even if its involvement in Muse has yet to be confirmed … or denied.

Neither Innodata nor Meta answered Hunterbrook’s questions.

Muse, itself, was no more helpful when asked by a Hunterbrook reporter whether Innodata played any role in training it.

“If Meta used outside vendors on Muse, that would be a question for Meta’s privacy sources: the Privacy Center and the Muse Privacy Policy,” Muse wrote.

Muse added: “What the docs do say is that your conversations can be reviewed by Meta and used to improve AI unless you opt out in Settings → Data Controls.”

Whether those reviews are being led by Meta on its own — or involve outside vendors like Innodata too — remains to be seen.

Authors

Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life. Sam is based in New York City.

Michelle Cera trained as a sociologist specializing in digital ethnography and pedagogy. She completed her PhD in Sociology at New York University, building on her Bachelor of Arts degree with Highest Honors from the University of California, Berkeley. She has also served as a Workshop Coordinator at NYU’s Anthropology and Sociology Departments, fostering interdisciplinary collaboration and innovative research methodologies.

Matthew Termine is a former corporate lawyer with significant experience advising companies operating within regulated industries. Matt led Hunterbrook’s investigation and reporting on United Wholesale Mortgage. In 2017, Matt was credited by the Wall Street Journal, among others, for identifying suspicious mortgage loan transactions that led to several successful criminal prosecutions, including that of a prominent political operative and the chief executive officer of a federally chartered bank. He is a graduate of Trinity College and Fordham University School of Law.

Editor

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

LEGAL DISCLAIMER

© 2026 Hunterbrook Media LLC. When using this website, you acknowledge and accept that such usage is solely at your own discretion and risk.

Hunterbrook Media LLC (”Hunterbrook Media”) is an investigative news organization. Hunterbrook Media is affiliated with Hunterbrook Capital LP (”Hunterbrook Capital”), an exempt reporting adviser with the U.S. Securities and Exchange Commission that serves as investment adviser to one or more investment funds. Hunterbrook Media and Hunterbrook Capital are legally separate entities under common control. Hunterbrook Capital’s investment activities support Hunterbrook Media’s journalistic operations. Hunterbrook Capital’s investment performance can be affected by price movements in securities, derivatives, or other financial instruments related to companies covered in Hunterbrook Media’s reporting.

The specific position, if any, held by Hunterbrook Capital at the time of publication is disclosed at the top of this article. Any position or exposure may consist of direct holdings, short sales, options, swaps, other derivatives, or other forms of economic exposure to the securities or issuers discussed herein. Any position held may include equity securities, options, swaps, or other derivative instruments. Consistent with applicable policies and procedures, Hunterbrook Capital may establish, modify, or close positions in covered securities before or after this article is published. Following publication, Hunterbrook Capital will continue transacting in covered securities for an indefinite period and may hold long, short, or no positions at any time thereafter, regardless of any position described at publication. Hunterbrook Media has no obligation to update this article to reflect subsequent changes in Hunterbrook Capital’s positions. Any discussion in this article regarding value, valuation, downside, upside, or potential future stock price reflects Hunterbrook Media’s opinion as of the publication date. Such statements should not be interpreted as price targets and should not be understood to mean that Hunterbrook Capital intends to maintain any position until any particular price, valuation, or outcome is achieved. Hunterbrook Capital may modify, reduce, increase, hedge, or close positions at any time for risk management, portfolio management, liquidity, regulatory, investor, or other business reasons.

Nothing herein constitutes investment advice, a recommendation to buy, hold, or sell any security, or a solicitation to purchase or sell any securities. Hunterbrook Media is not a registered investment adviser in the United States or any other jurisdiction. All information and opinions presented are subject to change without notice.

Hunterbrook Media strives to ensure the accuracy and reliability of the information provided, drawing on sources believed to be trustworthy. Nevertheless, this information is provided “as is” without any guarantee of accuracy, timeliness, completeness, or fitness for any particular purpose. Hunterbrook Media does not guarantee the results obtained from the use of this information, and expressly disclaims any warranty, express or implied, as to accuracy or reliability. You should conduct your own research and seek advice from qualified financial, legal, and tax professionals before making any investment decisions based on information obtained from Hunterbrook Media.

The content provided by Hunterbrook Media does not constitute an offer to sell, nor a solicitation of an offer to purchase, any securities. No securities shall be offered or sold in any jurisdiction where such activities would be contrary to applicable securities laws. Hunterbrook Media authorizes redistribution of these materials, in whole or in part, for non-commercial, informational purposes only, provided that such redistribution includes this notice without alteration. Commercial use or alteration of these materials requires the express written approval of Hunterbrook Media LLC. By accessing this content, you agree to Hunterbrook Media’s Terms of Use.

‍

BY: Jenny Ahn, Michelle Cera

EDITOR: Vikas Kumar

Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any positions related to this article at the time of publication. Positions may change at any time. Full disclosures on our website.

Ethos Technologies ($LIFE) is one of the hot stories in insurtech. The company’s shares have more than doubled since its January IPO. Ethos’ pitch to investors: Ethos is “democratizing” life insurance through an AI-based “100% digital application and underwriting process” that makes getting life insurance a breeze.

Ethos isn’t an insurance carrier. It earns commissions selling policies on behalf of carriers, both directly to consumers through its digital platform and through third-party agents. And the third-party distribution channel’s share of the company’s overall revenue has risen every year since 2023. In the most recent quarter, the third-party channel accounted for approximately 39% of the company’s revenue, according to its quarterly filing.1

On September 10, a Hunterbrook Media journalist attended the Ignyte Fall 2026 Sales Conference in Fort Lauderdale, a training conference held by Family First Life (FFL).

FFL is a multilevel marketing company that sells life insurance policies for Ethos and other insurance carriers, mostly the old-fashioned way: through phone calls. At the conference, FFL President Shawn Meaike lined his insurance partners up onstage during a session called the “carrier panel,” from what he called the “weakest” to the “strongest,” with three Ethos representatives at the weak end.

Then he made them apologize.

“Why don’t you just start by saying you’re sorry?” Meaike said, cutting off Ethos strategic account manager Dylan Cummings, who had opened his speech by calling the past few months “among the most unique summers” of his insurance career.

“Seriously, why don’t you start by saying, ‘We have a carrier we do business with that shut down. We can’t get — Guys, I’m mother freaking sorry,’” Meaike continued.

“I’m more than a little sorry about the experience that you guys have had with Ethos this summer,” Cummings said.

FFL is not a minor partner for Ethos. A Hunterbrook analysis of what Ethos calls “microsites” — personalized sites given to its third-party agents — suggests that FFL has the most agents onboarded with Ethos of any third-party distributor it works with. Based on the publicly available data, about 42% of an estimated 178,000 agents with active Ethos microsites are affiliated with FFL, nearly twice the number of those estimated for the next-largest partner agency.

The top three agencies by our head count make up about 70% of the total agents with microsites, which is consistent with Ethos’s revenue breakdown: In its 2025 10-K, Ethos said 31% of total revenue came from just “three of our most significant agency relationships.” That means roughly 84% of the channel comes from three distributors.

So why did Ethos’s biggest distributor rank it last?

“I can’t get the carrier. The website’s shut down. And they won’t do anything. And they just have this notation on there that says that they’re not going to get back to me. What do I do?” Meaike said onstage, mimicking the complaints from FFL agents.

Meaike was referring to a system outage at TruStage, one of Ethos’ three largest carriers. TruStage announced it had suffered a “particularly broad attack on our network and systems” on July 11, requiring the company to take its network offline, according to the carrier’s website.

TruStage is Ethos’ “biggest carrier,” and on the brokerage side, “it’s by far our base product,” Cummings later told a group of FFL agents and the Hunterbrook reporter on the sidelines of the conference.

In its 10-Q for the second quarter of 2026, the company disclosed that 88% of its revenue came from three carriers, which included TruStage.

Beyond the strained relationship with one of its biggest distributors, Ethos likely took a financial hit from the TruStage outage, in three ways.

The first is the lost renewal commission on the policy lapses. As a result of the outage, TruStage “did not draft a premium” on a “bunch of” existing policies, Cummings claimed, leading to “a lot of policy lapses.” Cummings said Ethos saw 15% more lapses than “we normally would.”

Ethos recognizes future renewal commissions based on an estimated persistency rate, which predicts how many policies will stay in force. If policies lapsed faster than that rate due to the outage, as Cummings’s account suggests, Ethos may have to reverse previously booked revenue.

The second is the cost of forgiving chargebacks. When third-party agents write a new policy, Ethos advances the commission it expects to earn from that policy, typically for six to nine months, according to Ethos agents at the conference. If the policy lapses before then, Ethos claws back the commission from the agent, according to its 2Q26 10-Q filing.

Because TruStage couldn’t collect monthly payments from its policyholders, policies lapsed, triggering chargebacks to agents who had written policies within the advance window. Ethos agreed to forgive 50% of the chargebacks, Cummings told a small group at the event. Ethos has not responded to Hunterbrook’s request to confirm this or explain how, or whether, that cost is being shared with TruStage.

The third is potential lost sales, in both the direct and third-party channels, although when questioned about that, Cummings denied that there was any meaningful interruption. He characterized the outage as “actually a good thing”, because it would allow Ethos to get more involved in, and improve, certain aspects of TruStage’s new business processing. TruStage did not respond to Hunterbrook’s request to confirm this point.

But two months after the cyberattack, things still appeared shaky. After the panel, a crowd of FFL agents gathered around the Ethos reps, seeking answers about their chargebacks and asking when TruStage’s system would be fully back online.

TruStage’s own recovery page doesn’t give a date. As of September 11, it described policy management and payment servicing as “partially available,” with restoration still underway.

Meaike also appeared unconvinced by the Ethos representatives’ statements on stage. “If you want to bet me that they move up — and I love to gamble — they have no shot to move up. And I mean none,” he said, referring to the stage lineup.

“If the people that were servicing you and the clients cared more, the problem will be fixed, but it ain’t,” Meaike said.

Whether Meaike’s onstage statements were theatrics or a genuine verdict on the relationship remains to be seen. After “betting” that Ethos had no shot at moving up, Meaike seemed to have softened his tone by the end of the panel: “If you believe it, Dylan, then I believe y’all.” FFL writes more policies for Ethos than for any other company besides Americo, according to Cummings.

But Ethos’s days as a leading technology-forward partner for FFL may be numbered. Meaike highlighted another partner, Instabrain, as a new favorite, saying he brought it on precisely because it can do everything Ethos does. Instabrain advertises an AI-based insurance sales platform promising “No exam. No waiting” and “a real decision in minutes,” a pitch nearly identical to Ethos’s.

TruStage told Hunterbrook that it continues “to work collaboratively to support customers and facilitate business operations.” Ethos and Family First Life did not respond to requests for comment. InstaBrain declined to comment.

AUTHORS

Jenny Ahn joined Hunterbrook after serving many years as a senior analyst in the US government. She is a seasoned geopolitical expert with a particular focus on the Asia-Pacific and has diverse overseas experience. She has an M.A. in International Affairs from Yale and a B.S. in International Relations from Stanford. Jenny is based in Virginia.

Michelle Cera trained as a sociologist specializing in digital ethnography and pedagogy. She completed her PhD in Sociology at New York University, building on her Bachelor of Arts degree with Highest Honors from the University of California, Berkeley. She has also served as a Workshop Coordinator at NYU’s Anthropology and Sociology Departments, fostering interdisciplinary collaboration and innovative research methodologies.

EDITOR

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

DISCLOSURES

© 2026 Hunterbrook Media LLC. All rights reserved. Use of this website is strictly governed by our Terms of Use. The content herein is furnished on an “AS IS” basis without any form of express or implied warranty. For information regarding our privacy practices, please refer to our Privacy Policy.

Hunterbrook Media LLC (”Hunterbrook Media”) is an investigative news organization. Hunterbrook Media is affiliated with Hunterbrook Capital LP (”Hunterbrook Capital”), an exempt reporting adviser with the U.S. Securities and Exchange Commission that serves as investment adviser to one or more investment funds. Hunterbrook Media and Hunterbrook Capital are legally separate entities under common control. Hunterbrook Capital’s investment activities are one source of funding for Hunterbrook Media’s journalistic operations. Hunterbrook Capital may hold long positions, short positions, positions through derivative instruments including options and swaps, or no position in any security covered or mentioned on this website. Consistent with applicable policies and procedures, Hunterbrook Capital may establish, modify, or close positions in covered securities before or after the publication of any Hunterbrook Media article. Following publication of any article, Hunterbrook Capital will continue transacting in covered securities for an indefinite period and may be long, short, or flat at any time thereafter, regardless of any position described at publication. Hunterbrook Media has no obligation to update any article or disclosure to reflect subsequent changes in Hunterbrook Capital’s positions.

Nothing on this website constitutes investment advice, a recommendation to buy, hold, or sell any security, or a solicitation to purchase or sell any securities. No securities shall be offered or sold in any jurisdiction where such activities would be contrary to applicable securities laws. Hunterbrook Media is not a registered investment adviser in the United States or any other jurisdiction. Nothing herein should be construed as investment advice or a recommendation of any kind. This information should not be relied upon as a substitute for independent research or professional financial, legal, or tax advice.

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The information presented is current as of the date indicated. No representation regarding the completeness or timeliness of this information is made. Some information is sourced from third parties and, while believed to be reliable, has not been independently verified, and its accuracy or completeness is not guaranteed. Hunterbrook Media is not affiliated with any sites linked to this website. Investment in securities and other financial instruments involves significant risk, including the potential loss of principal. Users are advised to conduct their own due diligence and consult professional advisors before engaging in any investment activity. Use of Hunterbrook Media’s content is entirely at the user’s risk. Users shall not use this site for any illegal or prohibited purposes and shall comply with all applicable local, state, national, and international laws and regulations.

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BY: Till Daldrup

EDITORS: Jim Impoco, Vikas Kumar

A contractor behind America’s most expensive transit project per capita has dumped lead-laced soil next to playgrounds and pickleball courts. The toxic dirt is being stockpiled in the middle of some of the city’s poorest, densest neighborhoods. Wipe sampling conducted by Hunterbrook shows contaminated dust from these soil piles may have drifted to nearby residential areas.

Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any positions related to this article at the time of publication. Positions may change at any time. Full disclosures on our website.

Dust swirls up from the ground as a white dump truck releases its cargo, a mix of dirt and rubble, onto the ground. The plume does not dissipate quickly. It lingers in the air, giving the dump site a yellowish hue, like a sepia Instagram filter.

The truck belongs to Nan, Inc., a Hawaii-based construction company and a main contractor on Honolulu’s Skyline, the first fully driverless urban rail transit system in the U.S. and one of the most expensive mass-transit megaprojects per capita worldwide. This dumping site is one of several stockpiling points where Nan stores the soil it digs up during construction. It sits at the southern tip of Ke’ehi Lagoon Beach Park, a public green space with a baseball field, picnic benches and a playground barely four miles from downtown Honolulu. Satellite images reviewed by Hunterbrook show that soil has been stored here since at least January 2024.

This is the dirty secret beneath Hawaii’s signature infrastructure achievement. The push to complete Skyline has unsealed a century’s worth of buried industrial toxins, turning working-class recreational hubs and residential streets into open-air dumping grounds. While city officials champion a green transit future, state regulators have tolerated persistent reporting lapses, missed oversight deadlines, and unlined, uncovered dirt piles.

When Hunterbrook visited this site in June, people played pickleball on a nearby court, while a frontloader and an excavator piled up the dirt, some of the uncovered heaps more than 10 feet tall.

The soil here looks like any other, but some of these piles may contain high levels of hazardous contaminants, including lead, arsenic and barium, according to incident reports on Hawaii’s Hazard Evaluation & Emergency Response (HEER) Office’s spill database.

Dust particles from these toxic soil piles may be dispersing to nearby residential and recreational areas, where people might come in contact with them, environmental testing conducted by Hunterbrook shows: Dust wipe samples collected near two stockpiling sites and one construction site in July found lead levels above the EPA’s safety limit for residential floors at seven of nine locations. One sample measured 530 micrograms per square foot, more than 100 times that benchmark.

Lead accumulates in bones and soft tissue, with skeletal stores persisting for decades. In children, even low levels are associated with reduced IQ, developmental delays, and learning and behavioral problems. The CDC and WHO state there is no known safe blood lead level for children, and the neurological damage is largely irreversible. In adults, chronic exposure is linked to hypertension, cardiovascular disease, kidney damage, peripheral neuropathy, cognitive decline, reduced fertility, and increased miscarriage risk.

When asked about the stockpiling sites and elevated lead levels near them, the Honolulu Authority for Rapid Transportation (HART) said that soil exceeding environmental action levels “has been encountered in portions of the project corridor.”

“Contaminated soil was managed at the Keʻehi Lagoon in a secured yard under [Hawaii State Department of Health] oversight. The material was stockpiled, characterized, and managed, with ongoing coordination between HART and HDOH regarding its handling, disposition, and reporting requirements,” a HART representative told Hunterbrook in a written statement.

Nan Inc., the Hawaii State Department of Health and the City and County of Honolulu did not respond to a request for comment.

THE GHOSTS OF HONOLULU’S PAST

City and state officials knew early on that they were digging into a buried ecological minefield when they mapped Skyline’s route along the industrial waterfront.

“If not managed safely, excavation of contaminated soils and redevelopment of contaminated properties can put construction workers, future property users and local communities at risk,” a page on HEER’s website reads. The office sits within the Hawaii State Department of Health.

The concern: The soil along the path of the new HART rail line is contaminated with various hazardous pollutants, including lead, arsenic and barium.

Two segments, leading from Kualaka‘i Parkway in the suburbs west of Honolulu to the Kalihi Transit Center east of the airport, are already open. The first section launched in 2023, and the second opened last year. The new extension, which cuts through dense neighborhoods along Dillingham Boulevard and Nimitz Highway in downtown Honolulu, is currently under construction and is supposed to start operating in 2031.

Hidden in the soil underneath this segment is a toxic cocktail, remnants of various historical industrial facilities in the heart of the city: a manufactured gas plant. A former Navy fuel drumming site and laundry facility. A network of former petroleum pipelines, some of them dating back to the early 1900s. Dredge spoils from harbor channels and debris from two Chinatown fires in 1886 and 1900 were also used to raise the ground level in this area.

Regulators were well aware that decades of industrial soot and toxic ash could be brought back to the surface the moment heavy excavation began.
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“The HEER Office has been working with the Honolulu Authority for Rapid Transportation (HART) to help them identify properties with contamination or potential contamination within or near the 20-mile rail line and proactively manage all encountered and/or generated media,” the HEER website says.

Entries on HEER’s spill database show that construction crews started encountering highly contaminated soil during excavation work as early as January 2023. A Hunterbrook review of the database identified at least 26 incident reports since then that show that stockpiled soil excavated for rail line construction had high levels of environmental pollutants like lead, arsenic or petroleum.

Lead levels were as high as 2,900 milligrams per kilogram of soil. That’s more than 14 times Hawaii’s safety threshold for residential soil. At that level, the trace amounts of soil and dust a child between the ages of two and six typically swallows in a day of normal play (60 to 200 milligrams, according to the EPA’s estimates) would contain more than 70 times the FDA’s maximum daily lead intake level for children.

HART’s 2014 Programmatic Environmental Hazard Evaluation and Environmental Hazard Management Plan for the transit project gives a detailed overview of how the toxic soil is supposed to be handled.
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Due to the historical industrial activities in the area, “surficial soils should be considered as potentially contaminated,” the document says. HEER must be notified 30 days before work in suspect areas, and immediately if unexpected contamination is found. All excavated soil is tracked to its final location and reported.
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Environmental personnel must screen excavated dirt visually, by odor, and with quick field tests. If the soil is deemed contaminated, it’s supposed to be separated from clean soil, labeled, placed on liners in piles, covered with anchored waterproof sheeting and inspected daily.
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Incident reports in HEER’s spill database show a weekslong delay between soil being sampled and elevated contaminant levels being flagged to regulators in at least four cases. In one incident, stockpiles were sampled in June and July 2025, but the lead results weren’t reported to the Department of Health until December 8, 2025, a roughly five-month gap.

“In some instances, reports were submitted weeks or months after samples were collected. Sample collection is only one step in the evaluation process, and laboratory analysis, data review, and coordination regarding soil management and disposal may be required before reporting is completed,” a HART spokesperson told Hunterbrook.

When Hunterbrook visited the stockpiling site at Ke’ehi Lagoon Beach Park, a dump truck transported an uncovered load of what appeared to be construction debris. It’s unclear whether the dirt on the truck had been tested for potential contamination. The soil piles at the park stockpiling site were also uncovered.

According to several spill database reports, contaminated soil piles are sent to a landfill outside of Honolulu for final disposal.

THE POSSIBLE HEALTH IMPACTS

Hunterbrook conducted wipe sampling near two soil stockpiling sites and one rail line construction area in Honolulu in July. Seven out of nine samples came back with lead levels above an EPA safety limit for residential floors. Dust-lead action levels “are used to determine both when EPA recommends abatement work and when an abatement can be considered complete,” according to the agency.

The EPA also has a separate standard for a “dust-lead hazard,” which is defined as “surface dust in a residential dwelling or child-occupied facility that contains a mass-per-area concentration of any reportable level of lead for floors or for interior window sills based on wipe samples.” That means any lead level that can be detected by a certified lab is considered hazardous by the agency.

While these safety standards were set for indoor areas, Hunterbrook’s test results for locations near stockpiling sites are still concerning, experts said.

“The same kind of health standard can easily apply to outdoor samples,” Gabriel Filippelli, Chancellor’s Professor of Earth Sciences and Executive Director of the Indiana University Environmental Resilience Institute, told Hunterbrook. “I would worry if I had those values in a public area.”

It’s unclear whether the elevated lead levels in the wipe samples were indeed caused by stockpile dust dispersing to nearby areas. But two background samples that were collected farther away from the stockpiling and construction sites came back below the EPA dust-lead action level.

Regular lead exposure can have detrimental health impacts and is especially dangerous for toddlers and elementary-school-age children.
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“Poor school performance, poor memory, and poorer economic outcomes than populations who are not exposed,” Filippelli said, listing several potential consequences of early childhood lead exposure. “It’s a time of really rapid neurological development and if there’s a neurotoxin in the way, then the neurons in their brains don’t form right.”

That’s why experts recommend covering contaminated soil with tarps or clean soil and setting up dust fences around stockpiling areas to limit possible exposure. Or simply not storing toxic dirt near residential or recreational areas at all.

“It’s a bit peculiar to me to store contaminated soil in residential areas or in a park,” a former regulator with the U.S. Department of Housing and Urban Development told Hunterbrook. “I’m just stating the obvious here.”

Yet along the Dillingham corridor, the obvious seems to be ignored. And as Nan, Inc.’s excavators grind ahead toward a 2031 finish, the dust keeps rising over Ke’ehi Lagoon.

AUTHOR

Till Daldrup is an investigative journalist who joined Hunterbrook from The Wall Street Journal, where he focused on open-source investigations and content verification. In 2023, he was part of a team of reporters who won a Gerald Loeb Award for an investigation that revealed how Russia is stealing grain from occupied parts of Ukraine. He has an M.A. in Journalism from New York University and a B.S. in Social Sciences from University of Cologne. He’s also an alum of the Cologne School of Journalism (Kölner Journalistenschule).

EDITORS

Jim Impoco is the award-winning former editor-in-chief of Newsweek who returned the publication to print in 2014. Before that, he was executive editor at Thomson Reuters Digital, Sunday Business Editor at The New York Times, and Assistant Managing Editor at Fortune. Jim, who started his journalism career as a Tokyo-based reporter for The Associated Press and U.S. News & World Report, has a Master’s in Chinese and Japanese History from the University of California at Berkeley.

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

Coby Werlin contributed reporting.

Hunterbrook Media publishes investigative and global reporting — with no ads or paywalls. When articles do not include Material Non-Public Information (MNPI), or “insider info,” they may be provided to our affiliate Hunterbrook Capital, an investment firm which may take financial positions based on our reporting. Subscribe here. Learn more here.

Please contact ideas@hntrbrk.com to share ideas, talent@hntrbrk.com for work opportunities, and press@hntrbrk.com for media inquiries.

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DISCLOSURES

© 2026 Hunterbrook Media LLC. All rights reserved. Use of this website is strictly governed by our Terms of Use. The content herein is furnished on an “AS IS” basis without any form of express or implied warranty. For information regarding our privacy practices, please refer to our Privacy Policy.

Hunterbrook Media LLC (”Hunterbrook Media”) is an investigative news organization. Hunterbrook Media is affiliated with Hunterbrook Capital LP (”Hunterbrook Capital”), an exempt reporting adviser with the U.S. Securities and Exchange Commission that serves as investment adviser to one or more investment funds. Hunterbrook Media and Hunterbrook Capital are legally separate entities under common control. Hunterbrook Capital’s investment activities are one source of funding for Hunterbrook Media’s journalistic operations. Hunterbrook Capital may hold long positions, short positions, positions through derivative instruments including options and swaps, or no position in any security covered or mentioned on this website. Consistent with applicable policies and procedures, Hunterbrook Capital may establish, modify, or close positions in covered securities before or after the publication of any Hunterbrook Media article. Following publication of any article, Hunterbrook Capital will continue transacting in covered securities for an indefinite period and may be long, short, or flat at any time thereafter, regardless of any position described at publication. Hunterbrook Media has no obligation to update any article or disclosure to reflect subsequent changes in Hunterbrook Capital’s positions.

Nothing on this website constitutes investment advice, a recommendation to buy, hold, or sell any security, or a solicitation to purchase or sell any securities. No securities shall be offered or sold in any jurisdiction where such activities would be contrary to applicable securities laws. Hunterbrook Media is not a registered investment adviser in the United States or any other jurisdiction. Nothing herein should be construed as investment advice or a recommendation of any kind. This information should not be relied upon as a substitute for independent research or professional financial, legal, or tax advice.

This website may feature forward-looking statements reflecting Hunterbrook Media’s current views. Such statements, identifiable by terms including but not limited to “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “should,” and “will,” are inherently speculative and subject to risks and uncertainties. Actual results or outcomes may substantially deviate from those projected. Hunterbrook Media expressly disclaims any obligation to update or revise any forward-looking statements, regardless of subsequent developments or new information.

The information presented is current as of the date indicated. No representation regarding the completeness or timeliness of this information is made. Some information is sourced from third parties and, while believed to be reliable, has not been independently verified, and its accuracy or completeness is not guaranteed. Hunterbrook Media is not affiliated with any sites linked to this website. Investment in securities and other financial instruments involves significant risk, including the potential loss of principal. Users are advised to conduct their own due diligence and consult professional advisors before engaging in any investment activity. Use of Hunterbrook Media’s content is entirely at the user’s risk. Users shall not use this site for any illegal or prohibited purposes and shall comply with all applicable local, state, national, and international laws and regulations.

Should any provision of these Terms of Use be adjudged invalid or unenforceable, the remaining provisions shall remain in full force and effect. Trademarks contained in links to third-party websites belong to their respective owners. Hunterbrook Media retains copyright on all text, content, graphics, and trademarks displayed on this site.

BY: JD Jean-Jacques, Matthew Termine, Sam Koppelman

EDITOR: Vikas Kumar

As prosecutors probe Mark Walter’s empire for undisclosed related party transactions, Hunterbrook has found eyebrow-raising transactions at EquiTrust, the life insurer Magic Johnson purchased from Guggenheim.

A review of primary source documents identified a series of investments and loans linking EquiTrust to Johnson’s infrastructure funds and his Dodgers ownership stake. The insurer reported the positions as unaffiliated.

Last year, as the feds circled, EquiTrust was sold to another insurance group connected to Walter: Amistad, now a focus of the DOJ’s investigation.

But it’s unclear whether Johnson is still involved.

Amistad’s “managing founder” is EquiTrust CEO Eric Holoman, who was previously the president of Magic Johnson Enterprises and is governor of the Sparks.

No wrongdoing has been established. Asked to comment, Johnson, Holoman, EquiTrust, and others did not reply.

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Pablo Torre of Pablo Torre Finds Out contributed reporting.

Based on Hunterbrook Media’s reporting, at the time of publication Hunterbrook Capital is short bonds issued by Sammons Financial Group and short $GOF. Positions may change at any time. This article is not investment advice or any recommendation. See full disclosures on our website.

If one person can be credited with the assist on Magic Johnson becoming a billionaire, it may be Mark Walter.

Johnson earned about $40 million during his NBA career. He built a successful business with theater, restaurant, and healthcare assets under the banner of Magic Johnson Enterprises. But when Forbes declared him a billionaire in 2023, it attributed most of his fortune to one investment: EquiTrust Life Insurance Company.

EquiTrust was not a classic Magic Johnson business. It sells annuities and life insurance to ordinary Americans, then invests their premiums to meet promises that could stretch decades into the future.

Johnson bought control of it from the same group that brought him into baseball: Guggenheim Partners, the firm co-founded and run by Dodgers and Lakers owner Mark Walter. Guggenheim continued managing EquiTrust’s investments after the sale.

That history is suddenly … pretty interesting!

Federal prosecutors and the Securities and Exchange Commission are examining whether Walter or his companies improperly failed to disclose that billions of dollars in insurance money were loaned to other businesses Walter controlled, according to The Wall Street Journal. TWG Global, Walter’s holding company, said it “acted in good faith.”

The investigation reportedly began centered on two Walter-controlled life insurers: Delaware Life and Clear Spring Life & Annuity. Then, The Wall Street Journal reported that four intermediary entities are also under scrutiny: ABS Capital, Bradford Allen, Hudson Trading, and Amistad.

Amistad purchased Johnson’s insurer, EquiTrust, last year and is run by Johnson’s longtime business partner, Eric Holoman.

The Journal later reported that EquiTrust lent large sums to vehicles tied to some of the other intermediaries under investigation.

A Hunterbrook Media review of EquiTrust’s statements, insurance statutory filings, and SEC documents found that Johnson’s insurer invested in businesses tied to Johnson and Holoman, EquiTrust’s longtime CEO.

This includes an investment of more than $100 million in JLC Infrastructure, a fund whose principals are Johnson and Holoman. EquiTrust also holds $350 million of debt issued by the television company that has the media rights for the Dodgers, an MLB team co-owned by Johnson and Walter. These positions are listed in EquiTrust’s filings as unaffiliated investments.

That may be appropriate. Ultimately, regulators will need to decide, and Hunterbrook does not have access to complete information. But the stakes of an improper disclosure could be high.

“When you misrepresent whether an entity is affiliated or not, that is serious business, because it’s the only way the regulators can determine if a deal is fair and reasonable,” Tom Gober, a former insurance regulator, told Hunterbrook. “The only way for us to know is if they report it as affiliated. You’re kind of counting on them.”

“It’s my professional opinion that it certainly appears that all of these groups, frankly, EquiTrust, Group 1001 [another Walter insurer], Amistad, I feel like all of those share a common thread that’s greater than just having asset management work at Guggenheim,” he said.

Asked specific questions about their conduct, representatives for Johnson, Holoman, EquiTrust, and others did not reply.

THE DODGERS DEAL

In 2014, EquiTrust acquired $350 million of debt issued by Walter’s American Media Productions (AMP), the company behind SportsNet LA — a television network with a multi-billion-dollar deal for the right to air Dodgers games.

At the time of the loan, Guggenheim owned EquiTrust, but Johnson’s planned purchase of the insurer had been announced.

The network was in trouble: It had launched that February, but the region’s TV providers had refused to pay its asking price, leaving roughly 70% of Los Angeles unable to watch the games. The mayor got involved. It was a whole thing.

Amid this chaos, EquiTrust acquired AMP’s debt.

What makes the deal notable in the context of the federal probe is that Walter and Johnson appear to be on all sides of it. EquiTrust was apparently using policyholder money to finance Walter’s embattled television company, which in turn would pay the team Walter and Johnson owned together.

It’s the kind of ouroboros one might expect to be disclosed to ordinary Americans paying for policies from life insurers like EquiTrust — to say nothing of insurance regulators. (Iowa’s insurance holding company law, for instance, states that material transactions between an insurer and its “affiliates” must be fair, reasonable, and reported so as to “clearly and accurately disclose the precise nature and details of the transactions.”)

But across EquiTrust filings reviewed by Hunterbrook, this transaction was not disclosed as being between related parties.

And according to an analysis from Mispriced Assets author Nick Nemeth, it wasn’t just EquiTrust buying debt from Walter’s television holding company. In total, five insurers tied to Walter reportedly held approximately $1.45 billion of AMP notes.

None of this establishes wrongdoing. Johnson may not have known of or approved the deal, which predated his ownership of EquiTrust. And because Johnson owns just a minority interest in the Dodgers, and does not control the team, this investment may indeed have been properly categorized as unaffiliated. (Perhaps this is a reason Walter sold Johnson the insurer in the first place! Perhaps not!)

But either way, it is an example of how fluidly money seemed to move between the various organizations under the control of the Dodgers’ owners.

And what Hunterbrook is reporting today is that it’s not a one-off.

THE INFRASTRUCTURE DEAL

Johnson, Holoman and others including investment firm Loop Capital manage a fund called JLC Infrastructure, which invests in utilities and transportation assets.

A document filed with the SEC put the first capital raised for JLC Infrastructure Fund I on July 27, 2017.

Just days later, on August 3, 2017, EquiTrust, which was then owned by Johnson with Holoman as its CEO, invested in JLC Fund I. That investment had a carrying value of $100.5 million in the insurer’s 2025 annual statement.

A week after that, a Walter insurer, Delaware Life (a focus of the Department of Justice’s probe), invested in JLC Infrastructure. Its stake was worth $80.5 million as of December 2025.

Neither EquiTrust nor Delaware Life seems to label these investments as affiliated in any of the many filings reviewed by Hunterbrook.

Nor does Clear Spring Life & Annuity, another Walter insurer under scrutiny that invested in JLC Infrastructure in 2020. Its investment had a fair value of just over $100 million as of 2025, similar to EquiTrust’s.

Together, the three insurers reported around $280 million in JLC Fund I positions, an amount equal to almost two-thirds of the fund’s $423.9 million gross asset value in JLC’s Form ADV SEC filing.

Perhaps more striking, that same Form ADV reports that the fund’s manager and its “related persons” are beneficial owners of just 1% of it. Yet EquiTrust, which shares management and ownership with JLC, has a stake equal to roughly 24% of the entire fund.

Should any of these investments be disclosed as related party transactions?

That’s for regulators to decide.

What’s clear: The same Johnson-controlled trust appeared in the ownership chains of both EquiTrust and JLC.

In a 2026 Form ADV, JLC’s manager is listed as 25% to 50% owned by JP3 LLC — an entity that is itself listed as at least 75% owned by the June Bug Lifetime Trust, whose trustee is listed as “Johnson, Earvin” and identified as a “control person.”

EquiTrust’s filing through year-end 2024 identifies the same June Bug trust as the sole owner of the entity through which Johnson controlled the insurer.

Holoman appears to have ended up on both sides, too. The Form ADV says his Presidio Capital Holdings owned 10% to 25% of JLC’s manager. He had been appointed chief executive of EquiTrust by April 2017, before Fund I made its first sale.

On the JLC side, the overlap wasn’t entirely hidden from investors. Its disclosure brochure said that Johnson owned a controlling interest in EquiTrust and that Holoman was simultaneously a JLC managing director and EquiTrust’s president and chief executive.

But just by reading EquiTrust’s statutory filing, you would have no idea that Johnson and Holoman were on both sides of the transaction. EquiTrust’s 2025 annual statement placed the JLC positions in the unaffiliated section and reported no affiliated invested assets in the relevant totals.

MAGIC’S CLOSEST BUSINESS PARTNER BUYS THE INSURER

Last year, EquiTrust was sold to Amistad, one of the companies reportedly caught up in the DOJ investigation.

Amistad’s managing founder is Holoman, who used to run Magic Johnson Enterprises and has been Johnson’s longtime business partner, including as governor of the WNBA’s Los Angeles Sparks and as his partner in JLC Infrastructure.

The deal appears to have been debt-financed.

Fitch said Amistad and its affiliates emerged from the transaction with approximately $3 billion of debt, replacing an unlevered ownership structure. S&P expects that debt to be serviced primarily through EquiTrust’s own dividends or earnings. Both agencies assigned negative outlooks, indicating Amistad may have had inadequate cash flows to finance the deal on its own.

Whether the transaction freed Johnson of his EquiTrust exposure is unclear.

Fitch says former majority shareholders in EquiTrust retained minority interests in Amistad, whose ownership is now dispersed so that no shareholder owns more than 10%. It does not identify who these shareholders were. Asked directly whether Johnson has shares in Amistad, his representatives did not respond to repeated requests for comment.

But Johnson and Holoman appear to remain close.

In November 2025, around the time of EquiTrust’s sale to Amistad, the two of them hung out in both Las Vegas and Madrid.

A couple of months prior, they went to a USC football game together.

And earlier in the year, Johnson took Holoman with him to the White House when he received the Presidential Medal of Freedom.

That wasn’t the only time the two visited 1600 Pennsylvania Avenue.

A decade earlier, on February 27, 2014, during the Obama administration, Johnson posted to X: “Hanging out at the White House with Eric Holoman my business partner and president of my company @MagicJEnt!”

That was the same year news broke that Johnson would be buying EquiTrust.

AUTHOR

JD Jean-Jacques joined Hunterbrook from Goldman Sachs, where he worked as an investment banker. He was editor-in-chief of Howard University’s newspaper, The Hilltop, and wrote for The Exonian at Phillips Exeter Academy. Among other recognitions, JD was a White House Correspondents’ Association Scholar and was named Student Journalist of the Year by The National Association of Black Journalists. He graduated from Howard with a B.A. in history.

Matthew Termine is a former corporate lawyer with significant experience advising companies operating within regulated industries. Matt led Hunterbrook’s investigation and reporting on United Wholesale Mortgage. In 2017, Matt was credited by the Wall Street Journal, among others, for identifying suspicious mortgage loan transactions that led to several successful criminal prosecutions, including that of a prominent political operative and the chief executive officer of a federally chartered bank. He is a graduate of Trinity College and Fordham University School of Law.

Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life. Sam is based in New York City.

EDITOR

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

DISCLOSURES

© 2026 Hunterbrook Media LLC. All rights reserved. Use of this website is strictly governed by our Terms of Use. The content herein is furnished on an “AS IS” basis without any form of express or implied warranty. For information regarding our privacy practices, please refer to our Privacy Policy.

Hunterbrook Media LLC (”Hunterbrook Media”) is an investigative news organization. Hunterbrook Media is affiliated with Hunterbrook Capital LP (”Hunterbrook Capital”), an exempt reporting adviser with the U.S. Securities and Exchange Commission that serves as investment adviser to one or more investment funds. Hunterbrook Media and Hunterbrook Capital are legally separate entities under common control. Hunterbrook Capital’s investment activities are one source of funding for Hunterbrook Media’s journalistic operations. Hunterbrook Capital may hold long positions, short positions, positions through derivative instruments including options and swaps, or no position in any security covered or mentioned on this website. Consistent with applicable policies and procedures, Hunterbrook Capital may establish, modify, or close positions in covered securities before or after the publication of any Hunterbrook Media article. Following publication of any article, Hunterbrook Capital will continue transacting in covered securities for an indefinite period and may be long, short, or flat at any time thereafter, regardless of any position described at publication. Hunterbrook Media has no obligation to update any article or disclosure to reflect subsequent changes in Hunterbrook Capital’s positions.

Nothing on this website constitutes investment advice, a recommendation to buy, hold, or sell any security, or a solicitation to purchase or sell any securities. No securities shall be offered or sold in any jurisdiction where such activities would be contrary to applicable securities laws. Hunterbrook Media is not a registered investment adviser in the United States or any other jurisdiction. Nothing herein should be construed as investment advice or a recommendation of any kind. This information should not be relied upon as a substitute for independent research or professional financial, legal, or tax advice.

This website may feature forward-looking statements reflecting Hunterbrook Media’s current views. Such statements, identifiable by terms including but not limited to “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “should,” and “will,” are inherently speculative and subject to risks and uncertainties. Actual results or outcomes may substantially deviate from those projected. Hunterbrook Media expressly disclaims any obligation to update or revise any forward-looking statements, regardless of subsequent developments or new information.

The information presented is current as of the date indicated. No representation regarding the completeness or timeliness of this information is made. Some information is sourced from third parties and, while believed to be reliable, has not been independently verified, and its accuracy or completeness is not guaranteed. Hunterbrook Media is not affiliated with any sites linked to this website. Investment in securities and other financial instruments involves significant risk, including the potential loss of principal. Users are advised to conduct their own due diligence and consult professional advisors before engaging in any investment activity. Use of Hunterbrook Media’s content is entirely at the user’s risk. Users shall not use this site for any illegal or prohibited purposes and shall comply with all applicable local, state, national, and international laws and regulations.

Should any provision of these Terms of Use be adjudged invalid or unenforceable, the remaining provisions shall remain in full force and effect. Trademarks contained in links to third-party websites belong to their respective owners. Hunterbrook Media retains copyright on all text, content, graphics, and trademarks displayed on this site.

BY: Dhruv Patel, Jenny Ahn

EDITOR: Vikas Kumar

Based on Hunterbrook Media’s reporting, at the time of publication Hunterbrook Capital is long $MOD and short a basket of comparable securities. Positions may change. This article is not investment advice or a recommendation to buy, sell, or hold any security. See full disclosures on our website.

“This is a heavy lift.”

That’s how CEO Neil Brinker described the work ahead for Modine — which makes industrial chillers, air-handling systems, and other cooling gear — as it scales up its suddenly enormous data center business.

The lift: ramping factories across North America fast enough to deliver on long-term data center customer commitments, including a $4 billion agreement with a customer Modine did not name.

Hunterbrook Media uncovered a remarkably detailed view of what that work actually entails, and who it is for, as the fast-growing cooling company enters what seems to be the most pivotal moment in its 100-plus-year history.

In a rare and unusually granular look into corporate planning records, Hunterbrook found what appears to be the contents of Modine’s internal database for its data center business, uploaded on GitHub about a month ago during an apparent database migration to Google Cloud. Modine did not respond to repeated requests for comment on the authenticity of the information, but a wide range of verifiable details matches public statements made by the company, as well as independent data.1

The repository records where its data came from: URLs on modine.sharepoint.com, the company’s SharePoint drive. The codebase also includes Modine email addresses tied to apparent Google employees, based on a review of LinkedIn profiles.

The GitHub repository’s tables detail factory planning, customer projects, supplier constraints, demand forecasts, production schedules, prices, internal costs, and engineering problems. It even captures what appear to be unit-level economics, including gross margin tied to specific customers, and tracks projects that ran late and ones that Modine lost.

Hunterbrook found the database, which did not require a password or payment to access, after asking a large language model basic questions about Modine’s customers — then had a team of reporters and engineers spend a week exhaustively vetting the findings.

One of the files seems to answer perhaps the biggest question hanging over the company: The unnamed $4 billion customer is Google.

The repository also shows a separate set of Google cooling opportunities in various stages totaling $4.5 billion worth of demand, with about $433 million booked so far on orders dating to as early as April of last year.

Beyond Google, the files also detail about $3 billion in firm or likely commitments to Modine from Amazon Web Services, Crusoe, and more than a dozen other data-center customers.

The $3 billion appears to be what Modine considers orders with more than an 80% conversion rate. Beyond that are billions more in what Modine labels as early-stage demand for its cooling products across the same top-tier data center customers.

The total: nearly $23 billion of modeled demand. AWS alone is the customer for over half of that total.

Modine hasn’t publicly named AWS as a customer either. But the database suggests the Amazon opportunity, even after discounting it by Modine’s own conversion odds, is worth more than the recent Google deal, and it mostly involves a different product. Firm demand already accounts for over $700 million of that opportunity. The data also details ongoing collaboration between AWS and Modine to jointly design and test custom builds, depicting Amazon as more of a long-term partner than a spot buyer.

For Modine’s fiscal quarter ending in September, the internal data center pipeline implied in the data2 — discounted by Modine’s internal conversion rating — is $540 million, about 20% above the company’s stated guide.3 For the entire fiscal year 2027, the probability-adjusted data points to $2.3 billion, which would amount to over 100% growth year-over-year; and beat the high-end of the company’s guided 60-80% growth.

Across the database, it’s clear the century-old HVAC company’s challenge is no longer finding customers. It is, like so many sleepy companies that suddenly became critical to the data center build-out, dealing with the privileged problem of perhaps too much demand.

And the GitHub repository shows a company attempting to deal with a wide range of challenges, from sold-out suppliers to understaffed engineering teams, in an effort to seize a historic multi-billion-dollar revenue opportunity.

In a couple of cases, Modine appears to have brought on entirely new suppliers, which is also confirmed by publicly available trade data.

The codebase also shows Modine pursuing ambitious projects that would take the company closer to silicon, not unlike its bigger rival Vertiv ($VRT).

One example: Modine appears to be trying to qualify a 1-megawatt coolant distribution unit against Nvidia’s liquid-cooling requirements. The project has no dollar value but offers an early glimpse of Modine’s entry into the fast-growing liquid-cooling market it has so far mostly missed.

Asked for comment, Nvidia, Google, and Modine did not respond, despite repeated requests. Amazon declined.

SOMEONE JUST … POSTED IT

The repository on GitHub shows that Modine was seemingly migrating its enterprise data from Microsoft Power BI dashboards to Google Cloud Cortex. The upload came from a single personal GitHub account owned by a software engineer who appears to have played a role in that migration.

Beyond the main user, the only other contributor to the repository — “Claude” — suggests that this whole thing may have been an effort to vibe-code the data migration.

Hunterbrook has chosen not to identify the individual, given the scale of the data in the repository.

We have not independently established whether the GitHub account owner works for Modine directly, through a contractor, or in some other capacity. We did, however, find that the account owner had a Modine email address.

The three Microsoft Power BI files contain over 100,000 rows of raw data across 41 tables covering monthly planning from April 2025 out into the early 2030s, daily factory production, individual purchase orders, and week-by-week parts shortages, among other operational details.

The database names more than a dozen customers, among them AWS, Google, and Crusoe, and ties them to specific factories, per-unit prices, standard costs, and margins.

Across all the files, one customer name is hard to miss: Google.

GOOGLE’S $4 BILLION COOLING PLATFORM

On May 26, Modine announced a deal large enough to reshape the company.

An unnamed “strategic data center customer” had entered a long-term capacity agreement, or LTA, under which Modine would reserve capacity to supply more than $4 billion of Modine’s flagship Airedale cooling products from 2027 through 2029. The customer paid Modine $165 million up front.

Modine’s same-day earnings release described it more specifically as an agreement with a major hyperscaler for chiller sales. Modine said the customer was an existing one, but kept the name confidential.

At the time, some were skeptical. Herb Greenberg, the legendary journalist popular in the short-selling world, wrote:

“Think the AI bubble is over? Hardly - $MOD up 15-17% pre-market on what amounts to a headline, with little in the way of details - not even an 8-K, just a press release. Just a big number and a claim that the deal ‘solidifies’ its position, blah, blah, blah. The beat goes on…”

The repository files provide some of the details Greenberg may have been looking for.

A table called Portfolio Review lists a project codenamed gCUB4.3. The project details a planned delivery of 3,512 total units of Modine’s next-generation 3-megawatt chillers, at $1.2 million apiece, to Google, with an estimated total sale price of $4,214,400,000, matching the “over $4 billion” ticket of the original press release. A field in the table sets first-site delivery in January 2027, consistent with the announced timeline.

The project-level data is also corroborated by another table called Monthly Demand that breaks down all demand by month. The numbers add up closely: $4.2 billion worth of Google demand for over 3,000 3-megawatt chillers, spread from January 2027 to November 2029. The table also shows, however, that about $500 million of that is marked as closed and lost, leaving just $3.7 billion in live demand. 80% of that is marked as firm.

And gCUB4.3 does not appear to be Modine’s first Google project of this kind.

The table also points to ongoing opportunities to ship a total of 5,983 units of the current-generation 2-megawatt chillers to Google, with orders placed as early as July last year. The total value of the 2-megawatt chiller projects is $3.55 billion,4 with a project codenamed gCUB4.1.2 shipping since July and a later-numbered version, gCUB4.1.4, marked “closed and won” in the files.

The majority, or $2.02 billion, is marked as early-stage, about $688 million as firm, and another $837 million as likely.

That incumbent relationship has a separate public echo. Modine’s fiscal-2026 annual report said one unnamed global technology customer accounted for approximately 11% of total company sales, about $350 million. It also said Modine had confidentiality agreements with three significant data center customers, although it didn’t name Google as one of them.

In total, there appears to be about $8.16 billion in live gross demand from Google across various stages spanning 2025 to 2030. While the bulk of Google demand is 2-megawatt and 3-megawatt chillers, it also includes related gear, such as computer-room air handlers, which makes up another $918 million.

But not all projected demand will convert to actual orders. Even on the recent LTA, Brinker has told investors that orders are taken four to six months before delivery, and Modine’s annual report warned the customer was not obligated to purchase every dollar of the anticipated volume.

The data show exactly how Modine plans around that.

Alongside each opportunity’s gross unit quantity, the Monthly Demand table carries a projected unit quantity that appears to apply one of three probability weights tied to the opportunity’s conversion probability: 100% for orders marked firm, 80% for those deemed likely, and 40% for early-stage prospects.5 In other words, the projected quantity is the gross quantity marked down by how likely Modine believes the deal is to convert.

Probability ratings appear largely associated with the opportunity stage: for example, projects in the “closed and won” or sometimes the “specification review” stage get marked as firm and given a 100% conversion rate, and projects in the “quotation & negotiation” stage generally get marked as likely and are given an implied 80% conversion rate. The rest, “Project in Planning,” are marked as early-stage and get a more speculative 40% probability of conversion.

An example of how we treated this analysis: Discounting the total gross demand value of $8.16 billion by the data’s own probability rating, you get about $6.07 billion in estimated demand from Google that Modine appears to be planning around.6

Beyond the dollars, the data points to the breadth and stickiness of Modine’s relationship with Google.

These gCUB project names — 4.1.2, 4.1.4, 4.3, and 4.4.0 — suggest Modine has been participating in successive generations of a Google-specific cooling architecture. That’s what Brinker told investors in May: “We’ve partnered with one hyperscaler, and we are now working on the second and soon to be third generation of that modular data center.”

And “gCUB” is not merely a suggestive internal codename. Google itself defines a gCUB as a modular “global central utilities building” that cools Google’s data center campuses.

Google’s public photo gallery shows gCUB infrastructure at campuses in New Albany, Ohio; Midlothian, Texas; and Storey County, Nevada. At Midlothian, Google says 10 modular cooling plants make up a complete gCUB and that the number is expected to grow; at New Albany, it says pipes carry cooling from a gCUB to two separate data-center buildings.

In other words, a gCUB is a repeatable campus utility architecture assembled from modular cooling plants and capable of serving multiple buildings — not the name of one chiller or one isolated data center.

That’s what the Modine data shows, too. Internal notes on the gCUB4.3 project indicate that Google’s “first site” order represents 38 units, suggesting more sites are expected to follow. And Google’s orders name about 30 distinct location codes across multiple product lines.

Read together with Google’s own description of gCUBs operating across multiple campuses and feeding multiple buildings, those site codes support a larger interpretation: Modine appears to have been designed into a standardized Google cooling platform that can be repeated across sites.

Of course, the files still do not prove that Modine is Google’s exclusive supplier, that all units will be purchased, or that every Google campus uses Modine chillers.

Google did not respond to repeated requests for comment.

AMAZON: BIG AMBITIONS, WITH REAL BOOKINGS ALREADY

Beyond Google, the databases uploaded to GitHub estimate potential demand from Amazon Web Services for Modine’s cooling products stretching out to 2033.

The total value of estimated gross demand? Roughly $12.38 billion.7

While Google is buying chillers from Modine, which produce the cold water or refrigerant, most of Amazon’s demand, about $11.42 billion, is for air handlers, which cool, filter, and circulate the conditioned air through the room. The air handlers consist of two types: 93,500 cubic-feet-per-minute DAHUs and the much larger 400,000 cfm TAHUs, which make up over two-thirds of the total air handler demand. The total estimated AWS demand also includes about $1 billion for chillers.

That indicates Amazon and Google aren’t necessarily competing for capacity from Modine; they’re mostly buying different things.

Modine substantially expanded its air-handler offerings more recently when it bought Calgary-based Scott Springfield Manufacturing for about $184 million in March 2024. In July of last year, the company announced a $100 million North American capacity expansion, citing “unprecedented demand from U.S. hyperscale and colocation data center customers.”

About $741 million of total Amazon demand has already been closed and won, with orders placed as early as April last year. Most of the rest of the demand is marked as early stage, with the lowest conversion probability rate, 40%.

But even at that 40% rate, that’s roughly $5.6 billion in probability-weighted demand from Amazon, surpassing Google gCUB4.3’s total value.

Besides the dollar figures, the file notes provide rich color on a working engineering partnership.

For example, notes on one air handler program with AWS describe the two companies jointly uprating an existing model, adding that testing of one component “with AWS has been completed” and that AWS is scheduled to be on site at Modine’s factory in December to run additional testing. Notes on a separate air handler program with AWS track progress on designing a prototype for a customer variant of an existing design.

Together, the notes point to an ongoing, hands-on engineering relationship, with Amazon involved in testing and custom variants still in development, rather than a one-time purchase.

Amazon did not provide a comment to Hunterbrook as of the time of this publication.

OTHER DATA CENTER CUSTOMERS

Beyond Google and AWS, the repository also includes over 20 other data center customers covering over $2.3 billion in pipeline demand. Nearly $1 billion of that is classified as firm. About $640 million is marked as likely.

The notes in the database add color to the on-the-ground work behind the numbers, suggesting they’re not mere paper accounting.

For example, notes on a project titled TurboChill (Abilene) track progress through Buildings 7 and 8 and say 28 units had already been installed in Building 8. They also describe rework, late deliveries and commissioning-schedule pressure. Abilene almost certainly refers to Crusoe’s flagship 1.2-gigawatt Stargate AI data center in Abilene, Texas, built for OpenAI and Oracle.

There are other public signs of Modine’s presence in Abilene, too.

At least five LinkedIn profiles show Airedale/Modine chiller and HVAC roles in Abilene, one describing the job as “Critical Facilities Technician HVAC at Stargate Data Center as a chiller SME.” Modine has also repeatedly recruited data-center cooling technicians specifically in Abilene.

The hardware matches, too. Modine’s Abilene orders list the Crusoe chiller as part 80021 (”TCC14R28K-XX CRUSOE”), which Airedale identifies as a roughly 2-megawatt TurboChill. Its product images, 24 top-mounted fans in two rows of 12 over a V-frame coil, closely match the chillers seen in drone footage of the campus.

Crusoe did not respond to Hunterbrook’s request for comment as of the time of this publication.

MODINE IS TRYING TO GET INTO NVIDIA’S LIQUID-COOLING STACK

Another internal project has no estimated revenue at all. But it may be one of the most strategically important entries in the database.

The customer field says: “NVIDIA.”

And the project is named: “1 MW NVIDIA Certification.”

And the product is a CDU — a coolant distribution unit, the equipment that circulates cooling fluid between a data center facility’s water system and the liquid-cooled servers themselves.

According to Modine’s internal project notes, the company had already assembled its first prototype, was completing a second, and was preparing to discuss the testing process with engineers and the University of Texas at Arlington.

The records do not show that Nvidia has certified the CDU. They do not show a commercial purchase order. And they do not establish Nvidia as a revenue-producing Modine customer.

What they show is Modine trying to qualify a megawatt-scale liquid-cooling product around Nvidia’s requirements.

That is a potentially meaningful expansion beyond the products driving most of Modine’s current data-center growth.

Much of the company’s disclosed business sits on the facility side: enormous chillers, air handlers, FanWalls and CRAHs that cool buildings and data halls.

A CDU sits much closer to the silicon.

That distinction is becoming increasingly important as Nvidia pushes data-center architecture toward dense, liquid-cooled rack-scale systems. Nvidia’s GB200 and GB300 NVL72 systems are liquid-cooled, while the company says future AI-factory architectures will move toward megawatt-scale racks and beyond.

The University of Texas at Arlington connection is also unusually specific. UTA researchers have worked with Nvidia on liquid-cooled data-center systems before, including research involving cold plates and coolant distribution units.

So the zero in Modine’s revenue field may not reflect the scale of the opportunity.

If the company can get a CDU qualified against Nvidia’s increasingly dominant liquid-cooled architectures, it would give Modine another way to participate in the AI buildout — not just through facility-scale cooling equipment, but by moving coolant toward the racks themselves.

Nvidia did not respond to Hunterbrook’s request for comment.

DEMAND ISN’T THE PROBLEM. SUPPLY MIGHT BE

The customer pipeline is enormous, and a separate table shows how Modine plans to meet it — and where it might fall short.

A table, Build Plan, spells out the speed and magnitude of the ramp-up Modine is planning across its factories for its high-ticket items. For 3-megawatt chillers, the next-generation product that the recent $4 billion Google agreement covers, Modine appears to be planning its first production in October, then roughly doubling production each quarter until reaching full run-rate by early 2028, with the steepest jump in the earlier quarters.

Even then, it’s unclear whether capacity will be able to catch up to demand. Comparing the planned production figures in the Build Plan table with the monthly unit demand in the Monthly Demand table shows that, even with scheduled ramp-ups across Modine’s U.S. factories, modeled production will fall short of projected demand in most months for some products.

The problem is especially noticeable for the 2-megawatt chillers, which according to the data are the main items currently being shipped to Google.

For the 3-megawatt chillers, the supply-demand comparison looks more optimistic because the capacity numbers are more theoretical: No plant is actually making 3-megawatt chillers yet.

The existing Google 2-megawatt gCUB chillers, as detailed in the data, are currently moving through Modine’s manufacturing system, where their capacity is projected based on real factory stats. But neither of the two plants that are supposed to make the 3-megawatt chillers, Dallas and Jefferson City, appears to have made a single 3-megawatt chiller yet.

That seems a little behind Modine’s original plans — in line with what the company said in a recent earnings call. In July, Brinker said component shortages were forcing Modine to “dynamically” resequence its capacity rollout, though he said it would be “back on track and on schedule” by the end of the fiscal year.

The GitHub data confirms the delay concerns, pointing to lead times for capital equipment as one reason. The “Top Risks” field in the Portfolio Review table reads, verbatim: “Capacity and readiness concerns at a plant level. Capital equipment lead times for Dallas and Jeff City.”

Factory capacity isn’t the only bottleneck. A manpower shortage appears to be forcing Modine to ration engineering hours among competing projects.

At least $149 million of projects were paused for some period of time because Modine had reassigned engineers to more urgent work, according to the data.

One is CyrusOne’s $60.6 million project for 168 chillers. Notes in the data say: “design work paused so engineering resources can focus on crusoe childress.” Another field says engineering would begin only after the Childress design was completed and was “still on pause” as of June 30.

Another $88.7 million Crusoe program was stuck behind the same project. “Design work paused due to engineering resources being allocated to crusoe childress job,” the note says, “unsure on new start date for design work.”

It appears Modine was triaging by redirecting engineering hours to put out the biggest fires first.

One former Modine engineer told Hunterbrook they were pulled from the automotive group and reassigned to data centers because that segment was “so starved for engineers.”

They also described Modine as having the “theoretical” capacity to execute on its explosive data center orders, but as struggling to deal with operational inefficiencies, including a lack of uniform systems across factories building the same parts or products.

THE SUPPLIERS THAT CAN STOP THE LINE

Another bottleneck appears to sit outside Modine’s factories: its suppliers.

The Portfolio Review table on the $4.2 billion deal with Google spells out the issue: “Securing supplier capacity for production.”

The company has already told investors that shortages from a handful of critical suppliers constrained data-center production this year. Brinker said Modine had identified four suppliers that could create vulnerabilities and described some component shortages as a “hard stop” on production.

A table named stg_tracker appears to name the exact shortages and their dollar value.

One shortage involves flooded evaporators needed at Modine’s Jefferson City plant, a shortage responsible for $25.6 million of impacted value beginning July 8.8 The shortage tracker lists Modine’s Rockbridge plant as the supplier, while a separate capacity table identifies “Weiland” — almost certainly a misspelling of the heat-exchanger manufacturer Wieland — as Modine’s evaporator supplier.9

The other is an axial fan used to move air through cooling equipment, supplied by ebm-papst, a major German manufacturer of industrial fans and motors. That shortage was gating about $114 million worth of orders from being considered “clear to build” at Modine’s Rockbridge plant, with the first affected order dated July 15.

The axial fan’s listed action is simply: “Validate Due Dates with Buyer.”

Another table models how supply will continue to fall short of unit demand.

MP&L Detailed Capacity shows fan supplies from ebm-papst largely flatlining despite increasing demand.

The table also shows a wide component supply-demand gap for Amazon’s new TAHU air handler, with the capacity at three of the four named component suppliers remaining flat and far short of demand through March 2027.

The impact of component shortages is also visible in an Amazon order detailed in the data.

On one program calling for $204.4 million worth of air handlers, Amazon wanted production to begin in September, but notes entered in the database say Modine secured coil allocation from supplier Cancoil beginning only in December.

The project’s risk register states: “Coil supply for customer’s requested production start date not yet secured.”

A manager at Cancoil, which supplies cooling equipment to Modine, told Hunterbrook that the company is able to keep up with booked orders because the company “plans conservatively,” but admitted the demand is outpacing its capacity. They said to really scale, the company would need 18 months to three years to build new factories. They declined to say whether new factories are planned.

Ebm-papst is also racing to add capacity. In May, the company said booming data-center demand had prompted it to significantly expand production of large-format fans at its Mulfingen-Hollenbach facility in Germany and added more than 100 production workers.

Ebm-papst is also expanding its plant in Telford, TN. The Washington County regional planning commission approved “phase two” of its construction plan for the site in March. The company is planning to double its plant footprint by the end of 2027, according to MM Maschinenmarkt, a German trade magazine for the manufacturing sector.

“The U.S. market is a key growth market for ebm-papst, and we continue to invest in our capabilities and footprint to support future customer demand. Therefore, we are planning to expand our production capacities in Tennessee,” an ebm-papst spokesperson told Hunterbrook in a written statement. “Among others, we are also planning to produce large fans for data center applications here.”

The company is set to be acquired by Chicago-based ventilation and cooling equipment manufacturer Madison Air Solutions for $5.4 billion, the companies announced on Monday.

NEW SUPPLIERS COME ONLINE

Modine is also taking the matter into its own hands, including by finding supply substitutes and redesigning around components it can’t get fast enough.

Brinker has said Modine is negotiating specific allocations with critical vendors and working to qualify additional sources where possible. In July, he said the company believed it was on track to meet its fiscal-year plan.

The repository data supports that narrative.

On a $204 million Amazon program, the company plans to qualify Madok, now Canadian Coil Technologies, as a second coil supplier capable of supporting Amazon’s September start: “Approving an alternate coil supplier that can meet the September supply demand,” the project note says.

On a project Modine’s records label “Anthropic (Tom Barrow)” and ties to an apparent “Anthropic” data center, one note reads: “Tom Barrow accepted delta fan and we de-prioritized Edge.” The word “delta” seemingly refers to Delta Electronics.

A Related Digital project carries almost the same note: “Related Digital accepted 630 fan and we de-prioritized Edge.”

Trade data reviewed by Hunterbrook suggests at least one of those alternative relationships is already moving material at scale.

Between July 21 and August 12, Modine received five shipments from Delta Electronics containing 75 tons of cargo described as “BACKWARD BLOWER.”

Each shipment carried shipping marks identifying the end destination: Modine’s plant in Grenada.

Hunterbrook repeatedly asked Modine about this — and provided the company with ample opportunity to deny the authenticity of the data. We received no reply.

If you have any other notable takeaways from the data — or disagree with any of our conclusions — email ideas@hntrbrk.com. We’re sure there’s stuff we missed.

AUTHORS

Dhruv Patel is an investigative journalist based in Cambridge, Massachusetts, specializing in data-driven reporting. He helps spearhead investigative coverage at The Harvard Crimson, and his reporting has been cited and discussed by The New York Times, CNN, The Boston Globe, ABC News, and BBC, where he also frequently contributes commentary. A John Harvard Scholar at Harvard College, he studies computer science and economics to leverage machine learning for accountability journalism.

Jenny Ahn joined Hunterbrook after serving many years as a senior analyst in the US government. She is a seasoned geopolitical expert with a particular focus on the Asia-Pacific and has diverse overseas experience. She has an M.A. in International Affairs from Yale and a B.S. in International Relations from Stanford. Jenny is based in Virginia.

EDITOR

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

GRAPHICS

Dan DeLorenzo is a creative director with 25 years reporting news through visuals. Since first joining a newsroom graphics department in 2001, he has built teams at Bloomberg News, Bridgewater Associates, and the United Nations, and published groundbreaking visual journalism at The Wall Street Journal, Associated Press, The New York Times, and Business Insider. A passion for the craft has landed him at the helm of newsroom teams, on the ground in humanitarian emergencies, and at the epicenter of the world’s largest hedge fund. He runs DGFX Studio, a creative agency serving top organizations in media, finance, and civil society with data visualization, cartography, and strategic visual intelligence. He moonlights as a professional sailor working toward a USCG captain’s license and is a certified Pilates instructor.

Jean Wang, Michelle Cera, Blake Spendley, and Till Daldrup contributed reporting.‍

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By: Matthew Termine, Sam Koppelman

Editor: Vikas Kumar

Based on Hunterbrook Media’s reporting, at the time of publication Hunterbrook Capital is long $CVNA. Positions may change at any time. This article is not investment advice or any recommendation. See full disclosures on our website.

Mark Walter may need billions of dollars. But one of the sources of cash investors assumed he might tap — his enormous Carvana stake — may not be sellable right now.

Delaware UCC filings obtained by Hunterbrook on Tuesday show that Citigroup Global Markets filed UCC financing statements and amendments through which Citi has a presently effective security interest in assets held by CVAN Holdings Sub I, LLC, where TWG holds essentially its entire Carvana position. A UCC financing statement is a public notice filed with a state, here Delaware, through which a lender perfects its security interest in pledged collateral.

The results of a Delaware UCC search on CVAN Holdings Sub I, LLC, the entity that holds Mark Walter’s $2 billion stake in Carvana. The filings show two separate security interests in the Carvana shares held within the entity, one of which is still active and the other terminated as of July 3, 2025.

Citigroup amended the financing statement on June 23, less than two months ago, specifically to account for shares created by Carvana’s recent five-for-one stock split.

‍The finding complicates a growing bear case against Carvana: that Walter, suddenly desperate for liquidity amid federal scrutiny of his sprawling business empire, could dump his massive Carvana position into the market.

He can’t simply do that — at least not without Citigroup Global Markets Inc. releasing the collateral.

The collateral is pledged to Citigroup Global Markets Inc. Selling it would generally require satisfying the secured obligations, obtaining Citi’s consent, or otherwise negotiating a release of the collateral. And the lien expressly extends beyond the shares themselves to proceeds and other assets.

Citi could of course sell the shares if, for example, an event of default were triggered under the facility’s terms, which remain largely undisclosed. But there is reason to believe that at least some of the borrowing or pre-payment pursuant to forward contracts occurred in connection with Walter’s purchase of a majority interest in the Lakers. And he just agreed to sell his Lakers stake to a group including Bob Iger and Joshua Kushner. Is Citi likely to sell these shares when a significant Walter liquidity event is pending?

Carvana shares were down more than 7% again Tuesday after a sharp decline Monday. Walter and TWG’s post-split core position represents approximately 30 million Carvana shares, worth roughly $2 billion at Tuesday morning prices.

But $2 billion is the gross market value, not necessarily available liquidity for Walter.

That distinction suddenly matters.

The Wall Street Journal reported Monday that Walter “drew on loans from insurers to invest in startups,” including Carvana and Beyond Meat. The revelation comes as federal prosecutors and the SEC investigate whether Walter or his companies committed fraud by concealing financial connections while borrowing billions from insurers he controlled. Walter and his businesses have not been charged with crimes. TWG — Walter’s holding company — has said it acted in good faith and denied attempting to circumvent its obligations.

Walter is now racing to raise money and unwind insurer-related investments. That has naturally raised the question of whether his publicly traded holdings could be sold for cash.

The Delaware records show the answer, at least for Carvana, is considerably more complicated.

CITI’S CLAIM COVERS THE WHOLE CORE STAKE

Walter’s filings with the SEC had already provided a clue.

They said CVAN Holdings Sub I had pledged all of its Carvana LLC units and corresponding 5,995,376 Class B shares to secure “one or more prepaid variable forward sale contracts and certain margin loans with an unaffiliated third party.” Walter ultimately controls the TWG entities above CVAN Sub.

What the SEC filing did not reveal was the identity of that third party — or whether the pledge remains live today.

The Delaware records answer both questions much more clearly.

The secured party is Citigroup Global Markets Inc., acting as agent for Citibank, N.A. The original financing statement dates to December 22, 2023. It was amended in February 2024, July 2025 and, critically, June 23, 2026.

That most recent amendment came after Carvana’s five-for-one stock split. Citi updated its collateral description to expressly capture the additional shares issued in the split, bringing the pledged Class B position to approximately 30 million post-split shares.

That is powerful evidence that the pledge was not merely a stale artifact from an old Walter financing.

Someone was actively maintaining Citi’s security interest this summer.

THERE WAS ALSO A MARGIN LOAN

A second UCC filing reveals more.

On May 10, 2024, Citibank filed a separate financing statement against CVAN Holdings Sub I. Its collateral schedule refers explicitly to a “Margin Loan Agreement” dated May 10, 2024, among CVAN Sub as borrower, multiple lenders, and Citibank as administrative agent. Citigroup Global Markets served as custodian for the collateral account.

That filing was terminated on July 3, 2025.

But the timing is notable: One day earlier, on July 2, Citi amended and expanded its other, still-active financing statement to cover 5,995,376 Carvana shares (pre-split).

And six weeks later, Walter’s SEC filing still said the entire position secured both “prepaid variable forward sale contracts” and “certain margin loans.”

That sequence suggests the financing may have been restructured or consolidated rather than simply paid off — though the UCC records alone cannot prove that.

Notably, Citi then returned in June to update the still-active lien for Carvana’s stock split.

WHAT THIS MEANS FOR CARVANA

For traders, there are two very different risks tied to Walter.

The first is the one currently worrying the market: Walter voluntarily dumps tens of millions of CVNA shares because he needs cash.

These filings make that scenario look substantially less straightforward.

Walter and TWG do not appear to control an unencumbered $2 billion block that he can simply sell and redeploy elsewhere. Citi already has a claim against essentially the entire core stake. A sale could still happen, but it would have to be coordinated with the secured financing structure, with some portion of the proceeds potentially going first to satisfy Citi or the forward counterparties.

That should reduce the simplistic near-term “Walter needs cash, therefore 30 million shares are for sale” overhang.

But there is a second risk.

If Walter’s obligations to Citi become stressed, Citi itself could have rights over the collateral.

The filings do not disclose the requisite loan-to-value ratio, margin-call threshold, maturity dates, or current exposure under Walter’s prepaid forward contracts. The filings provide no evidence that Citi is currently forcing — or even considering — a sale of Carvana shares.

A UCC filing also does not prove how much debt is presently outstanding.

Still, the newly obtained records change the picture materially.

Walter’s Carvana position looks less like a $2 billion piggy bank he can raid to solve his liquidity crunch and more like a $2 billion pool of collateral over which Citi already holds influence.

TWG and Carvana did not immediately respond to Hunterbrook’s request for comment. Citi declined to comment.

AUTHOR

Matthew Termine is a former corporate lawyer with significant experience advising companies operating within regulated industries. Matt led Hunterbrook’s investigation and reporting on United Wholesale Mortgage. In 2017, Matt was credited by the Wall Street Journal, among others, for identifying suspicious mortgage loan transactions that led to several successful criminal prosecutions, including that of a prominent political operative and the chief executive officer of a federally chartered bank. He is a graduate of Trinity College and Fordham University School of Law.

Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life. Sam is based in New York City.

EDITOR

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

DISCLOSURES

© 2026 Hunterbrook Media LLC. All rights reserved. Use of this website is strictly governed by our Terms of Use. The content herein is furnished on an “AS IS” basis without any form of express or implied warranty. For information regarding our privacy practices, please refer to our Privacy Policy.

Hunterbrook Media LLC (”Hunterbrook Media”) is an investigative news organization. Hunterbrook Media is affiliated with Hunterbrook Capital LP (”Hunterbrook Capital”), an exempt reporting adviser with the U.S. Securities and Exchange Commission that serves as investment adviser to one or more investment funds. Hunterbrook Media and Hunterbrook Capital are legally separate entities under common control. Hunterbrook Capital’s investment activities are one source of funding for Hunterbrook Media’s journalistic operations. Hunterbrook Capital may hold long positions, short positions, positions through derivative instruments including options and swaps, or no position in any security covered or mentioned on this website. Consistent with applicable policies and procedures, Hunterbrook Capital may establish, modify, or close positions in covered securities before or after the publication of any Hunterbrook Media article. Following publication of any article, Hunterbrook Capital will continue transacting in covered securities for an indefinite period and may be long, short, or flat at any time thereafter, regardless of any position described at publication. Hunterbrook Media has no obligation to update any article or disclosure to reflect subsequent changes in Hunterbrook Capital’s positions.

Nothing on this website constitutes investment advice, a recommendation to buy, hold, or sell any security, or a solicitation to purchase or sell any securities. No securities shall be offered or sold in any jurisdiction where such activities would be contrary to applicable securities laws. Hunterbrook Media is not a registered investment adviser in the United States or any other jurisdiction. Nothing herein should be construed as investment advice or a recommendation of any kind. This information should not be relied upon as a substitute for independent research or professional financial, legal, or tax advice.

This website may feature forward-looking statements reflecting Hunterbrook Media’s current views. Such statements, identifiable by terms including but not limited to “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “should,” and “will,” are inherently speculative and subject to risks and uncertainties. Actual results or outcomes may substantially deviate from those projected. Hunterbrook Media expressly disclaims any obligation to update or revise any forward-looking statements, regardless of subsequent developments or new information.

The information presented is current as of the date indicated. No representation regarding the completeness or timeliness of this information is made. Some information is sourced from third parties and, while believed to be reliable, has not been independently verified, and its accuracy or completeness is not guaranteed. Hunterbrook Media is not affiliated with any sites linked to this website. Investment in securities and other financial instruments involves significant risk, including the potential loss of principal. Users are advised to conduct their own due diligence and consult professional advisors before engaging in any investment activity. Use of Hunterbrook Media’s content is entirely at the user’s risk. Users shall not use this site for any illegal or prohibited purposes and shall comply with all applicable local, state, national, and international laws and regulations.

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By: Matthew Termine, JD Jean-Jacques

Editor: Sam Koppelman

Based on Hunterbrook Media’s reporting, at the time of publication Hunterbrook Capital is short bonds issued by Sammons Financial Group. Positions may change at any time. This article is not investment advice or any recommendation. See full disclosures on our website.

Even for journalists investigating the sprawling Walter saga, the divestment announcement came out of left field.

The Sammons conglomerate, which has owned a big stake in Mark Walter’s business since before it even bore the name Guggenheim, says it’s leaving the stadium after three decades.

This comes as Walter, billionaire owner of the Los Angeles Dodgers, has embarked on rapid sales for liquidity amid a federal probe into how his life insurers disclose investments. After he agreed to sell his majority stake in the Los Angeles Lakers last week, the FT reported he’s also exploring the sale of his stake in Chelsea Football Club. He even reportedly offered his Guggenheim shares as collateral to resolve holes in the balance sheets of insurers owned by The Walter Group (TWG), which back life insurance policies held by millions of Americans.

Hunterbrook Media reported on Sunday that Sammons cut Guggenheim from its disclosures the year before federal agents seized devices from Walter and another Guggenheim executive.

The removal of Guggenheim from the Sammons filings conflicted with Guggenheim’s latest filings. Guggenheim still calls Sammons a related party, its largest stakeholder, and its largest source of fees. Guggenheim also invests money from Sammons life insurers. Despite all of this ongoing business, Sammons claims Guggenheim is unaffiliated.

The day after Hunterbrook published its investigation, Bloomberg reported that Sammons bonds quickly sank to an all-time low. Hours later, Bloomberg also reported on a 20% drop in a term loan by Guggenheim’s GIH Borrower LLC.

BONDS ISSUED BY SAMMONS FINANCIAL GROUP DECLINED TO ALL-TIME LOW ON AUGUST 17:

Hunterbrook didn’t report weaknesses in the assets underlying the bonds from either Sammons or Guggenheim, but did detail a web of undisclosed or notable ties between the firms and their affiliates. Hunterbrook also discovered the use of Sammons life insurance money to fund assets owned by Walter’s TWG investments, including a bull-riding team, through a Guggenheim-managed investment vehicle.

Representatives of AM Best, the agency that assigned Sammons Financial’s bonds an “‘a-’ (Excellent)” rating in June, declined to comment when reached by phone on Monday, but directed Hunterbrook over email to its webpage on how it views and analyzes affiliated and non-affiliated investments. Another Sammons rating agency, Fitch did not respond to a request for comment.

But last night, Sammons Financial and its parent Sammons Enterprises chimed in, after not acknowledging repeated requests for comment leading up to the first Hunterbrook article.

Sammons did not refute the facts of Hunterbrook’s reporting. The conglomerate clarified several distinctions about its entities and emphasized that it “is a separate and independently managed organization” from “Guggenheim and certain of its affiliates.” The conglomerate also claimed that “Sammons, its officers, directors, and employees are not under investigation.”

Then Sammons announced, for the first time, that it “has been divesting over the past several years” from Guggenheim Capital, the parent company of several Guggenheim affiliates, including entities that have managed Sammons life insurance assets for many years.

A Guggenheim spokesperson declined to comment on the divestment. A Guggenheim executive said they had not heard of it.

The largest owner of an asset management giant beginning to divest its stake after 30 years of partnership would have been news on a regular Monday — even if that owner hadn’t also invested roughly a hundred billion dollars with that asset manager. As Guggenheim’s CEO is in a federal investigation and offloading assets, this marks Guggenheim’s largest stakeholder and CEO both simultaneously raising cash.

At the same time, key statements by Sammons and Guggenheim directly contradict each other.

Sammons — on behalf of Sammons Financial and its parent company Sammons Enterprises — claimed in its new announcement: “We are not affiliated with Guggenheim Capital LLC.” It also affirmed it “owns a non-voting and non-controlling, minority interest in Guggenheim Capital.”

But a May filing by Guggenheim Investments Private Credit Fund disclosed, in contrast, that:

“Sammons Enterprises, Inc., a diversified company with several insurance company subsidiaries (together with its subsidiaries, “Sammons”), holds indirect economic and voting interests in Guggenheim Capital, LLC (“Guggenheim Capital”), the Adviser’s ultimate parent company. As a result of its ownership stake in Guggenheim Capital, Sammons is the largest individual stakeholder of the Adviser. Certain of Sammons’ wholly owned insurance company and other subsidiaries are advisory clients of, and pay fees to, the Adviser. As a result, Sammons is the largest individual source of annual advisory fees paid to the Adviser. Sammons also has other relationships with the Adviser and various Guggenheim Entities.”

Is Guggenheim correct that Sammons owns “voting interests” in Guggenheim Capital, or is the Sammons conglomerate correct that it “owns a non-voting” interest in Guggenheim Capital?

Even more recently, a July 30 filing by Guggenheim Partners Investment Managements (GPIM) identifies the Sammons Enterprises vehicle called Sage Assets as a “Control Person,” because it can appoint representatives to Guggenheim Capital’s executive committee. GPIM also lists Sammons Financial’s life insurers as “related persons.” (TWG not disclosing related parties is reportedly what catalyzed the federal investigation).

And a March 31 filing by Guggenheim Private Investments (GPI; not GPIM) similarly identifies Sammons Enterprises as an “indirect substantial owner,” as well as a “significant individual source of annual advisory fees” paid to one of GPI’s affiliates and also a “primary lender.”

So one of Sammons or Guggenheim — which each manage hundreds of billions of dollars — seems to be wrong, unless the voting interests were zeroed after May 7, or Sammons and Guggenheim are using different definitions of control and voting interests.¹ Sammons and Guggenheim could not immediately be reached for clarification.

Sammons also claimed on Monday that Sammons Enterprises has no “ability to control, Guggenheim Capital LLC, TWG Global Holdings LLC, nor any of their affiliates.” However, that “ability to control” may be a technical or even strictly semantic distinction.

Because in addition to the “Control Person” July filing by Guggenheim, Sammons is the largest stakeholder in Guggenheim and “the largest individual source of annual advisory fees” paid to Guggenheim. Sammons buys loans structured by Guggenheim. Sammons is a “primary lender in a facility that provides leverage” to a fund advised by Guggenheim Private Investments. And it has life insurance money invested in a Mark Walter rodeo investment held via TWG and managed by Guggenheim.

HOW IT ALL TIES TOGETHER & WHERE SAMMONS MAY BE UNTYING

Is Sammons divesting its ownership in Guggenheim, or also its roughly one hundred billion dollars in life insurance assets managed by Guggenheim?

And if Sammons is divesting both its ownership and its fund investments, what does that mean for the value of Mark Walter’s stake — which he offered to pledge as collateral to meet life insurance loans at the center of the federal investigation?

In the new statement, Sammons now highlights diversification where it used to highlight Guggenheim’s role as its “core manager” of life insurance assets. Sammons says it’s now “utilizing more than 15 independent, third-party investment managers.”

Sammons doesn’t, however, identify what percentage of its assets each of those firms manages. As of 2023, according to Sammons audited financials, Guggenheim was running 87% of its investment portfolio, about $100 billion dollars.

That percent going down would enable Sammons to tell regulators and insurance policyholders it’s diversifying risk and reducing reliance on affiliated investors at a time when affiliations (or claims to the contrary) are under federal scrutiny.

But that same diversification would be tough news for Guggenheim, and for Walter.

And it certainly looks like the relationship between the two entities is changing. In every filing from 2023 through March 2025, Guggenheim’s SEC ownership schedules listed Sammons’ holding entity, Sage Assets, as a 25%-50% owner and “control person.” Then, in May 2025, the Sammons chain was removed: Guggenheim described a “change in the ownership structure of Guggenheim Capital, LLC by SAGE Assets, Inc. falling below 25%.”

This could be a result of the divestiture or of Sammons renouncing their voting rights.

The truth will be revealed in time. For now, it’s quite the rodeo.

AUTHORS

Matthew Termine is a former corporate lawyer with significant experience advising companies operating within regulated industries. Matt led Hunterbrook’s investigation and reporting on United Wholesale Mortgage. In 2017, Matt was credited by the Wall Street Journal, among others, for identifying suspicious mortgage loan transactions that led to several successful criminal prosecutions, including that of a prominent political operative and the chief executive officer of a federally chartered bank. He is a graduate of Trinity College and Fordham University School of Law.

JD Jean-Jacques joined Hunterbrook from Goldman Sachs, where he worked as an investment banker. He was editor-in-chief of Howard University’s newspaper, The Hilltop, and wrote for The Exonian at Phillips Exeter Academy. Among other recognitions, JD was a White House Correspondents’ Association Scholar and was named Student Journalist of the Year by The National Association of Black Journalists. He graduated from Howard with a B.A. in history.

EDITOR

Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life. Sam is based in New York City.

Nathaniel Horwitz contributed reporting.

DISCLOSURES

© 2026 Hunterbrook Media LLC. All rights reserved. Use of this website is strictly governed by our Terms of Use. The content herein is furnished on an “AS IS” basis without any form of express or implied warranty. For information regarding our privacy practices, please refer to our Privacy Policy.

Hunterbrook Media LLC (”Hunterbrook Media”) is an investigative news organization. Hunterbrook Media is affiliated with Hunterbrook Capital LP (”Hunterbrook Capital”), an exempt reporting adviser with the U.S. Securities and Exchange Commission that serves as investment adviser to one or more investment funds. Hunterbrook Media and Hunterbrook Capital are legally separate entities under common control. Hunterbrook Capital’s investment activities are one source of funding for Hunterbrook Media’s journalistic operations. Hunterbrook Capital may hold long positions, short positions, positions through derivative instruments including options and swaps, or no position in any security covered or mentioned on this website. Consistent with applicable policies and procedures, Hunterbrook Capital may establish, modify, or close positions in covered securities before or after the publication of any Hunterbrook Media article. Following publication of any article, Hunterbrook Capital will continue transacting in covered securities for an indefinite period and may be long, short, or flat at any time thereafter, regardless of any position described at publication. Hunterbrook Media has no obligation to update any article or disclosure to reflect subsequent changes in Hunterbrook Capital’s positions.

Nothing on this website constitutes investment advice, a recommendation to buy, hold, or sell any security, or a solicitation to purchase or sell any securities. No securities shall be offered or sold in any jurisdiction where such activities would be contrary to applicable securities laws. Hunterbrook Media is not a registered investment adviser in the United States or any other jurisdiction. Nothing herein should be construed as investment advice or a recommendation of any kind. This information should not be relied upon as a substitute for independent research or professional financial, legal, or tax advice.

This website may feature forward-looking statements reflecting Hunterbrook Media’s current views. Such statements, identifiable by terms including but not limited to “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “should,” and “will,” are inherently speculative and subject to risks and uncertainties. Actual results or outcomes may substantially deviate from those projected. Hunterbrook Media expressly disclaims any obligation to update or revise any forward-looking statements, regardless of subsequent developments or new information.

The information presented is current as of the date indicated. No representation regarding the completeness or timeliness of this information is made. Some information is sourced from third parties and, while believed to be reliable, has not been independently verified, and its accuracy or completeness is not guaranteed. Hunterbrook Media is not affiliated with any sites linked to this website. Investment in securities and other financial instruments involves significant risk, including the potential loss of principal. Users are advised to conduct their own due diligence and consult professional advisors before engaging in any investment activity. Use of Hunterbrook Media’s content is entirely at the user’s risk. Users shall not use this site for any illegal or prohibited purposes and shall comply with all applicable local, state, national, and international laws and regulations.

Should any provision of these Terms of Use be adjudged invalid or unenforceable, the remaining provisions shall remain in full force and effect. Trademarks contained in links to third-party websites belong to their respective owners. Hunterbrook Media retains copyright on all text, content, graphics, and trademarks displayed on this site.

BY: Sam Koppelman, Matthew Termine, JD Jean-Jacques

EDITOR: Vikas Kumar

Guggenheim CEO Mark Walter just agreed to sell the Lakers for liquidity after the Feds seized his phone and computer amid a probe into life insurers he owns.

Meanwhile, Guggenheim’s largest shareholder — the conglomerate Sammons, which owns $130 billion of life insurance assets largely managed by Guggenheim — has stayed out of the spotlight, even as its own CEO announced retirement this month.

How? In 2024, Sammons restructured its Guggenheim stake and stopped classifying the firm as a related party, even as it retained a huge stake and continued investing billions through Guggenheim vehicles. That is strikingly similar to the disclosure issue now drawing federal scrutiny to Walter.

Caught in the middle: Sammons policyholders across the country, whose insurance money has flowed into Walter-linked businesses — including the insurers under federal investigation and, apparently, a professional bull-riding team.

Sammons and Guggenheim did not respond to repeated requests for comment.‍

Nick Nemeth of Mispriced Assets and Hunterbrook Media reporter-at-large Bethany McLean contributed reporting.

Based on Hunterbrook Media’s reporting, at the time of publication Hunterbrook Capital is short bonds issued by Sammons Financial Group. Positions may change at any time. This article is not investment advice or any recommendation. See full disclosures on our website.

Shaq and Kobe. Magic and Kareem. Feds and warrants.

In the golden age of grift and graft, it’s not every day FBI agents stake out a private jet to seize a phone and laptop from a billionaire. But last year, on a Chicago tarmac, that’s exactly what they did, targeting devices belonging to Mark Walter.

Walter is the CEO of financial giant Guggenheim, as well as the owner of the Los Angeles Dodgers, the Los Angeles Lakers, and now, quite a few legal bills.

Last week, Walter agreed to sell the Lakers to Josh Kushner and Bob Iger for a record $12.5 billion, less than a year after closing on the team for $10 billion. It’s among the richest, quickest flips in NBA history. $2.5 billion! In a year!

ESPN credulously framed it as an offer Walter couldn’t refuse, claiming he was not “looking to sell.”

But that didn’t make sense. You buy the Lakers because you want to own the Lakers. If you sell the Lakers just a year later, it’s probably because you have to.

Sure enough, Bloomberg quickly reported what really drove the deal: Walter’s holding company was raising cash “to help pay down loans on the books of its insurers that had drawn scrutiny from the Justice Department.” The FT then broke news that the president of Guggenheim Investments “had her phone seized by the FBI” on the same day as Walter’s.

The insurers tied to the probe — Delaware Life and Clear Spring Life and Annuity, the life insurance arm of The Walter Group (TWG) — received grand jury subpoenas after a whistleblower report. The companies then restated their financials to disclose that their respective investment portfolios were significantly more intertwined with Walter and TWG than they had initially disclosed.

But as Delaware Life and Clear Spring Life and Annuity have been taking heat, one player very close to all this has managed to avoid scrutiny: Sammons.

As of 2021, the conglomerate owned roughly a third of Guggenheim. Sammons paid the firm tens of millions each year for managing tens of billions of dollars of Sammons life insurance money, according to its 2023 filing. Sammons even buys Guggenheim loans in circular transactions that smell like a Proustian madeleine from 2008.

But Sammons hasn’t been included in the coverage of the Walter scandal yet.

One potential explanation: In 2024, before subpoenas hit Walter’s insurers, Sammons restructured. It renounced its voting shares in Guggenheim, enabling Sammons to claim Guggenheim was no longer an “affiliate or related party.” But the money, fees, loans, and a right to appoint representatives to the executive committee at Guggenheim remain. Only the affiliation vanished, just in time. Abracadabra!

The timing of the disappearing act looked like magic.

Then again, life insurers are supposed to be pretty good at predicting when someone’s time is up. And was it ever the right time for Sammons to downplay its ties to Guggenheim.

If Sammons was trying to pretend that the relationship with Guggenheim doesn’t exist, Guggenheim doesn’t seem to have gotten that memo.

Its investment manager’s July 30th filing still lists the Sammons insurers as related persons.

Which makes sense! Guggenheim still invests Sammons’ money, contributed by ordinary Americans to life insurance policies. And Sammons still owns a huge stake in Guggenheim.

That raises the question: Why, exactly, isn’t Guggenheim labeled as an affiliate in the Sammons filings? Especially because a Guggenheim filing from May 2026 still describes Sammons as holding “voting interests” in Guggenheim Capital and being its “largest individual stakeholder.”

The answer is unclear. Neither Sammons nor Guggenheim responded to repeated requests for comment.

But the Americans who have paid into the more than 1.7 million policies held by Sammons-owned insurers — and their beneficiaries — deserve to know the risks. Just how linked are their AM Best-rated, A+ insurers to the Guggenheim/Walter/TWG complex, parts of which are now under federal investigation?

HOW IT ALL FITS TOGETHER: SAMMONS, GUGGENHEIM, MARK WALTER’S TWG, AND TENS OF BILLIONS OF DOLLARS IN AMERICAN LIFE INSURANCE POLICIES

THE MISSING INSURERS

Sammons is a conglomerate whose insurers — Midland National Life and North American Company for Life and Health — hold roughly $130 billion in assets, rank among America’s largest sellers of annuities, and serve millions of people.

If you’ve never heard of Sammons, that’s unsurprising, despite its size. It’s a private company that hasn’t gotten much national coverage.

Charles Sammons took control of Reserve Life Insurance Company in Dallas in 1938 and spent the next four decades adding businesses in communications, industrial equipment, travel, and hospitality. The company became Sammons.

In 1978, Sammons launched an Employee Stock Ownership Plan (ESOP), making it one of the largest employee-owned companies in America. Which means the people with the most riding on what follows — other than perhaps the life insurance and annuity policyholders — are Sammons workers, whose retirement accounts hold the company’s stock.

The Sammons relationship with Guggenheim is older than Guggenheim itself.

Before Guggenheim Partners existed, Mark Walter co-founded Liberty Hampshire, an investment management firm in Chicago. Sammons bought into the firm. When Walter combined it with the newly created Guggenheim Partners (alongside partners including a descendant of the eponymous Guggenheim), Sammons came along.

That’s how a Dallas ESOP ended up as the largest shareholder of a firm named for a Gilded Age smelting, mining, and philanthropic dynasty — and how Walter’s firm ended up managing the Sammons insurance empire’s money. The concentration that followed wasn’t the result of a bake-off among asset managers; it was baked in from the start, a quarter century ago.

At the top of the Sammons org chart sits Sammons Enterprises, the Dallas holding company.

Below it are an industrial arm, a real estate arm, and the crown jewel: Sammons Financial Group (SFG), headquartered in West Des Moines, Iowa.

SFG owns various life and health insurers, including Midland National and North American.

As of 2023, Guggenheim ran 87% of SFG’s assets and collected roughly $75 million a year in disclosed fees. To put that in perspective: in the National Association of Insurance Commissioner’s data, handing a meaningful share of your portfolio to a single outside manager is overwhelmingly a small-company practice. 96% of insurers that do it have under $5 billion in assets, generally because they’re too small to run their own investment departments.

Among giants, the model exists in one well-known form: the private-equity-partnered insurers, like Apollo with Athene. The manager relationship is disclosed on page one of every filing, scrutinized by rating agencies, and debated by regulators precisely because of the conflicts it creates. Sammons runs the same concentrated model with the relationship labeled “unaffiliated.”

Strange as it was, the relationship between Sammons and Guggenheim had not been a secret.

Guggenheim Private Investments (GPI), a registered investment adviser within Guggenheim, dedicates an entire paragraph of its annual filing to the numerous conflicts created by Guggenheim’s multifaceted relationship with Sammons.

Among them: Sammons “holds an indirect, substantial economic interest in Guggenheim Capital;” “Sammons is a primary lender in a facility that provides leverage to a Private Fund;” and “Sammons is a significant individual source of annual advisory fees paid to one of GPI’s affiliates.”

But while Guggenheim continues to report the relationship across various filings, there is evidence that Sammons took steps to distance itself (at least on paper) from Guggenheim.

On page 140 of a January 2025 filing, the Sammons-owned insurer Midland National writes: “In the third quarter of 2024, Sammons Enterprises restructured its investment in Guggenheim Capital Partners which resulted in Guggenheim Capital and other related entities no longer being considered an affiliate or related party of the Company.”

To be clear: Sammons didn’t sell its Guggenheim shares, as far as the filings reveal. Instead, it converted a stake of approximately 30% economic share and 46% voting control into what Guggenheim’s most recent filing describes as an “indirect, substantial economic interest.”

What does this mean? It’s not exactly clear. Again, neither Sammons nor Guggenheim replied to repeated requests for comment. But it appears that Sammons disclosed that it has kept its economic stake while shedding its voting control.

By giving up those voting rights, Sammons allowed itself under Iowa regulations to reclassify certain assets from affiliated to unaffiliated thereby avoiding regulatory scrutiny.

What followed was an erasure across Sammons documents.

Roughly $2.1 billion of investments Midland National had carried as “affiliated” — which appear to be its Guggenheim-managed vehicles and Guggenheim bonds were — reclassified as unaffiliated.

The 2023 audited statements devoted a full paragraph to the relationship by naming GPIM (Guggenheim Partners Investment Management) as manager of 87% of the portfolio. It itemized $75 million in annual fees and $88 million of fixed maturity securities that “Guggenheim and its affiliates consolidate.” By 2025, Guggenheim is named zero times, and GPIM only once, in a footnote about securities the company values privately.

An investor deck in March 2025 called Guggenheim “our core manager with 88% of overall AUM,” whereas one in the fourth quarter of that same year made no mention of the firm.

This is an eerily familiar fact-pattern to anyone following the Delaware Life and Clear Spring investigations — in which the Department of Justice is probing whether Walter hid the related party ties between his insurers and his businesses.

Makes you wonder: What, exactly, distinguishes Sammons from Delaware Life and Clear Spring Life?

ON THE BOOKS

Hunterbrook reviewed the Sammons insurers’ investment filings line by line, from 2023 through the most recently reported quarter of 2026.

Beyond the roughly hundred billion dollars Guggenheim manages for Sammons, according to recent financial statements, we calculated that billions worth of Guggenheim-linked investments still sit in the insurers’ own portfolios.

Most of it is not labeled Guggenheim at all. Some sits in vehicles with names that give nothing away (except, perhaps, a taste for Herzog films): Fitzcarraldo Funding. Molly Aida. Campa. Orinoco. Teton. But Guggenheim’s own SEC filings reveal that these are its private funds and investment vehicles.

And at least one of those mystery vehicles can now be traced all the way to Mark Walter himself.

Take Teton Holdings I, a Guggenheim-managed investment owned almost entirely by Sammons insurers. The insurers carried the investment at roughly $197 million in 2022. By the end of 2025, it was worth only about $41 million on their books — a decline of more than $156 million.

An Iowa insurance filing identifies Teton Holdings I as the vehicle formerly known as G-Prairie LLC, managed by G-Prairie MM LLC, which the filing says is directly controlled by Guggenheim Partners Investment Management.

Then comes the missing link. Florida corporate records for Teton Ridge LLC list Teton Holdings I LLC as a member — and give its address as “c/o Guggenheim Partners Investment Mgmt.”

And Teton Ridge itself says the Western-sports and media company is owned by TWG Global, the investment conglomerate led by Walter and Thomas Tull. Walter is also Guggenheim Partners’ CEO.

The filings create a direct chain: Sammons insurers → Guggenheim-managed Teton Holdings I → Teton Ridge → TWG / Mark Walter → CEO of Guggenheim → part-owned by Sammons.

In practice, that means Sammons’ life-insurance and annuity money — from ordinary Americans — helped fund Teton Ridge, a company whose assets include The American Rodeo, a professional bull-riding team, The Cowboy Channel, a Western-lifestyle magazine, a Hollywood production studio and performance-horse operations — an unusually colorful destination for policyholder reserves.

We found no public document explaining why Sammons’ investment in Teton Holdings I lost more than two-thirds of its reported value, and the records do not establish that the decline has anything to do with the federal investigation into Walter’s other businesses. But they do show something that was previously hidden behind the name of an opaque private vehicle: Sammons insurance-company money was invested in a business inside Walter’s TWG empire, the same empire under DOJ investigation.

Sammons is directly exposed to the insurers under federal investigation, too, the ones that led to the private jet tarmac device seizure. Midland and North American hold $150 million of Delaware Life notes, purchased privately in 2016 — and swapped into a new instrument in January 2026, before the grand jury subpoenas arrived in February.

North American, meanwhile, has transferred about $367 million of liabilities to Clear Spring under a reinsurance deal. This lowers North American’s reserve requirements by ceding liabilities to Clear Spring, one of the Walter-controlled insurers that is under investigation. If Clear Spring can’t pay, North American has to rebuild the reserves, and the bill lands on Sammons’ policyholders.

This isn’t just leftover exposure from the old days, slowly running off. The relationship is still writing new checks — big ones. And shifting the capital multiplies the assets that generate fees for Guggenheim and the dividends for the owners of the insurers.

Last year, roughly a full year after the “de-affiliation,” Guggenheim’s lending arm launched a $400 million CLO, a bundle of loans that Guggenheim itself had originated, packaged, and managed. Sammons’ insurers took down $208 million of it — more than half the deal — according to their own investment schedules, apparently rolling their stake in the prior 2023 paper.

To be clear: no one has been charged with anything, and there is no indication Sammons is a subject, target, or witness in any investigation. Everything described here is, on the face of the filings, disclosed to and ostensibly permitted by regulators.

But consider the two stories side by side.

The government’s theory at Delaware Life is that related-party exposure was made to look unrelated by concealment. At Sammons, the same reporting outcome was achieved through corporate engineering.

Ratings agencies cut status after the corrected disclosures. After Delaware Life restated its disclosures — increasing its reported related-party investments from $1.4 billion, about 3% of its portfolio, to more than $17 billion, as much as 42% — S&P Global and AM Best each cut their outlooks to negative. Fitch put the company on Rating Watch Negative.

So far, Sammons has stayed out of this spotlight. That may not last.

Over the weekend, the Sammons insurers released their latest quarterly statements — the first since the firm’s CEO announced his retirement at the beginning of the month, after 16 years. (The CEO of Sammons Financial’s parent conglomerate Sammons Enterprises is unchanged).

Once again, Guggenheim was absent from the related-party note. But it was not absent from the filings.

Both insurers listed GPIM among the firms authorized to make investment decisions on their behalf. Both placed a “U” next to its name: unaffiliated. In one place, Sammons discloses that the insurers were actively buying, redeeming, and holding Guggenheim securities in this past quarter.

Whether recent scrutiny will change the disclosures in the next quarter remains to be seen.

Either way, Sammons and Guggenheim made for a helluva team for a long time, as they grew, together, into global giants.

But all great dynasties eventually end. Kobe and Shaq. Magic and Kareem.

AUTHORS

Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life. Sam is based in New York City.

Matthew Termine is a former corporate lawyer with significant experience advising companies operating within regulated industries. Matt led Hunterbrook’s investigation and reporting on United Wholesale Mortgage. In 2017, Matt was credited by the Wall Street Journal, among others, for identifying suspicious mortgage loan transactions that led to several successful criminal prosecutions, including that of a prominent political operative and the chief executive officer of a federally chartered bank. He is a graduate of Trinity College and Fordham University School of Law.

JD Jean-Jacques joined Hunterbrook from Goldman Sachs, where he worked as an investment banker. He was editor-in-chief of Howard University’s newspaper, The Hilltop, and wrote for The Exonian at Phillips Exeter Academy. Among other recognitions, JD was a White House Correspondents’ Association Scholar and was named Student Journalist of the Year by The National Association of Black Journalists. He graduated from Howard with a B.A. in history.

EDITOR

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

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BY: Till Daldrup

EDITOR: Vikas Kumar

Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any positions related to this article at the time of publication. Positions may change at any time. Full disclosures on our website.

Solar is coming home.

That, at least, was the impression given in May by press coverage of JinkoSolar’s sale of its Florida manufacturing plant. “US private equity firm acquires controlling stake in JinkoSolar’s American operations,” a Solar Power World headline read. “Major Chinese solar panel manufacturer JinkoSolar Holding has agreed to sell a 75.1% stake in subsidiary Jinko Solar (U.S.) Industries to American private equity firm FH Capital under plans announced Friday,” Nikkei wrote.

Jinko’s divestiture could allow its solar panel operation in Jacksonville, Florida, to remain eligible for Biden-era federal tax credits that pay module assemblers 7 cents per watt produced. For Jinko’s U.S. subsidiary, they are crucial. The 45X credit subsidizes the production of solar energy components and other goods in the U.S. In 2025, JinkoSolar’s U.S. operations received $146 million from the credit, according to the company’s annual report. This was more than three-quarters of the net profit its Florida plant reported that year in Jinko’s Shanghai Stock Exchange disclosure.

New Trump administration rules stipulate that a U.S. solar operation becomes a “foreign-influenced entity” and therefore loses its tax credit eligibility, if a single Chinese company or other specified foreign entity owns at least 25% of it (among other rules designed to limit foreign influence). “Specified foreign entities” are the governments, citizens, and companies of China, Russia, Iran, and North Korea, anything they control, and entities on certain U.S. government blacklists.

These foreign-entity rules are one arm of a broader U.S. crackdown on Chinese solar that also includes anti-dumping duties on solar cells from Chinese manufacturers’ Southeast Asian plants, a forced-labor import ban, and a 15% tariff and minimum import prices on polysilicon, wafers, cells, and modules that was announced last week.

Jinko sold 75.1% of its U.S. business to what press coverage called an “American” firm and kept a stake just below the ownership threshold, which means the Florida plant could remain eligible for tax credits.

But a Hunterbrook analysis of corporate filings in the U.S., the British Virgin Islands, and Hong Kong suggests that FH Capital, the private equity firm that announced it is acquiring the majority stake in Jinko’s U.S. operations through a designated affiliate, is not American at all but is actually based in Hong Kong. It is controlled by the family of Zhengrong Shi, known as the “Sun King,” the founder and owner of several major Chinese solar companies.

FH Capital confirmed to Hunterbrook in a written statement that Shi himself was involved in the deal. “Dr. Shi is an internationally recognized solar scientist and entrepreneur who brings decades of technical and industry experience to his work,” the statement reads. “In that capacity, he lent his technical and industry expertise during the Jinko transaction.”

Dennis Shi, his son, is now the board director of Jinko’s former U.S. business, which was renamed Jax Power Industries Inc. in July, according to Florida corporate filings. Dennis is also president at Sunman Energy, his father’s Shanghai-headquartered solar module company, according to an Australian news report from March. Sunman manufactures its panels in mainland China, according to pv magazine. Its new manufacturing facility in the U.S. was still under construction and a plant in Australia in planning stages as of December 2025, the magazine reported.

Several tax law experts, however, told Hunterbrook that despite the Shis’ ties to China, the arrangement would possibly not trigger the new foreign influence restrictions as written. That’s because Shi and his family are Australian citizens. The Treasury Department also hasn’t released guidance on whether Hong Kong is going to be considered China under the foreign entity of concern (FEOC) rules, according to the tax experts. FH Capital’s Hong Kong ties were first reported by Bloomberg.

FH Capital told Hunterbrook that it is “an investment advisory firm that operates internationally,” and that the acquisition was completed through a Delaware entity called FH JKV Holdings Limited.

“FH Capital is not a shareholder or investor in the restructured Jinko Solar U.S. manufacturing entity,” the company said. “It acted as an investment adviser in connection with the transaction, including supporting its structuring, negotiation and execution. FH Capital’s advisory role should not be conflated with ownership.”

Therefore, according to the apparent logic behind the deal, its Hong Kong ties would not matter under FEOC rules.

Hong Kong’s status isn’t the only open question. While Congress’s restrictions are in force, the Treasury Department has yet to issue the regulations that spell out how exactly key tests will be applied under the law. Congress set a deadline for the end of the year.

Two other features of the deal could become problematic depending on how Treasury addresses these questions. Both concern Jinko’s continued influence over the Florida plant.

First, there could be a trademark problem: In its Shanghai Stock Exchange filing, Jinko said that it would allow the Florida plant’s modules to continue “to be sold to third parties under the Company’s brand in accordance with agreed terms,” based on a translation from the Chinese. Jinko’s U.S. trademarks are owned by its Chinese parent company, which means its former Florida business could become ineligible for tax credits: The paid use of a specified foreign entity’s intellectual property by a domestic solar operation means that this U.S. producer is under the “effective control” of that foreign entity, according to the Trump administration’s new rules. But the Treasury Department has not said whether the rules cover trademarks and logos or only production technology like patents and manufacturing know-how — leaving open whether a brand license alone is enough to trip the wire.

Second, there could be a debt issue: Only 51% of the $191.5 million purchase price was paid when the deal closed. The remaining $94 million was deferred into two tranches that come due only after “certain conditions” are met, according to Jinko’s Shanghai Stock Exchange disclosure, but the document does not specify what those conditions are, and it is unclear whether the payments have since been made. That money is owed by FH Capital’s designated affiliate, which owns 75.1% of the plant, making Jinko a major creditor of the plant’s owner. Under the FEOC rules, an entity becomes “foreign-influenced” if specified foreign entities hold 15% or more of its debt. Whether the $94 million exceeds 15% of the acquisition vehicle’s total debt can’t be determined from public filings.

As with the trademark question, the Treasury Department has not given specific guidance on this point, according to experts: Whether a deferred purchase price counts as “debt” under that test and whether a parent company’s foreign-influenced status would taint the plant that actually claims the credits are questions the Treasury Department’s interim guidance explicitly left for future rulemaking.

Until the Treasury Department answers, Jinko’s deal sits in a gray zone: It’s structured to clear the rules as written, but the Florida plant potentially faces exposure on the points the rules haven’t yet settled.

“The Trump administration and the Treasury Department are very clear-eyed about how Chinese companies will restructure and try to get creative to avoid U.S. policies designed to target them specifically,” Nick Iacovella, the executive vice president and head of public affairs and communications at the Coalition for a Prosperous America, told Hunterbrook. The lobbying organization for domestic manufacturers had celebrated Jinko’s divestiture as part of a broader retreat of Chinese solar companies in the U.S. in a blog post.

“I don’t think what Jinko has done will pass the smell test for the administration,” Iacovella said.

“We do not speculate about potential future changes in U.S. policy,” FH Capital told Hunterbrook.

Jinko Solar and an executive of Jax Industries did not respond to a request for comment.

FH CAPITAL’S TIES TO HONG KONG

The likely reason other media outlets that covered the Jinko deal thought FH Capital is an American company: It has an office in New York, according to its website. And the acquisition vehicle it used in the Jinko deal is a Delaware-registered corporation, according to Jinko’s Shanghai Stock Exchange filing.

But the office the private equity firm claims at 1325 Avenue of the Americas in Manhattan is actually an office rental space owned by Regus.

“FH Capital has never described itself as an American or U.S.-based private equity firm,” FH Capital told Hunterbrook, saying that it maintains “a presence in Sydney, Hong Kong and New York.”
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Its ties to Hong Kong appear to be especially deep, according to a Hunterbrook analysis of corporate filings.

FH’s privacy policy and terms of service on its site revealed its full name (the firm appears to have deleted them within the past two weeks): “Fortune Harmony Investments Limited,” a company that’s registered in Hong Kong, corporate records show. It also lists a Hong Kong office tower as its official postal address (though it’s also just a rental space, same as its New York address).

According to FH Capital’s announcement about its deal with Jinko, the private equity firm is “led by” Sanjeev Chaurasia, its managing partner and chief investment officer, who is currently listed as the only team member on FH’s website. Chaurasia previously was a managing director at Credit Suisse and “led JinkoSolar’s IPO on the NYSE in 2010,” FH’s press release said. Chaurasia is based in Hong Kong, according to his LinkedIn account.

“Mr. Chaurasia is an Indian citizen who divides his time among New Delhi, Hong Kong and New York. He was previously based in New York before Credit Suisse transferred him to Hong Kong, where amongst his responsibilities he led investment banking for the sector across the Asia-Pacific region,” FH Capital told Hunterbrook.

ES Foundry, a solar cell manufacturer with a plant in Greenwood, South Carolina, that FH Capital presented as part of its “portfolio” on its website, lists Chaurasia and Dennis Shi as its directors in an SEC filing. It also lists a Hong Kong phone number.

And solar project developer hep global GmbH, a company that announced it has gained FH Capital as a “financial investor,” seemingly confirmed the location of the firm’s headquarters in a May ad hoc disclosure: “FH Capital is headquartered in Hong Kong and has a diversified position in the United States through investments in module manufacturers and project developers, among other things.”

“FH Capital is not an investor or shareholder in either hep global GmbH or ES Foundry,” FH Capital told Hunterbrook. “Its role has been strictly advisory: it advised the parties that invested in hep global GmbH and has advised shareholders of ES Foundry.”

FH Capital listed ES Foundry as part of its portfolio on its website as recently as August 4, according to a screenshot saved by Hunterbrook, but that mention has since been deleted from the page.

Jinko’s disclosures with the Shanghai Stock Exchange about its divestiture state that FH Capital is an investor in ES Foundry: “Its portfolio includes investments in ES Foundry — a company focused on the manufacturing and sales of photovoltaic cells in the U.S.”

Jinko also named the specific entity that bought the majority stake in its Florida plant: FH JKV Holdings Limited, a company registered in Delaware. Jinko also disclosed that this entity is actually controlled by a British Virgin Islands entity called Prosper Bright Ventures Limited.

And the company named the person who ultimately controls FH JKV Holdings: Zhang Wei.

THE FAMILY TIES BEHIND THE DEAL

It didn’t take Chinese business media long to figure out who Zhang Wei is. Reporters matched a partially masked passport number (a standard disclosure in Chinese deal announcements) to an IPO prospectus of Zhengrong Shi’s polysilicon company Asia Silicon, which identified Zhang Wei as his wife.

According to Hong Kong corporate filings, Zhengrong Shi and Zhang Wei founded FH Capital, or Fortune Harmony Investments, together in 2023, holding one share each. Shi exited the company in 2024, and both his and his wife’s shares were transferred to Ascend Pioneer Group Limited, a British Virgin Islands entity. Zhang Wei is the sole board director of that entity, according to British Virgin Islands filings obtained by Hunterbrook.

While Zhengrong Shi was reportedly born in China, he is an Australian citizen, and so is his wife. But both are also Hong Kong residents, according to the Hong Kong corporate registry.

Their sons, Dennis Shi and Mitchell Shi, are also both Australian citizens. Both are deeply involved with the family business.

Dennis is president of Sunman Energy. Mitchell served as an assistant to the CEO of Siltrax – his father, who also co-founded the Sydney-based hydrogen venture.

Dennis and Mitchell Shi are also both directors of the British Virgin Islands entity that controls the Delaware-registered acquisition vehicle in the Jinko deal.

A team page on FH Capital’s website listed them both as executive directors of the firm. The Shis were removed from this page between April 11 and the deal announcement on May 8. Only Chaurasia’s bio remained on the website.

Dennis Shi appears to play a special role after the deal with Jinko: He’s now the only board director listed for the renamed Florida entity Jax Power. Michael S. Favo, the Jacksonville plant’s longtime general manager under Jinko’s ownership, is now Jax Power’s president.

In short: Zhengrong Shi’s family appears to have taken control of a 2 GW solar module plant in the U.S. It’s a comeback of sorts for the businessman nicknamed the “Sun King.”

Shi, who was born in Yangzhong, China, earned his Ph.D. at the University of New South Wales under solar pioneer Martin Green, took Australian citizenship, then returned to China in the early 2000s to found Suntech. He built the company into one of the world’s largest solar module makers. Suntech went public on the New York Stock Exchange in December 2005. In 2006 Shi was the richest man in China and his stake in Suntech was worth $1.7 billion.

Time Magazine in 2007 named him one of its “Heroes of the Environment” (alongside Al Gore, Mikhail Gorbachev, David Attenborough and then-Prince Charles) and media coverage identified him as the world’s first “green billionaire.”

But the empire collapsed: Suntech fell apart after it was discovered that bonds pledged to it as loan collateral by an affiliated fund, which Shi part-owned, apparently never existed. Shi stepped down as CEO and was a defendant in a U.S. investor lawsuit that settled for $5 million. Suntech eventually went bankrupt and was delisted from the NYSE.

After losing Suntech, Shi spent the next decade rebuilding quietly through ventures he founded and his family runs: He founded Sunman, a Shanghai maker of lightweight solar modules. He remained the force behind Asia Silicon, the family’s Qinghai polysilicon producer, which abandoned its 2020 Shanghai IPO. And he co-founded Siltrax, the Sydney hydrogen startup.

Chinese media is framing the Jinko acquisition as a major step in Shi’s redemption arc: “Zhengrong Shi, the godfather of photovoltaics, returns,” a TMTPost headline read.

“Zhengrong Shi, the ‘godfather of photovoltaics’ who had been silent for a long time, has once again stirred up the market,” China Business Daily reported. “From founding Wuxi Suntech in 2001, to his low-key retreat, and now to taking over overseas assets, Zhengrong Shi has faded from public view over the past two decades, but he has never truly left the photovoltaic industry.”

The Jacksonville solar module plant is now in the hands of the family of one of the most influential men in the Chinese solar industry. Is Jinko’s U.S. business truly free of foreign influence under its new majority owner? And is this the type of deal that the Trump administration’s rules were designed to allow?

UNDER THE INFLUENCE

Several tax law experts told Hunterbrook that the Jinko deal appears to be sound on paper under the new FEOC rules: The main corporate officers involved, the Shi family and Sanjeev Chaurasia, who is an Indian citizen according to the Hong Kong corporate registry, are apparently not Chinese citizens or nationals. And that’s what’s relevant. An individual’s ties to or positions at Chinese companies are inconsequential under the tax credit rules, the experts said.
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“Shi Zhengrong and Zhang Wei became Australian citizens in the mid-90s. Neither holds dual citizenship,” FH Capital told Hunterbrook.

FH Capital may be based in Hong Kong, but the Treasury Department hasn’t released specific guidance on whether the special administrative region will be considered part of China under the FEOC rules, two tax experts said. One tax lawyer told Hunterbrook he’s working under the assumption it will be considered China “until told otherwise by Treasury.”

But even if it were considered PRC territory: While FH Capital announced the Jinko deal under its own name, the actual acquisition was carried out via Delaware- and British Virgin Islands-registered vehicles that are themselves controlled by Shi’s family members and Chaurasia, according to corporate filings obtained by Hunterbrook.

“The acquisition was executed through FH JKV Holdings Limited, a Delaware entity controlled by Prosper Bright Ventures Limited, a BVI entity whose directors are Dennis Shi, Mitchell Shi and Mr. Chaurasia,” FH Capital told Hunterbrook. “According to Jinko Solar’s Shanghai Stock Exchange disclosures, Zhang Wei is the ultimate controller of the ownership structure.”

That would mean there is no direct connection to China or Hong Kong.

What could potentially become an issue: Jinko was only paid about half of the purchase price for its Florida operation at the closing of its deal with FH Capital. The rest of the payment, about $94 million, was deferred and is supposed to be transferred in two additional tranches, according to Jinko’s corporate filing: a first one of about $30 million, and a second of about $64 million. It’s unclear when and under which conditions those transactions are supposed to be made or whether one or both of them have already been completed.

That means Jinko may still be a major creditor of FH Capital’s designated affiliate FH JKV Holdings, which is the entity that controls the Florida plant, and that debt could make that affiliate “foreign-influenced” under the Trump administration’s FEOC rules. An entity is considered foreign-influenced if 15% or more of its debt is held by one or more specified foreign entities.

But the Treasury guidance leaves two things unclear: whether money owed as a deferred purchase price counts as “debt” under that test, and whether a parent company that fails it drags down the plant that actually claims the credits. The Treasury Department has said it will address such questions in future rulemaking.

Another possible red flag: Jinko said in a corporate disclosure that it would allow Jax Power to continue to sell solar modules “under the Company’s brand.” But Jinko’s U.S. trademarks, including its logos, are owned by its Chinese parent company, according to U.S. Patent and Trademark Office records.

Under the new FEOC rules, paying to license intellectual property from a specified foreign entity after July 4, 2025, puts the licensee under that entity’s “effective control,” which could cost the plant its tax credit eligibility. But the Treasury Department did not specify whether the rule covers soft intellectual property like trademarks and logos, or only patented hardware and production technology. It’s unclear whether using Jinko’s brand would mean that Jax Power would have to forgo the tax credits, tax experts told Hunterbrook.

Nick Iacovella from the Coalition for a Prosperous America expects the Treasury to address any open questions in reaction to divestiture deals like Jinko’s. “The longer that the Treasury waits to put the guidance out the more time that they’ll have to see how Chinese companies are restructuring to make sure that there aren’t any loopholes in the guidance,” he said.

“Multiple reputable law firms advised the buyer and seller on the Jinko Solar transaction, including on the post-closing structure and its alignment with applicable OBBBA requirements,” FH Capital told Hunterbrook, referring to the One Big Beautiful Bill Act, which includes the FEOC rules.

The tax credits are the Florida plant’s economic engine. Under Section 45X, module makers earn 7 cents for every watt produced and sold. For JinkoSolar’s U.S. operations, that was worth $146 million in 2025, more than three-quarters of the Jacksonville plant’s net profit that year.

And Jinko is not alone: Several other Chinese companies divested from their U.S. businesses over the past few months after the Trump administration introduced the new rules. LONGi reportedly cut its stake in the 5 GW plant in Pataksala, Ohio, that it runs with U.S.-based Invenergy, to “stay below” the FEOC ownership threshold. Canadian Solar moved its U.S. solar manufacturing unit from its Shanghai-listed subsidiary CSI Solar to sit under its Nasdaq-listed parent company. And JA Solar had already sold its entire Phoenix facility to American tech manufacturing company Corning before the new rules took effect.
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Jinko itself spelled out the stakes in its latest annual report, warning that under the new law “the applicability of advanced manufacturing tax credits to our U.S. subsidiary in 2026 and future years is uncertain, which could have a material adverse impact” on its business. Across the industry these credits are routinely sold to corporate buyers. First Solar alone has transferred more than $2 billion of them. Jinko has disclosed that in 2025 it sold $128 million of accumulated credits for $120 million in cash, without naming the buyers.

Whether the Jacksonville plant has potentially forfeited its tax credit eligibility is unclear. Tax credits are self-assessed: Jax Power will decide what to claim on tax returns the public likely never sees, and any IRS challenge would possibly unfold in secret, surfacing only if a dispute lands in court. Quicker verdicts will likely come from the market, where credit buyers’ lawyers and insurers now demand assurances that no “prohibited foreign entity” lurks in the chain.

Until then, a U.S. business that collected $146 million in federal subsidies last year belongs to the family of the returning Sun King.

AUTHOR

Till Daldrup is an investigative journalist who joined Hunterbrook from The Wall Street Journal, where he focused on open-source investigations and content verification. In 2023, he was part of a team of reporters who won a Gerald Loeb Award for an investigation that revealed how Russia is stealing grain from occupied parts of Ukraine. He has an M.A. in Journalism from New York University and a B.S. in Social Sciences from University of Cologne. He’s also an alum of the Cologne School of Journalism (Kölner Journalistenschule).

EDITOR

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

Jean Wang and Blake Spendley contributed reporting.

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© 2026 Hunterbrook Media LLC. All rights reserved. Use of this website is strictly governed by our Terms of Use. The content herein is furnished on an “AS IS” basis without any form of express or implied warranty. For information regarding our privacy practices, please refer to our Privacy Policy.

Hunterbrook Media LLC (”Hunterbrook Media”) is an investigative news organization. Hunterbrook Media is affiliated with Hunterbrook Capital LP (”Hunterbrook Capital”), an exempt reporting adviser with the U.S. Securities and Exchange Commission that serves as investment adviser to one or more investment funds. Hunterbrook Media and Hunterbrook Capital are legally separate entities under common control. Hunterbrook Capital’s investment activities are one source of funding for Hunterbrook Media’s journalistic operations. Hunterbrook Capital may hold long positions, short positions, positions through derivative instruments including options and swaps, or no position in any security covered or mentioned on this website. Consistent with applicable policies and procedures, Hunterbrook Capital may establish, modify, or close positions in covered securities before or after the publication of any Hunterbrook Media article. Following publication of any article, Hunterbrook Capital will continue transacting in covered securities for an indefinite period and may be long, short, or flat at any time thereafter, regardless of any position described at publication. Hunterbrook Media has no obligation to update any article or disclosure to reflect subsequent changes in Hunterbrook Capital’s positions.

Nothing on this website constitutes investment advice, a recommendation to buy, hold, or sell any security, or a solicitation to purchase or sell any securities. No securities shall be offered or sold in any jurisdiction where such activities would be contrary to applicable securities laws. Hunterbrook Media is not a registered investment adviser in the United States or any other jurisdiction. Nothing herein should be construed as investment advice or a recommendation of any kind. This information should not be relied upon as a substitute for independent research or professional financial, legal, or tax advice.

This website may feature forward-looking statements reflecting Hunterbrook Media’s current views. Such statements, identifiable by terms including but not limited to “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “should,” and “will,” are inherently speculative and subject to risks and uncertainties. Actual results or outcomes may substantially deviate from those projected. Hunterbrook Media expressly disclaims any obligation to update or revise any forward-looking statements, regardless of subsequent developments or new information.

The information presented is current as of the date indicated. No representation regarding the completeness or timeliness of this information is made. Some information is sourced from third parties and, while believed to be reliable, has not been independently verified, and its accuracy or completeness is not guaranteed. Hunterbrook Media is not affiliated with any sites linked to this website. Investment in securities and other financial instruments involves significant risk, including the potential loss of principal. Users are advised to conduct their own due diligence and consult professional advisors before engaging in any investment activity. Use of Hunterbrook Media’s content is entirely at the user’s risk. Users shall not use this site for any illegal or prohibited purposes and shall comply with all applicable local, state, national, and international laws and regulations.

Should any provision of these Terms of Use be adjudged invalid or unenforceable, the remaining provisions shall remain in full force and effect. Trademarks contained in links to third-party websites belong to their respective owners. Hunterbrook Media retains copyright on all text, content, graphics, and trademarks displayed on this site.

Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any positions related to this article at the time of publication. Positions may change at any time. Full disclosures below.

By: Matthew Termine, Sam Koppelman

Editor: Vikas Kumar

United Wholesale Mortgage had been the largest home lender in America. Its CEO, erstwhile decabillionaire Mat Ishbia, bought the Phoenix Suns basketball team. Then Hunterbrook Media exposed UWM for misleading homebuyers. By 2026, the company’s balance sheet had already weakened from Ishbia stripping $3 billion of cash via dividends and distributions from the company. Then Ishbia made a large directional bet on interest rates. It was a bad bet. So last week, UWM suspended its dividend and signed an emergency rescue deal with the distressed situations desk at Oaktree.

Ishbia claims the bet was to hedge the potential acquisition of Two Harbors. SEC documents point to a different, more plausible explanation: a massive wager — by a CEO who had insisted he didn’t trade on rates — that helped break the company’s balance sheet. In response to a request for comment, UWM said: “UWM has been transparent in its public filings and communications, and we do not view Hunterbrook as a credible or objective source for determining the facts”.

It started with a pugnacious voicemail about a competitor.

“We fucking took those cocksuckers down,” Ishbia told an ally in a voicemail obtained by Hunterbrook. “And we’re gonna keep fucking sticking it to them forever.”

In April 2024, Hunterbrook published our debut investigation, including that message.

The months-long, data-driven deep dive revealed that many mortgage brokers that UWM and Ishbia marketed to homebuyers as “independent” were actually sending essentially all their business to UWM. The company said the article was full of “numerous lies.”

The Ohio attorney general later sued UWM over similar conduct; that lawsuit is ongoing. Homebuyers brought a federal class action against UWM; a judge dismissed several of the claims, the others survived a motion to dismiss. UWM called the lawsuit a “sham.”

Hunterbrook’s investigation also spotlit that UWM management was draining cash from the company via an unsustainable annual dividend of more than $600 million. Most of that money went to Ishbia and his family, which owned the vast majority of the company’s shares. Ishbia has also sold UWM stock aggressively over the past several years, selling more than $600 million worth of $UWMC.

Ishbia, who walked onto the basketball team at Michigan State, used the gains from the $UWMC’s SPAC-backed public listing to purchase the Phoenix Suns. He even took out a massive margin loan with J.P. Morgan against his $UWMC shares to fund the transaction.

How did the largest mortgage lender in the country run out of money?

Beyond the dividend, UWM now says that its latest loss — $600 million — was a one-time mistake related to a failed proposed acquisition of Two Harbors Investment Corp. But UWM’s own SEC filings undercut that claim. And the facts appear to indicate something very different: a naked wager intended to prop up the company and avoid the very rescue UWM ended up needing.

THE STORY ISHBIA TELLS

Since UWM disclosed the loss on August 5, Ishbia’s explanation — across an earnings call, investor deck, and company statements to the press — is that the big surprise loss was a hedge: a prudent, deal-related, one-time protection gone wrong.

The idea: UWM had planned to buy Two Harbors, an entity that owned a significant book of mortgage servicing rights (MSRs). MSRs gain value when rates rise and lose value when rates fall. So Ishbia made a bet on rate cuts, ostensibly to protect against Two Harbors’ assets becoming less valuable between when UWM offered to buy the company and when the deal was set to close.

At least that’s the story.

“We were over-hedged, if you think of it that way, protecting against the Two Harbors transaction,” Ishbia said on the August 6 call. “The market moved against us, and it’s a one-time event that won’t happen again.”

“When you’re going through and acquiring a company like Two Harbors and a massive MSR book, then our MSR book becomes double the size of what we’ve always managed,” he explained.

The narrative has stayed consistent.

The company’s investor deck stated that UWM “recognized a $603M Q2 ‘26 derivative loss tied to exposure it expected to assume in connection with the TWO transaction.”

A spokesperson told HousingWire the net loss was “primarily driven by a unique hedge-related event tied to the anticipated Two Harbors MSR transaction,” calling it “a quarter-specific mark-to-market impact” that “does not reflect the underlying strength of UWM’s core business.”

Press outlets have taken the explanation at face value, too. “UWM’s situation became acute in the latest quarter after the company took a $603 million loss related to interest-rate hedges—essentially bets that pay off if rates fall,” wrote The Wall Street Journal.

KBW analysts described the quarter’s GAAP miss as “driven by a $603 million loss on interest rate derivatives, which hedged the Two Harbors MSR portfolio,” HousingWire reported. UWM “suffered losses on a hedge position against Two Harbors’ MSR book,” the HousingWire article read, explaining that the deal “would have doubled the size of its MSR book, significantly increasing risk.”

It’s a clean explanation. But the filings suggest a different reason behind the loss: a $27.5 billion bet on interest rates that, at least at moments, may not have been hedging anything at all.

‘WE DO NOT HEDGE OUR MSRS’

A month before announcing the Two Harbors deal, Ishbia told analysts on UWM’s third-quarter 2025 earnings call: “We do not hedge our MSRs, as you are hopefully aware.”

The posture made sense. UWM’s strength is originating mortgages, a business that wins when rates fall because mortgages become more affordable for borrowers. MSRs, by contrast, move in the opposite direction.

This dynamic led Ishbia to call UWM’s strength in origination a “natural hedge” on the most recent earnings call because, again, MSRs gain value with higher interest rates (because people are less likely to refi), while mortgages are more expensive (and thus harder to originate). UWM’s most recent annual filing reflected that strategy: The derivatives disclosures showed the routine pipeline instruments originators usually carry — rate locks and forward loan sale commitments — and no other standing interest rate position.

Then, in the first quarter of 2026, a new line appeared.

UWM’s first-quarter 10-Q, filed in May, disclosed a position that had not existed at year-end: “other interest rate derivatives.” The listed notional value: $27.5 billion, about an order of magnitude larger than the company’s market cap.

By March 31, the position was already a $288 million liability, with a $138.2 million loss running through the first-quarter income statement. Counterparties were holding $670 million of UWM’s cash as margin: more than 40% of the company’s total equity, posted as collateral to keep UWM’s derivatives positions open, the largest of which was the $27.5 billion notional position.

The position stood to lose roughly $360 million from a 25-basis-point rise in rates, based on the sensitivity disclosed by UWM. It was positioned to profit if rates fell: the same direction UWM’s entire origination franchise already leans. A hedge should offset risk. This position appeared to multiply it.

In the second quarter, the 10-year Treasury yield climbed from roughly 4.3% toward what would eventually become an 18-month high. UWM’s position lost another $603 million — $741 million in total across six months — before UWM drastically reduced the position. Book equity fell 38% in a single quarter, from $1.6 billion to $985 million.

Three weeks after the quarter ended, UWM signed the Oaktree term sheet.

TWO HARBORS DEAL DIED IN Q1

So was this ever really a hedge?

Two critical facts suggest that it was not: first, that the Two Harbors deal was already dead prior to the second quarter; second, that the Two Harbors MSR portfolio was already hedged … by Two Harbors itself.

Two Harbors terminated its merger agreement with UWM — signed December 17, 2025 — on March 27, when Two Harbors announced it had agreed to an all-cash offer from CrossCountry Mortgage. UWM’s own 10-Q confirms it received the termination fee “in the first quarter of 2026.”

The writing was on the wall even earlier: On March 16, Two Harbors adjourned its special meeting because the votes to approve the UWM deal weren’t there.

UWM maintained hope. Ishbia continually raised his bid for the asset. But for someone claiming to be interested in hedging, he did not appear to reduce the size of his bet on rate cuts as the TWO deal grew less likely to close.

UWM carried the full $27.5 billion notional position at the beginning of the second quarter — a time at which it had no contract to acquire Two Harbors and only a long-shot proxy campaign urging Two Harbors shareholders to vote down the competing deal. UWM’s stated reason for the loss was a hedge against “exposure it expected to assume in connection with the TWO transaction.” But from March 27 onward, there was no transaction. There was only the trade.

THE TWO HARBORS PORTFOLIO WAS INDEPENDENTLY HEDGED

There is another reason Ishbia’s explanation doesn’t fully make sense: The Two Harbor assets were already hedged by their owner, Two Harbors. So if Ishbia ended up buying the asset, he wouldn’t just be buying the assets, including interest-rate sensitive MSRs; he’d be buying the hedges, too.

Two Harbors, after all, is a mortgage REIT that is in the business of managing mortgage assets with inherent interest rate risk. Two Harbors’ Q1 2026 Investor Presentation shows that its portfolio was subject to only a 1.3% decrease in common book value on a 25 bps decrease in interest rates, amounting to roughly $15 million. Compare this to UWM, whose MSR hedge cost the company almost half its book value.

UWM’S LAWSUIT AGAINST TWO HARBORS DOESN’T MENTION THE LOSS

UWM is now suing Two Harbors, alleging breach of contract and fraud, claiming damages including “lost profits, lost synergies, lost opportunities for capital efficiencies it would have realized in the UWM Merger.”

If the $603 million loss were caused by the collapse of the Two Harbors transaction, it might have been the largest single line item in the complaint. But it’s nowhere to be found.

‍WHAT THE TRADE ACTUALLY LOOKS LIKE

By early 2026, UWM’s balance sheet was strained by years of dividends. The company had distributed roughly $3 billion since 2021. Over 80% went to the Ishbia family. Increasingly, the dividend relied on borrowed money. UWM’s secured credit lines went from zero in September 2025 to nearly $3 billion by June.

A sharp drop in interest rates would have potentially turned things around — leading not just to a refinancing boom for the company’s origination business but also, because of Ishbia’s bet, to a massive trading profit. Instead, rates rose.

The rescue that followed cost the common shareholders their dividend, their place in the capital stack and by the terms of the deal, potentially, one day, the company itself.

UWM, which had previously been governed — without much oversight — by the Ishbia family, now has slots for two Oaktree representatives on the board. If UWM fails to meet certain obligations, Oaktree can take over the entire company. And in the meantime, Oaktree isn’t taking any chances.

Its Investor Rights Agreement contains a clause requiring Oaktree executives to approve UWM’s “capitalization and hedging policy.”

In other words: The days of Mat Ishbia seemingly YOLO trading interest rates may be over.

Hunterbrook reached out to UWM, Two Harbors, and Oaktree with specific questions. Only UWM responded, noting that Hunterbrook provided a tight deadline to respond and offered the following statement:

“Hunterbrook is a hedge fund, not an independent news organization. Considering Hunterbrook’s history of publishing inaccurate allegations that have spawned multiple litigation matters, many of the claims have been resolved in UWM’s favor, it is difficult to view this inquiry as a legitimate journalistic exercise. UWM has been transparent in its public filings and communications, and we do not view Hunterbrook as a credible or objective source for determining the facts.”

AUTHORS

Matthew Termine is a former corporate lawyer with significant experience advising companies operating within regulated industries. Matt led Hunterbrook’s investigation and reporting on United Wholesale Mortgage. In 2017, Matt was credited by the Wall Street Journal, among others, for identifying suspicious mortgage loan transactions that led to several successful criminal prosecutions, including that of a prominent political operative and the chief executive officer of a federally chartered bank. He is a graduate of Trinity College and Fordham University School of Law.

Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. He helped build Fenway Strategies into one of the preeminent strategic communications firms in the country—with side quests speechwriting for Michael Bloomberg, running the surrogate remarks operation on the Biden-Harris campaign, and co-founding Mayday, which is now one of the leading information providers on how to access reproductive health care in states with bans. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets — and occasionally volunteers on a fire speech for a good cause. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life.

EDITOR

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

DISCLOSURES

© 2026 Hunterbrook Media LLC. All rights reserved. Use of this website is strictly governed by our Terms of Use. The content herein is furnished on an “AS IS” basis without any form of express or implied warranty. For information regarding our privacy practices, please refer to our Privacy Policy.

Hunterbrook Media LLC (”Hunterbrook Media”) is an investigative news organization. Hunterbrook Media is affiliated with Hunterbrook Capital LP (”Hunterbrook Capital”), an exempt reporting adviser with the U.S. Securities and Exchange Commission that serves as investment adviser to one or more investment funds. Hunterbrook Media and Hunterbrook Capital are legally separate entities under common control. Hunterbrook Capital’s investment activities are one source of funding for Hunterbrook Media’s journalistic operations. Hunterbrook Capital may hold long positions, short positions, positions through derivative instruments including options and swaps, or no position in any security covered or mentioned on this website. Consistent with applicable policies and procedures, Hunterbrook Capital may establish, modify, or close positions in covered securities before or after the publication of any Hunterbrook Media article. Following publication of any article, Hunterbrook Capital will continue transacting in covered securities for an indefinite period and may be long, short, or flat at any time thereafter, regardless of any position described at publication. Hunterbrook Media has no obligation to update any article or disclosure to reflect subsequent changes in Hunterbrook Capital’s positions.

Nothing on this website constitutes investment advice, a recommendation to buy, hold, or sell any security, or a solicitation to purchase or sell any securities. No securities shall be offered or sold in any jurisdiction where such activities would be contrary to applicable securities laws. Hunterbrook Media is not a registered investment adviser in the United States or any other jurisdiction. Nothing herein should be construed as investment advice or a recommendation of any kind. This information should not be relied upon as a substitute for independent research or professional financial, legal, or tax advice.

This website may feature forward-looking statements reflecting Hunterbrook Media’s current views. Such statements, identifiable by terms including but not limited to “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “should,” and “will,” are inherently speculative and subject to risks and uncertainties. Actual results or outcomes may substantially deviate from those projected. Hunterbrook Media expressly disclaims any obligation to update or revise any forward-looking statements, regardless of subsequent developments or new information.

The information presented is current as of the date indicated. No representation regarding the completeness or timeliness of this information is made. Some information is sourced from third parties and, while believed to be reliable, has not been independently verified, and its accuracy or completeness is not guaranteed. Hunterbrook Media is not affiliated with any sites linked to this website. Investment in securities and other financial instruments involves significant risk, including the potential loss of principal. Users are advised to conduct their own due diligence and consult professional advisors before engaging in any investment activity. Use of Hunterbrook Media’s content is entirely at the user’s risk. Users shall not use this site for any illegal or prohibited purposes and shall comply with all applicable local, state, national, and international laws and regulations.

Should any provision of these Terms of Use be adjudged invalid or unenforceable, the remaining provisions shall remain in full force and effect. Trademarks contained in links to third-party websites belong to their respective owners. Hunterbrook Media retains copyright on all text, content, graphics, and trademarks displayed on this site.

By Sam Koppelman

Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any positions related to this article at the time of publication. Positions may change at any time. Full disclosures on our website.

Earlier this year, Pablo Torre Finds Out won the Pulitzer Prize for its reporting on NBA superstar Kawhi Leonard’s secret, no-show endorsement deal with a tree-planting company called Aspiration, whose big investor just so happened to be the richest owner in American sports: Steve Ballmer.

The scandal: Ballmer, who signed Leonard to the L.A. Clippers after a competitive free agency process, apparently used Aspiration to circumvent the NBA’s salary-cap restrictions meant to limit how much billionaires can pay to win. Ballmer has denied the accusations amid an NBA investigation led by the law firm Wachtell, Lipton, Rosen & Katz.

Hunterbrook has worked with PTFO since we first launched: exposing how Phoenix Suns owner Mat Ishbia deceives American homebuyers (a very relevant story today!); tying Memphis Grizzlies owner Robert Pera to Russian “crimes against humanity”; and, somehow, gaining access to the contents of a group chat in which Phil Mickelson seemed to be sharing inside information on a California oil stock.

Today, we join Pablo Torre for the next chapter of the Kawhi Leonard story, revealing what sources describe as a hidden, multimillion-dollar “sponsorship” deal — this time, with a publicly-traded company: Daktronics (DAKT).

For over half a century, Daktronics has built scoreboards for sporting venues and public places. One of its biggest deals, announced in 2022: The Halo Board at the Clippers’ new Intuit Dome, owned and financed by Ballmer.

The Clippers account came at a pivotal time for Daktronics, whose auditor-board chair warned in 2023 that there was “substantial doubt” about the company’s ability to continue as a going concern. “In our 54-year history, we have not been faced with the perfect storm that these last two years represent,” the company’s then-CEO said in an earnings call.

Even the following year, when Daktronics was on stronger financial footing, it would have been a weird time to sign an endorsement deal, let alone one from which it’s unclear the company got anything in return. Hunterbrook has torn through the internet and has not found a shred of evidence that Leonard performed any work in exchange for his alleged agreement with Daktronics.

In the years since the Intuit Dome deal, Daktronics has seen its stock soar more than 500%.

As the kids say: Scoreboard.

Asked repeatedly for a comment explaining the alleged deal, Daktronics declined, after initially responding through a crisis communications firm, which confirmed the company had been contacted by Wachtell as part of its investigation, while also stating that Daktronics doesn’t have a contract with Leonard “right now.”

Again and again, we asked the firm whether it could provide evidence that Leonard performed services for Daktronics. We were met with silence. We’d love to better understand this story. There are more questions than answers. Daktronics has just declined to help us answer them.

Watch the full episode:

Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have any positions related to this article at the time of publication. Positions may change at any time. Full disclosures on our website.

By: Wendy Nardi, Nick Chrastil, Michelle Cera

Editor: Jim Impoco, Vikas Kumar

On October 21, 2025, at 9:44 a.m. local time, a single-engine Cirrus SR22 fell from the sky.

Heading to the Ruston, Louisiana, airport, the pilot radioed for another approach and said he was “hand-flying” the plane.

That was the last communication. The plane looped around the dense woods, banked left, hit a 60-foot tree, and crashed, gouging a trough in the ground and bursting into flames.

The plane was registered to Louisiana private prison company LaSalle Management, and flying it was Rodney Cooper, who helped run Texas corrections before becoming LaSalle’s executive director.

Local Sheriff Andy Brown later told reporters Cooper had been on his way to work. “Wasn’t much left of the plane,” Brown said.

For years, Cooper had been the public face of LaSalle. When lawmakers demanded answers about abuses in private prisons, Cooper was the one who showed up on Capitol Hill. His death brought the family pulling the strings out from the background. Steering the company all along was Billy McConnell, a quiet patriarch who co-founded LaSalle and, by his own account, “oversees all aspects of LaSalle’s operations.”

While Cooper took some public heat, McConnell and his family quietly expanded their privately held, multimillion-dollar correctional empire. Last September, ICE set up a high-profile detention wing nicknamed the Louisiana Lockup at the Louisiana State Penitentiary at Angola. LaSalle bagged the contract, a deal that cemented its position as a state favorite and a beneficiary of the Trump administration’s $113.5 billion ICE detention push.

Today, ICE money is turbocharging LaSalle’s operations. Using complex intergovernmental service agreements, LaSalle partners with small-town sheriffs and rural municipalities to run multijurisdictional prisons that operate with little oversight.

Sometimes LaSalle builds the prison from scratch; other times it just assumes operational control. It pockets profits — and often restricts access to the prison complex.

And people are dying in its custody.1

A monthslong Hunterbrook Media investigation reveals this secretive family has built a liability moat — a sprawling multimillion-dollar private prison enterprise hidden behind nearly 80 opaque LLCs that we could identify. Among our key findings:

• Opacity: Unlike publicly traded competitors CoreCivic ($CXW) and The GEO Group ($GEO), LaSalle is privately held and resists disclosing financial data. When families sue over allegedly preventable inmate deaths, LaSalle’s lawyers claim “LaSalle Corrections” is a mere “trade name,” trapping legal claims inside the local LLCs that actually own or run facilities and limiting claimants’ ability to hold the people in charge to account.

• Self-Dealing and Vertical Integration: The family often captures additional revenue by subcontracting services such as prison commissary, phone systems, and transport to their own side companies.

• Deep Political Entrenchment: Through campaign contributions and lobbying, the family has built an influence network from rural Louisiana all the way to Capitol Hill.

• Expanding into High-Risk ICE Operations: Despite a spate of oversight failures and recent detainee deaths, LaSalle is expanding its footprint, taking over specialized ICE facilities, including a controversial new staging site at England Airpark for families and unaccompanied children.

By trapping legal accountability inside individual LLCs while routing profits through a web of family-owned holding companies, LaSalle has constructed what amounts to a legal and physical blackout zone. “If you can just create some minor differences,” Peter Oh, a business law professor at the University of Pittsburgh School of Law, told Hunterbrook in an interview, “it’s enough basically to create this wall of limited liability that partitions all the assets and liabilities away.”

THE SHELL GAME

Erik Carlson, a 29-year-old pretrial detainee, was incarcerated at the LaSalle Correctional Center in Olla, Louisiana. After his death on January 25, 2025, his family filed a federal lawsuit alleging he died from complications of strep throat that prison staff failed to treat. The lawsuit names LaSalle Corrections, LaSalle Management Company, and the LaSalle Correctional Center among the defendants, calling them “LaSalle.”

LaSalle lawyers fought back. In a brief filed in April, they sought to have the case dismissed because specific facts had not been alleged against each LLC separately. Their claim? That the plaintiffs’ legal team “impermissibly group three separate defendants together and make collective allegations against that group.” It’s a familiar move for LaSalle attorneys.

LaSalle Corrections holds itself out to the public as a family-operated private prison company headquartered in Louisiana. According to its website, LaSalle “and its affiliates” manage 18 corrections facilities in several states that can house over 13,000 people. News outlets refer to it as a company, and its employees say they work for one.

But when LaSalle is sued, say, for an allegedly preventable death at one of its facilities, its lawyers fight the notion that the organization is an integrated whole. They claim that “LaSalle Corrections” is just a trade name “widely used to refer to various LaSalle-branded entities,” a loose set of independent LLCs with seemingly with no centralized oversight or parent entity that can be held responsible.

The defense is built into LaSalle’s corporate architecture. When LaSalle gets a contract to manage a new facility, it often creates a whole new LLC. For instance, when ICE tapped LaSalle to operate the immigration detention facility within the Louisiana State Penitentiary at Angola, LaSalle officials created a brand-new company called the ICE 47 Processing Center LLC to hold the contract.

By structuring LaSalle as a loose group of LLCs, the company’s owners obtain liability protection similar to that of a corporation. The arrangement brings other benefits, too: LLCs use pass-through taxation, meaning income flows to owners’ personal returns instead of being taxed at the LLC level first. “I think the tax advantages for them are probably significant,” Oh told Hunterbrook.

And because state laws grant owners wide latitude in drafting LLC operating agreements, those documents can be written however the owners prefer.

“You can shape it however you want,” Oh said. “You could actually create an LLC and say there are no fiduciary duties whatsoever.”

Of course, many organizations use LLCs to limit liability; as the term “limited liability company” suggests, that’s one of the primary reasons this type of entity exists. But LaSalle is not just any organization: Its core business is incarceration. Based on Hunterbrook’s review of a decade of litigation, LaSalle has regularly used its opaque operating structure to avoid liability and prevent plaintiffs from getting insight into the broader organization. The upshot: Plaintiffs don’t know whom to sue, and the opacity complicates discovery into the company’s structure and finances. Theoretically at least, the LLC structure could even let LaSalle strip assets from individual entities, blocking any meaningful financial recovery or accountability.

At first, LaSalle might seek to have a case dismissed, alleging the plaintiff named the wrong entity. The company also resists discovery that would give plaintiffs insight into its inner workings. Those are temporary hurdles plaintiffs have to overcome. But even when a plaintiff sues the right party, we found, LaSalle has tried to confine liability to the entity that operates the facility.

Dustin Rowland sued after being denied medical care for a hernia while in custody at the LaSalle-run Fannin County Detention Center in Texas. LaSalle tried to get the lawsuit dismissed because Rowland had failed to name another LLC, LaSalle Corrections West, that held the contract to operate the jail.

In response to the motion to dismiss, Rowland’s lawyer wrote, “it is obvious that LaSalle Corrections proudly claims to be one enterprise,”2 noting that nowhere in the company’s marketing is there a disclaimer that it is “actually a conglomeration of independent corporations.”

The family of Jaleen Anderson, who died in 2024 after being held at LaSalle Correctional Center in Olla, Louisiana, hit the same wall. In a motion to compel discovery3 regarding LaSalle’s corporate structure, the lawyers wrote, “LaSalle has repeatedly evaded this discovery.”

“They don’t say exactly what each corporation does in a very complex system … all operating out of this Ruston headquarters,” a lawyer for Anderson’s family said, as news outlet The Advocate reported on June 23. “Can these folks just sit here and just say, ‘You know, this man died, but you didn’t exactly name the right corporate entity, and therefore you’re out of luck?’”

The Anderson legal team has admitted that including LaSalle Corrections LLC, the trade name, as a defendant was a mistake. “The difficulty is that Plaintiffs do not yet know the identity of the entity or entities that should be named,” they said. “That is not for lack of trying.”

Plaintiffs who clear the procedural hurdles face a potentially bigger problem. LaSalle executives have testified that a separate entity, LaSalle Management, handles what they call “back office” duties for the various LLCs. These duties include payroll, human resources support, accounting, and legal services. They also include “plans for future operations” and “trying to collect bills,” McConnell testified last October. Theoretically, the company could move money into a specific LLC only as needed for a particular expense.

“We’re just going to keep moving all the different assets around,” Oh hypothesized, speaking generally about an organization with a complex LLC structure, not specifically about LaSalle. “Even if you do end up actually catching us, what’s going to happen is that we’re just going to tell you that’s fine. That’s the judgment, but the money isn’t there.” Oh described such hypothetical circumstances as “a red flag which says, ‘look this company was set up right only for the purposes of being a shell.’”

Louisiana secretary of state registrations belie the notion that all of these LLCs tied to the family are unrelated entities. The prison business LaSalle Corrections, for example, lists WMC Enterprises as a member, and WMC lists McConnell Southeast Holdings as a member. LaSalle Corrections and WMC Enterprises both identify William K. McConnell as the registered agent, with an address of 192 Bastille Lane, Ruston, Louisiana.

McConnell Southeast Holdings is also a member of the prison-services firms Correct Solutions and Correct Commissary, as well as low-income housing developer M&T Development. Similarly named McConnell Southeast Corrections is a member of prison LLCs LaSalle runs for ICE: Winn Correctional Center LLC, River Correctional Center LLC, Jackson Correctional Center LLC, and Richwood Correctional Center LLC. It’s also a member of LaSalle Management. But McConnell Southeast Corrections itself leads back to a single manager and registered agent, William K. McConnell, at the same 192 Bastille Lane address.

Despite the complex structure, documents obtained by Hunterbrook through public records requests appear to indicate that decisions come down from the top and that problems at the sites are reported upward.

For all the legal posturing, in other words, LaSalle is run by the family.4

“They are closely held and it is top-down. I don’t care what kind of image they try to project. They’re very tightly controlled,” Tom Aswell, whose public interest blog Louisiana Voice has covered LaSalle Corrections, opined to Hunterbrook.

The tells aren’t hard to find. The contract McConnell signed for the ICE 47 Processing Center LLC last August, for example, uses the 192 Bastille Lane address and contact email “billy@lasallecorrections.com.”

Similarly, a contract between the Jackson Parish sheriff’s office and “Jackson Correctional Center LLC” not only lists the 192 Bastille Lane address but also states that the LLC “agrees to arrange for housing for Jackson Parish pre-trial inmates at the LaSalle Correctional Center or any other facility managed by LaSalle Management Company, L.L.C.”

Another example: In a 2023 proposal to run the Jefferson County Downtown Jail in Texas, Billy McConnell described the company’s legal structure, saying LaSalle Corrections operated “under the following names: LaSalle Management Company, L.L.C., Southwestern Correctional, LLC, and LaSalle Southeast LLC with dba LaSalle Corrections.” The “Executive Summary” says LaSalle Corrections is “owned by William K. McConnell, Patrick H. Temple and their family members.”

“William (Billy) K. McConnell is Managing Partner of LaSalle Corrections and as such is the person responsible for making decisions as to matters relating to the referenced solicitation,” the proposal states.5

The contract to run the jail was awarded to LaSalle Corrections VI dba LaSalle Corrections.

Earlier, a Correct Solutions job bid stated that McConnell “oversees all aspects of LaSalle’s operations.”

Lately, the company’s legal armor has begun to show cracks. Last fall, a jury rejected LaSalle’s portrayal of itself as a collection of disparate entities and returned what lawyers for the plaintiffs called the largest award against a private prison company. Erie Moore, Sr., died after injuries received at the Richwood Correctional Center, run by the family’s Richwood Correctional Center LLC,6 and Moore’s family sued. The prison was a jail then but has since become an ICE detention facility. The jury awarded Moore’s family more than $40 million in damages and found that the companies were “a single integrated enterprise.”

“I have to feel like it’s a real stunning knockout punch to them,” Oh told Hunterbrook. “We know that you’re at the center of it and all of these different companies are all the same.”

After the jury returned its verdict in the Moore case, LaSalle tried to have it thrown out, claiming the evidence presented was “superficial.” In May, the judge reduced the award. Both sides have filed notices of appeal to the Fifth Circuit.

“A court has basically taken the step to say you can form as many LLCs as you want, but we’ve seen through what you are doing,” Oh told Hunterbrook.. As a result, “whatever liabilities are incurred by one LLC is going to apply to you,” he said. It’s possible “their house of cards is about to collapse.”

BUILDING THE BLACKOUT ZONE

In October 2025, Nora Ahmed, legal director of the ACLU of Louisiana, drove to LaSalle’s Jackson Parish Correctional Center with a court order to free a detainee, she told Hunterbrook in an interview. The prison was hours from her office, and she arrived late in the day. Instead of honoring the order, LaSalle staff kicked her off the property, she said. The ACLU of Louisiana posted a video about the incident to its Instagram page.

ICE didn’t clear it up until the next day, Ahmed told Hunterbrook. She said delays in processing releases are common. “If you come to Louisiana,” she said, “you come here to disappear.”

Geographic isolation forms the outer wall of the company’s accountability moat.

Four dedicated ICE prisons LaSalle runs — theWinn Correctional Center, Richwood Correctional Center, River Correctional Center, and Jackson Parish Correctional Center — sit in northern and central Louisiana, far from major cities. Camp 57 at Angola, nicknamed the Louisiana Lockup, is to the southeast, in a building at the notorious Louisiana State Penitentiary at Angola. Based on the July 9 average daily population totals at Trac Reports, Louisiana held about 7,680 ICE detainees, and LaSalle-run sites accounted for roughly 56% of that total, more than any other private prison company.

Inside the moat, conditions can be miserable.

Carla Hall, a nurse who worked at the Jackson Parish Correctional Center, told Hunterbrook in an interview that the prison had been crowded. “They were getting paid by the head,” Hall said. Sometimes “the facility officer had to come to help go through the intake process because it was so many coming in at one time.” Hall sued LaSalle for employment discrimination in 2021. Her case was dismissed with prejudice.

In 2020, the Government Accountability Project, a nonprofit that defends whistleblowers, wrote to Congress condemning the “ongoing gross mismanagement, dangerous practices, and compliance failures” at facilities like Richwood. Cooper was called before Congress to respond. “These deaths and illnesses were likely caused by LaSalle mismanagement,” read the GAP letter, which was entered into the Congressional record. It alleged that LaSalle failed to follow COVID-19 protocols or report or acknowledge deaths.7

Sources Hunterbrook spoke with emphasized that company leadership should be distinguished from the rank-and-file LaSalle employees, for whom the job could be an economic lifeline. “I think there are some people who don’t like the system, but then they choose that they’re going to be kind to people,” said Ahmed, who has visited LaSalle’s ICE prisons in Louisiana. “And then they know that there are other people who work there who are unkind to people.”

A former employee told Hunterbrook, on condition of anonymity, that when they worked at a LaSalle prison in 2021, they’d been properly trained. They worked nights as a certified nursing assistant and then a correctional officer. They described work culture as “one of the weaker points.”

Hall said of her time at Jackson Parish Correctional Center, “You had some good guards there and some good nurses.”

ICE has met with LaSalle repeatedly to discuss issues with its various operations — five times we found in 2024 alone. Those meetings do not appear to have led to meaningful changes in LaSalle’s operations.8

NBC News reported in July 2025 that detainees were going hungry at Winn Correctional Center, among other sites. In October 2025, USA Today reported that LaSalle served ICE detainees at Richwood food that was rancid or insufficient.

Then in June 2026, the Department of Homeland Security Office of Inspector General issued a damning report after a surprise inspection. Fridges at Winn were warm inside; water pooled on the floor; legal resources weren’t always clearly accessible; recordings of incidents had crucial gaps; and staff used “prohibited techniques,” including in one instance in which an officer stabbed a detainee in the thumb with a pen while trying to get them back into their cell. Two days after the report, Mamuka Artmeladze died at Winn, the “second detainee death in less than 2 months,” the AP reported, following the death in April of Alejandro Cabrera Clemente.

“This cannot be who we are,” U.S. Rep. Mark DeSaulnier said in a Facebook post after an ICE detainee lost her baby, possibly from a lack of prenatal care at Richwood.

It appears that LaSalle’s board of directors won’t be taking up any of these urgent matters. That’s because we weren’t able to find evidence of a board at all.

In a 2024 deposition, the late Executive Director Rodney Cooper was asked, “Do you report to a board of directors?” He said no and went on, “I’m not aware of a board of directors.”

Earlier that year, though, when deposed for a different lawsuit, he said he reported to “the board of people, I guess, that have LaSalle Corrections.” When asked who was on the board, he said he didn’t know. But he guessed Billy McConnell was on it.9

What does McConnell make of all the criticism? “What somebody else thinks about Billy McConnell compared with what God thinks of Billy McConnell is almost irrelevant,” McConnell told USA Today in 2019.

It seems possible McConnell answers to no one — at least, no one on earth.10

MEET THE MCCONNELLS

“Managing a detention center requires a dynamic mix of special skills and experience.” — LaSalle Corrections contract proposal

‍ “I’m not running a nonprofit.” — Clay McConnell, 2012, The Times-Picayune

Billy McConnell stood at the microphone on May 23, 2026, as keynote speaker for commencement at his alma mater, Louisiana Tech University. He wore a suit and tie with a golden cross hanging from his neck. He told the story of how his grandfather, a third-grader, also named Billy, was mocked for going to school barefoot. “He left that classroom that day embarrassed and humiliated and never returned,” McConnell told the graduating students. “He lived the rest of his life without a formal education.”

“And yet,” McConnell went on, “as I sat in his lap, he would tell me he was a millionaire” because he valued his family. McConnell also paid tribute to the late Rodney Cooper, describing him as “a great man.”

Billy McConnell remains the family patriarch. He founded and still appears to be involved in running the family business, which united his family with that of his late co-founder and brother-in-law, Patrick H. Temple. The family business headquarters appears to be 192 Bastille Lane in Ruston, Louisiana, with additional offices next door at 182 Bastille Lane. Correct Solutions is there, along with KPL LLC. The LaSalle empire of businesses also use addresses at 1910 and 1936 Farmerville Highway in Ruston, and more out of state. In 2024, LaSalle Regional Warden James McCormick said the corporate office was “the office for all of LaSalle’s operations combined.” LaSalle Management owns the property at 192 Bastille Lane, according to the Lincoln Parish Assessor’s Office.11

McConnell, now in his late 70s, grew up in rural Rayville, a northern Louisiana town of about 3,000 people. He attended Louisiana Tech, in Ruston, where he studied engineering, and where his college yearbooks show an undergrad with wavy hair and glasses. He joined a fraternity, Sigma Nu’s Eta Zeta chapter, as well as academic honor societies and the Wesley Foundation, a student organization that was affiliated with the United Methodist Church.

He went to work for Exxon and trained as a lawyer, then changed course to run his father’s construction business. From there, the family made the leap into prisons. McConnell co-founded LaSalle Corrections in 1997. “We realized that prisons are like nursing homes,” his son, Clay McConnell, told The Times-Picayune in 2012. “You need occupancy to be high. You have to treat people fairly and run a good ship, but run it like a business, watch food costs, employee costs.”

At first, the business apparently had a selling point: It showed a commitment to substance abuse treatment and re-entry programming, Robert Hanser, an associate professor at the University of Louisiana at Monroe, told Hunterbrook in an interview. Hanser worked with LaSalle’s Blue Walters substance abuse and re-entry program at Richwood Correctional Center around that time and became LaSalle’s director of offender programming. “They were really proud of that program,” Hanser said. “Sometimes I could go to them and say look I really want to do this, that, or the other, and this is where I think it’ll really help out,” he said. “They have no pecuniary interest whatsoever and they just go ahead and say, we can float that.”

LaSalle established relationships with local law enforcement. Johnny Creed, chief of operations for LaSalle Management, said in a 2018 deposition that he drove all over Louisiana talking to sheriffs who might need extra jail space and help “filling beds.” “The visit might be started off with a phone call,” Creed recalled. “I heard, you know, that a certain parish had incarcerated persons, something or other. I’d get up in the morning, you know, and take off.”

But eventually, LaSalle came to another fork in the road. ICE was paying rates several times what Louisiana paid to house prisoners. In 2019, LaSalle converted four major Louisiana prisons it ran into ICE detention centers: Winn, River, Jackson Parish, Richwood.

It also moved into prison-related services that are moneymakers in their own right. Correct Solutions Group offers payment services, phone services, tablets and kiosks, and commissary, as well as an “offender management system” and GPS tracking, according to the website.12 LaSalle Corrections offers transportation services, including with armed guards; commissary; construction; and administrative services.

LaSalle was becoming vertically integrated, capturing additional revenue flowing into the private prisons it ran through other companies the family owned.

A LinkedIn profile for Clay McConnell identifies him as “Managing Director at LaSalle Management.” He appears online as a religious speaker13 and also posts about hunting ducks. His name appears on company registrations for very few of the family LLCs.

But another name has been appearing on active registrations: Wesley McConnell, Clay’s brother. Wesley is a licensed CPA and real estate agent, and a principal partner of Whitetail Properties Real Estate, which sells hunting land. His LinkedIn profile reads “Co-Owner at LaSalle Corrections.” Wesley McConnell is listed as a SAM.gov contact for LaSalle Corrections V (which received a major DHS contract in May 2025), as well as LaSalle Corrections VI and McConnell Southeast Holdings. He is also president of the LaSalle Family Foundation, the contractor for a new ICE site at the England Airpark in Alexandria, LA.

He is also listed as a director of the private Guaranty Bank & Trust Co. of Delhi, Louisiana, according to the Louisiana Office of Financial Institutions. The bank’s annual report, signed March 7, 2025, shows the family owns about 11% of the bank’s shares. And the bank appears to hold accounts for some of their prison-related LLCs: It has come up in court as a bank used by Correct Solutions and possibly by LaSalle Management.14

MONEY MATTERS

LaSalle’s ICE contracts often result from intergovernmental service agreements, or IGSAs, that ICE sets up with state or local government agencies. IGSAs are a mainstay of ICE’s work with private prison contractors, according to the Government Accountability Office.

The agreement is a three-way deal: ICE signs an IGSA with a local government agency, and that agency signs a separate contract with the prison company.

And the local partners get paid. Under a contract obtained through a public records request, for example, LaSalle’s Jackson Correctional Center LLC (“JCC” in legal documents) agreed to pay the sheriff’s office a sponsor fee of $13,333.33 a month, or $160,000 a year, plus a per diem of $1.59 for each detainee. At 1,037 detainees in July, according to a detentionreports.com estimate, that would be about $600,000 a year more, bringing the total to almost $800,000 for the year. In an area with a limited tax base, such sponsorship fees can provide a significant part of the law enforcement budget.

That’s not the only way the family enterprise sends money flowing.

A handwritten note across the top of a lobbying disclosure form in a 2023 job bid stated, “LaSalle does not have any lobbying activity.” The page was signed by LaSalle Corrections Chief Financial Officer Tim Kurpiewski. The LLC web makes Kurpiewski’s denial possible: No entity named “LaSalle Corrections” needs to appear on a disclosure.

And yet Hunterbrook found extensive records of family entities lobbying in multiple states. LaSalle Corrections lobbied under its own name in Louisiana in 2014, and in Alaska in 2019 and 2020, according to state disclosures reviewed by Hunterbrook. LaSalle Corrections Management has lobbied in Arkansas.

Prison-related entity Correct Solutions has paid for dinner parties for sheriffs and their employees at the Arkansas Sheriffs’ Association Winter Conference — $21,809.39 in 2025 and $10,959.84 in 2026, according to ethics disclosures with the Arkansas secretary of state. Correct Solutions is listed as a client on the Gilmore website and has lobbied in Colorado, in Louisiana, and at the federal level, through Monument Advocacy.

Besides paying lobbyists, the McConnell family and its businesses keep money flowing through campaign contributions at the national, state, and local levels, Hunterbrook found. They give heavily, year after year, to candidates up and down the ballot: local sheriffs, governors, state senators and representatives, judges, district attorneys, the U.S. president, PACs, and other organizations.15

LaSalle Management, Correct Solutions, and the Jackson Parish Correctional Center, LaSalle Correctional Center, Richwood Correctional Center, and Winn Correctional Center have donated to the campaign of Louisiana Gov. Jeff Landry: almost $45,000 from 2021 to 2025, based on Hunterbrook’s investigation. Five different LLCs each contributed $5,000 to the campaign on the same day, May 24, 2023.

In June 2025, Landry appointed Billy McConnell to the Louisiana Commission on Law Enforcement and Administration of Criminal Justice as a “Person having Vital Concern w/ LCLE.” McConnell had apparently been part of Landry’s transition team, too, according to James LeBlanc, former secretary of the state Department of Public Safety and Corrections, who in a 2024 deposition said he’d met with McConnell in that capacity.

Meanwhile, contributions by family prison-related businesses have flowed to sheriffs, elected officials LaSalle does business with. In a typical scenario, the sheriff signs an IGSA with ICE and then has discretion over which prison company will operate the site.

Multiple Louisiana sheriffs have received contributions from McConnell LLCs, according to the Louisiana campaign finance portal. On September 4, 2023, River Correctional Center donated $2,500 to a local sheriff’s campaign. The very next day, so did LaSalle Management.

The money reaches all the way to the federal level. In Federal Election Commission records, family members who listed LaSalle entities as their employer gave generously to politicians and political groups.

Contributions also went to the war chest of U.S. Congressman Clay Higgins, a Republican from Louisiana who received tens of thousands of dollars from the McConnells between 2020 and 2025 through “Captain Higgins for Congress,” the “Higgins Victory Committee,” and his affiliated Redemption PAC. Toward the end of that time, LaSalle was slated for expansion at the Airpark.

THE AIRPARK

“If we want AEX to be known as Auschwitz International Airport, just keep going.” Angela Hayes, a local resident, stood at the microphone and said she “hadn’t planned on speaking” but felt that a private company profiting from the new family and children’s deportation staging facility ICE plans at the Airpark would be “morally reprehensible.” The moment was captured on a video posted to the website of the England Airpark board, officially named the England Economic and Industrial Development District, or EEIDD, on March 26.

“It’s morally repugnant,” said Dr. David Holcombe, medical director of the Community Healthworx, at the meeting. “I do immigration exams for legal citizens and some that are prisoners,” he said. “They are in terrible shape. They’re in total distress. They’ve been picked up all over the United States and dumped here.”

ICE is calling the new site a “staging area,” and the LaSalle Family Foundation of Ruston, Louisiana, is the contractor, the AP reported July 6. Airpark officials say it’s for self-deporting families and unaccompanied children.

Local residents and human rights activists have been protesting the new facility. On July 31, the National Immigration Project and other organizations published an open letter to the EEIDD board of commissioners, asking them to cancel contracts for the site. “This Is a Detention Center Operating as a Punitive Carceral Facility—Not a Residential Humanitarian Center,” the letter read. It went on, “The proposed facility is slated to be operated by the LaSalle Family Foundation, an organization with direct ties to LaSalle Corrections, a private prison company repeatedly criticized for allegations of abuse, retaliation, and neglect.”

That same day, Airpark officials published an open letter in local news outlet The Town Talk responding to recent reporting about the Airpark, including the new ICE site. “Facilities associated with Immigration and Customs Enforcement are operated by independent entities under federal oversight, not by the EEIDD,” the letter reads. “Likewise, the proposed self-deporting migrant family processing center would be operated by an independent tenant. According to information provided by the prospective operator, the facility is intended to function as a short-term processing center, not a prison, as some have incorrectly claimed.”

ICE already runs what has been reported as its main U.S. deportation hub at the Airpark. The site falls under the oversight of the ICE New Orleans field office.

“You can hear it everywhere. You can hear these big planes peeling out, right?” Holcombe told Hunterbrook in an interview. “Everybody in the community knows it’s happening.”

Activists have denounced the site’s lack of transparency for years. In a 2023 FOIA request to ICE, Robert F. Kennedy Human Rights and the ACLU of Louisiana, along with the New York Civil Liberties Union, said the site was being called a “black box” and demanded a count of how many people were inside the building. “ICE frequently holds detainees at Alexandria for extended periods,” the request read, “without adequate medical care, disability accommodations, and language access services.”16 That year, a Prison Rape Elimination Act auditor found the Alexandria staging facility failed to comply with 13 standards that required corrective action. ^‍

The next year, LaSalle signed the lease for a building right on the tarmac. It’s a nondescript structure at 1113 Billy Mitchell Blvd., based on the Airpark website. The company helps out at the GEO site, Airpark Deputy Director David Broussard told the board last April.

The lease said LaSalle planned to add “a new portico on the tarmac side of the Leased Premises.”

Documents the Airpark provided in response to a public records request suggest LaSalle had permission to temporarily hold people inside the building it rents, including for booking and intake, or “processing.” There are indications in the contract that it could be used to house and ultimately deport immigrants. First, section 3.1 details the use of the leased premises and states that the premises should be used as a “temporary holding” facility “providing immigration transport services to the U.S. Government.”

Second, the Airpark is required to provide LaSalle with access to the premises 24/7/365 for LaSalle’s “employees, agents, invitees,” and importantly, “individuals in Lessee’s custody.”

Finally, LaSalle planned to renovate the facility to add “security features, including a security gate and sally port area.” A sally port is a “security vestibule” often used for prisons and jails to control access. It sets up a series of secure doors, only one of which opens at a time.

An informational slide with the ICE logo at the top, also provided by the England Airpark, reads: “LaSalle Corrections Transport: $5 Million Dollar investment in building renovations for a processing facility at England Airpark.” It’s unclear what “processing” may involve. But the company said it will have 75 employees at the “England Airpark facility,” open every day of the year.

‍The LaSalle Corrections name and logo are already on the Airpark’s “tenants” page.

The Airpark is run by the England Economic and Industrial Development District, built on the site of a former military base that is now its own political entity. Amid controversy over a proposed data center at the Airpark, and public protests about ICE, the board approved LaSalle’s deal for the new site earlier this spring. The parcels involved are a barracks at 1603 Frank Luke Blvd. and an office building at 1406 Van Gossen Drive, on either side of the main road leading into the airport, according to Google Maps, plus about 10 acres of property, according to the video posted of the February board meeting.

LaSalle Corrections will run the new facility, the AP reported July 6,17 while the LaSalle Family Foundation of Ruston, Louisiana, has a cooperative endeavor agreement with the Airpark for the site, the Airpark confirmed. The nonprofit foundation said on its 2024 IRS Form 990-PF that it sends chaplains into LaSalle prisons. Its officers and directors include Billy McConnell, Clay McConnell, and Wesley McConnell, who also serves as president and receives grant applications at his LaSalle Corrections email address.

“The LaSalle group has a very sinister reputation,” Holcombe told Hunterbrook in an interview.

On a recent visit, the Airpark resembled a suburban housing development, with well-maintained lawns, clean streets, and a golf course. Decorative statues of Air Force fighter jets stood in the grassy medians. But down a few side streets near the Alexandria International Airport was a fenced-off area of tarmac with trucks, buses, and groups of people being loaded onto planes. Signs warned: “No Stopping. No Standing. No Parking.”

Sen. Ron Wyden, who is on the Senate Finance Committee, complained about the opacity surrounding the new LaSalle site in a June 3 letter to the Administration for Children & Families. “A federal facility designed to hold children and families in federal custody cannot be stood up in secrecy,” he wrote, noting the absence of public announcements or licensing steps. “Whatever ACF is preparing to do at Alexandria, the Finance Committee, the public, and the children themselves have a right to know about it.”

“It’s a prison,” Frances Kelley, who works with Louisiana Advocates for Immigrants in Detention, a volunteer organization that assists immigrants in detention and their families, told Hunterbrook in an interview.

“The people that are going to be in the detention center at the airport are going to be already in ICE custody and they’re going to be choosing to be there versus fighting their case in immigration court,” Kelley said. “And if they were fighting their case in immigration court, they would be detained the entire time. So that’s the real choice that they’re making.”

“They’re not going to let people walk out of that building,” Kelley said. “ICE does not let people go, especially now. They don’t let people go.”

Based on videos posted to the England Airpark website, Executive Director Ralph Hennessy and others had been meeting with federal officials since at least 2024 to discuss expanding the roles of ICE and LaSalle at the Airpark. In an email to Hunterbrook, Hennessy explained that the Airpark has “not led any efforts to expand ICE or LaSalle’s presence here. We have merely responded to their requests to expand their operations at the airpark.”

In a May 20, 2024, email Hunterbrook obtained through a public records request, Broussard told Hennessy, “Ralph, Attached is the piece we brought and left with Cong. Higgins staffer,” with the 2024 GEO-LaSalle document attached. Outlining points about the site, he said, “GEO handles housing and ground transportation not flights,” and “LaSalle also only houses and transports. Operates in multiple states.” He emphasized, “No children or women housed at GEO or LaSalle facilities at England. Women transported same day from other facilities and moved directly to planes. No children are processed or detained at anytime.”

He assured Hennessy that detainees were only convicted felons who had already been adjudicated and “come in from all parts of the country” for a 72-hour stay at most. “ASF has no barbed or razor wire,” he wrote, referring to the Alexandria Staging Facility. “Facility blends with activities on ramp.”

On a May 23, 2024, video, Hennessy told the board his team had met with Higgins’ staff in Washington, D.C. “regarding the ICE facility and The GEO Group and LaSalle and what we have here, because he sits on Homeland Security. And it’s something that we felt like he should be interested in … even though we’re not in his district.”

Higgins recommended meeting with Homeland Security Committee staff, Hennessy said. “We walked into a room with eight to 10 people, with everyone from the Coast Guard to Border Patrol and Customs and a number of other entities within Homeland Security,” Hennessy told the board, as he confirmed in an email to Hunterbrook. “They were very intrigued. Uh, they liked hearing what we had to say. They asked a lot of questions.”

By January 30, 2025, Hennessy reported that he’d been advised, “There’s a possibility that the operations here could double.”

Hennessy told the board, “We met with Congressman Higgins and his staff while we were in D.C. last week and and Congressman Higgins would love to flow everything through AEX. Why Congressman Higgins? Because he’s on Homeland Security and that’s that’s what oversees that. He was pretty blunt and said, ‘Look, I if I get my way, you all are going to get sick and tired of everything coming to Alexandria and you’re going to call and beg me to turn it off.’”18 In an email to Hunterbrook, Hennessy said that this was “something he mentioned to me at a social event,” and pointed out that Higgins is “no longer on Homeland Security.”

Given the competition between companies for ICE money, Hennessy said, they’d consulted with Higgins so he could “make sure that flows here instead of some of these other states.” He told the board, “LaSalle has their own prison network that they [store] prisoners there. They move them here by bus, put them on the airplanes with the GEO prison.” In an email to Hunterbrook, Hennessy said that he had “crossed paths with” Higgins at a social event but had meetings only with his staff.

At an April 24, 2025, meeting, based on the video, Airpark Deputy Director David Broussard told the board, “LaSalle Corrections, which is out here at the Airpark and of course supports the GEO ICE cluster that’s happening here,” had submitted a proposal for a major new project to the DHS that could involve multiple buildings. “We’re kind of in the wait and see mode,” he said. Meeting minutes confirmed LaSalle was looking to expand.

Broussard reiterated on November 20, 2025, “I’ve been working on a pretty, uh, good expansion project for LaSalle Corrections who currently leases a building on the flight line.” By January 22, the Airpark and LaSalle were apparently “putting together a proposal packet to go to ICE for their approval,” Hennessy said.

At a February 26, 2026, board meeting, Hennessy confirmed LaSalle’s presence at the staging area, explaining the new family site’s deportation planes would be “the flights that, that are already, um, being utilized by the GEO Group and LaSalle for, for the other deportations.”

Discussions of the new family site continued this spring.

We reached out to LaSalle executives for comment about the findings in our article. Senior Corporate Counsel Leah Sumrall wrote back, “We appreciate your interest in our organization and the work we do. Please be advised that a significant amount of the information you plan to report is inaccurate.” LaSalle did not respond to multiple follow-up inquiries about any specific inaccuracies in Hunterbrook’s reporting.

We also contacted The GEO Group, Congressman Higgins, Gov. Landry, and ICE. None provided substantive responses as of press time.

Meanwhile, in another sign of its closer ties with ICE, LaSalle has been hiring contract process officers to work directly with ICE at field offices and detention centers in various states. The job involves helping with “removal planning,” as well as travel, transportation, and repatriation planning.

And last year, LaSalle Corrections V won a contract directly with ICE. It’s an open-ended vehicle that allows payments up to $125 million to the company for “detention and related services for aliens in immigration and customs enforcement custody,” both “within and outside of the contiguous United States.” So far, based on government records at SAM.gov and USASpending, it’s unclear whether the money has been allocated.

“So, you’re put in immigration detention,” Ahmed told Hunterbrook. “Your commissary is so much more expensive. You’re only allowed to go outside once a day for an hour, but that can be suspended at any point in time for any reason. You’re now stuck in a room between 50 and 70 people with, six to seven open showers where people are defecating and you can smell that in the room. You are freezing cold, like, the lights are on. It is just an environment that assists people in really losing their ability to live.”

“People can handle it for about three and a half months and then they can’t do it anymore,” Ahmed said. “They’ll take voluntary departure.”

Day after day, week after week, the planes taxi — and take off.

Author

Wendy Nardi joined Hunterbrook after working as a developmental and copy editor for academic publishers, government agencies, Fortune 500 companies, and international scholars. She has been a researcher and writer for documentary series and a regular contributor to The Boston Globe. Her other publications range from magazine features to fiction in literary journals. She has an M.A. in Philosophy from Columbia University and a B.A. in English from the University of Virginia.

Nick Chrastil is a reporter in New Orleans. He previously covered criminal justice for The Lens.

Michelle Cera trained as a sociologist specializing in digital ethnography and pedagogy. She completed her PhD in Sociology at New York University, building on her Bachelor of Arts degree with Highest Honors from the University of California, Berkeley. She has also served as a Workshop Coordinator at NYU’s Anthropology and Sociology Departments, fostering interdisciplinary collaboration and innovative research methodologies.

Editor

Jim Impoco is the award-winning former editor-in-chief of Newsweek who returned the publication to print in 2014. Before that, he was executive editor at Thomson Reuters Digital, Sunday Business Editor at The New York Times, and Assistant Managing Editor at Fortune. Jim, who started his journalism career as a Tokyo-based reporter for The Associated Press and U.S. News & World Report, has a Master’s in Chinese and Japanese History from the University of California at Berkeley.

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

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By: Dhruv Patel

Editor: Vikas Kumar

• Hunterbrook compiled a record of Bloom's fuel cell performance from public data spanning 15 years: government datasets across the U.S. (New York, Delaware, California) and South Korea, as well as self-reported federal filings covering 126 plants in nine U.S. states.

• Across the datasets, the fuel cells’ measured efficiency appears to fall below Bloom’s disclosed benchmarks before the five-year replacement interval the company claims. In New York, Hunterbrook calculated that all 37 systems fell below Bloom’s efficiency benchmark at a median of 20 months, with only one declining slowly enough to be on pace to stay above it for five years. In California, 105 of the 231 projects with usable fuel data recorded at least one month below the level at which a 2025 contract requires Bloom to repair or replace the system. And even on cumulative lifetime efficiency, the measure Bloom most typically uses, 44 of the 126 plants in the federal record fall below the guarantee line.

• Bloom’s 95% output benchmark — a measure of how much electricity the cells actually produce against their rated capacity — was missed almost everywhere, almost always: 152 of 156 months in Delaware, 97.4% of months in California, and 22 of the last 24 months at one of Bloom’s largest continuously metered Korean plants.

• The public data is reported daily or monthly, so Hunterbrook uses those intervals to track the timing and persistence of underperformance — not to determine any potential contractual breach, which may be assessed monthly, annually, or cumulatively depending on the contract.

• A part-owner of a Bloom project in New York told Hunterbrook the company paid their group a multimillion-dollar contractual penalty after failing to meet one of its guarantees.

• Some customers report adequate performance: One said Bloom “remains in compliance with our contract,” and a California operator called their project “fairly reliable,” but won’t buy more, citing price. Other customers said they no longer work with Bloom.

• Hunterbrook’s findings directly implicate Bloom’s data center ambitions. Based on these numbers, fuel cells may be a less attractive alternative to grid power and gas turbines than they appear on paper: Given the consistently low efficiency and output numbers across Bloom’s projects, data center operators would likely have to use more gas and install more fuel cells (and replace them more frequently) than typically modeled to reach the desired capacity. It’s, perhaps, one explanation for why Bloom has only named several partners.

• Bloom did not reply to Hunterbrook’s repeated requests for comment for this article. After Hunterbrook published its prior investigation, Bloom filed an 8-K form with the SEC as a rebuttal, claiming it “categorically rejects the Report’s claims regarding the Company’s financial results and accounting.”

It’s always been a good story: a box that turns gas into electricity through a chemical reaction, with no combustion required.

Since the early 2000s, that has been Bloom Energy’s ($BE) promise — and it’s one fit for the AI era as data center developers scramble to improve what they call “time to power.”

Earlier this year, Bloom briefly reached a market cap of about $100 billion, with the stock up roughly 1,000% over the preceding 12 months. This came as Bloom announced splashy deals with partners like Oracle, which agreed to purchase up to 2.45 gigawatts of fuel cells for its flagship site in New Mexico.

This month, Hunterbrook reported cracks in Bloom’s story, including the company’s sourcing of a key rare earth ingredient, scandium, from China, a practice the company has repeatedly and publicly denied. Hunterbrook also detailed delays across Bloom’s biggest planned projects, at least one of which has wobbled further in recent weeks.

But beyond those headwinds lies a more elemental question, which Hunterbrook has investigated through state regulatory filings, foreign generation data, and interviews with Bloom customers and former employees.

Do the fuel cells actually work as advertised?

The answer appears to be no — at least according to the data.

That could present a big problem for Bloom’s data center ambitions.

None of the Bloom deployments in the public record approaches gigawatt data center scale; the largest sites Bloom has disclosed anywhere are a pair of 40-megawatt plants in South Korea.

The AI commitments are of a different order: Oracle’s Project Jupiter arrangement alone is 10 times the size of Bloom’s entire metered U.S. fleet.

On Tuesday’s earnings call, CEO KR Sridhar listed “reliability without overbuild” among the capabilities that other commercial vendors cannot provide. The public record Hunterbrook analyzed points the other way: Across the metered fleet, Bloom’s fuel cells have typically delivered 80 to 90% of rated output, below the 95% number Bloom has cited in the past as its typical benchmark. This means a data center operator would need to install more units and replace their stacks more often than Bloom’s previous disclosures might suggest.

If the company’s existing deployments have had problems, what does that mean for data centers requiring an order of magnitude more power, at facilities where a missed output guarantee doesn’t mean a contractual penalty but, absent costly backup, downtime for the most expensive computers on earth?

It’s a question that comes at an interesting time for Bloom. One of its largest known shareholders earlier this year was the hedge fund Situational Awareness, led by Leopold Aschenbrenner. Today, the Financial Times reported that the fund has been sold to Citadel amid a rout in its AI positions.

The Promise

On the earnings call, Sridhar said the company “kept the promise that we make to our customers. Bloom will not be your bottleneck. We will deliver power at AI speed and enable our customers to grow.” The metered record suggests that the risk isn’t whether Bloom can ship its boxes to customers quickly, but rather how those boxes perform once they are running.

While each Bloom contract is individually negotiated, the company has periodically provided windows into the typical levels of efficiency, output, and durability it promises its customers. The benchmarks we use for our analysis are derived from those disclosures, found in a 2018 filing, a 2019 technical note, a 2021 SEC filing, and a 2025 purchase order from Fresno County, CA. The key metrics:

1. Efficiency guarantee: 46.9%. Efficiency measures the percentage of the energy in the gas fed to the box that comes out as electricity, and directly feeds into a customer’s fuel bill per kilowatt-hour. The most recent publicly available Bloom purchase order Hunterbrook identified, signed with Fresno County, CA, in 2025, guarantees that number will be at least the equivalent of 48.8%.1 According to that contract, if, at the end of each calendar year, the system’s cumulative efficiency is below that number, Bloom must pay liquidated damages. Earlier filings disclosed that its contracts typically set the efficiency benchmark at the equivalent of 46.9%, and to be conservative our analysis tests the fleet against that older, lower number. We call this benchmark the “guarantee line” throughout this article.

2. Replacement floor: 45.2%. The Fresno agreement separately requires that if cumulative efficiency, measured at the end of each calendar year, drops below this benchmark, Bloom must repair or replace the system within 90 days. We call this the “replacement floor.”

3. Output guarantee: 95%. Each installed Bloom system has a rated maximum output, known as its “nameplate capacity.” The company has disclosed that it typically guarantees the system will deliver 95% of that rating, measured annually.

4. Time between fuel cell component replacement: ~5 years. Bloom’s 2018 IPO prospectus told investors that in the early years, the period between stack replacements “was typically 12 to 18 months,” but that “from 2017 onwards we expect to average over five years between replacements.” When Hindenburg Research challenged that math in September 2019, Bloom responded that its latest-generation fuel cells shipped from 2016 to 2018 “have an average life of 4.8 to 5.2 years,” and published a technical note claiming median time to replacement had improved from 1.9 years for its 2011 vintage to 4.7 years for its 2015 vintage.

Since 2021, Bloom’s regular SEC filings have stopped reporting the specific output and efficiency levels its contracts guarantee, so these sources represent the best publicly available record of what Bloom is promising its customers.2 Notably, between its 2024 and 2025 Impact Reports, Bloom made its language regarding the life of its fuel cells more conservative. In 2024, the company said: “We predict 2024 fleet medium time to refurbishment as 5 years.” In 2025, the company deleted that language, saying only: “As our fuel cells age, efficiency decreases, and replacements are made.”

And Bloom’s real-world performance can be tracked and compared to these benchmarks via the fleet the company has already deployed: at Home Depots and hospitals, malls and utility substations, in New York, Delaware, California, and South Korea, and as supplemental power for a handful of Equinix’s legacy data centers.

Much of that fleet happens to be metered by governments and state-owned utilities, so the numbers are public.

Hunterbrook compiled five of those public datasets:

• South Korea: Hourly output from Korea South-East Power’s 8.35-megawatt Bundang Phase 6 plant, commissioned in April 2019, covering January 2022 through June 2026; plus monthly output and efficiency data from Korea Southern Power’s Yeongwol plant and Korea East-West Power’s Honam and Bukpyeong plants. Hunterbrook calculated Yeongwol’s efficiency from reported generation and gas consumption; Honam and Bukpyeong’s efficiency figures were calculated and published by the utilities. A separate daily Korea East-West Power file extends the Bukpyeong record through mid-2025.

• New York: Daily NYSERDA meter readings from September 2014 through December 2025, covering efficiency and output for 37 Bloom systems.3

• Delaware: Monthly filings with the Delaware Public Service Commission from June 2012 through May 2025 — 156 consecutive months — including efficiency and output data for the roughly 30-megawatt Bloom fleet serving Delmarva Power. This fleet was updated with newer models in 2019.

• California: Monthly Self-Generation Incentive Program reports from December 2012 through October 2023 (a handful of later biogas projects extend into 2025), containing efficiency and output data for 234 Bloom projects and roughly 14,100 project-months.

• United States, National: Monthly net-generation and gas consumption data reported to the U.S. Energy Information Administration from 2011 through December 2025, covering 126 installations Hunterbrook verified as Bloom installations.

To be clear: as we said above, a meter reading below one of Bloom’s guarantee lines on a given day or month does not necessarily imply a contractual breach. We do not know the specifics of the guarantees in each Bloom contract. And the company has disclosed warranties measured monthly or quarterly, as well as performance guaranties measured annually or cumulatively. Hunterbrook uses the daily and monthly readings to track when performance declines and how long it remains below Bloom’s disclosed levels — not to determine whether every individual reading breached a particular contract.4

Measured on the cumulative efficiency metric Bloom typically uses, most systems remain above the guarantee line, though 44 of the 126 Bloom systems in the federal record fall below the guarantee level even on that measure.

But cumulative efficiency can hide the repairs and replacements required to keep that average afloat. A fresh stack would lift current performance while the system’s stronger early years stay baked into the lifetime calculation. So a passing average can conceal hardware wearing out far faster than Bloom says it should.

Taken together, the monthly meters show what the cumulative numbers obscure: Efficiency falls to Bloom’s guarantee line within roughly two years, then flattens or rebounds in patterns consistent with repair or replacement. The lifetime average may still pass, but the hardware appears to be wearing out years before Bloom’s claimed five-year replacement interval, which could pose a serious risk to the unit economics of the company’s servicing business.

South Korea

South Korea is Bloom’s largest market outside the United States, using about 682 megawatts installed, or roughly 45% of the company’s ~1.5-gigawatt global fleet. Nearly all of it is installed at sites through Bloom’s partnership with SK ecoplant. Four of those installations are metered by Korean state power companies, and the readings are public.

One is the 8.35-megawatt Phase 6 expansion at the Bundang plant, operated by Korea South-East Power and commissioned in April 2019. The public hourly data Hunterbrook analyzed, the earliest available, begins in January 2022 and runs through June 2026.5

Bundang averaged about 95% of rated output in 2023 and has slipped every year since — to about 92% in 2025, the most recent full year, and roughly 90% in the first half of 2026. Its output shows no sustained recovery, running below Bloom’s typical 95% output benchmark in 22 of its last 24 months.

Three more plants, run by Korea Southern Power and Korea East-West Power, publish enough data to track efficiency. Yeongwol reports gas consumption, allowing Hunterbrook to calculate its efficiency directly; for Honam and Bukpyeong, Hunterbrook relied on efficiency figures calculated and published by the utilities.

• Yeongwol (15 MW, online 2021): efficiency fell from about 51% to 46% in three years; output from about 95% of nameplate capacity to 77%.

• Honam (15 MW, online 2021): efficiency fell from about 51% to 46% by late 2024; output from near 100% to 78%.

• Bukpyeong (4.2 MW, online 2022): efficiency fell from about 58% to 52%, while output slipped from above nameplate to ~93% in 2024, down to ~80% by mid-2025.

Another question mark hangs over Korea. SK ecoplant, a longtime strategic partner of Bloom, with a 500 MW purchase commitment Bloom valued at $4.5 billion in product and service revenue, was determined by Korean regulators to have overstated the 2022-2023 revenues of its U.S. fuel cell subsidiary, the unit that handles its Bloom business, allegedly to inflate its valuation ahead of a planned IPO.

Regulators initially deemed the violation intentional and recommended criminal prosecution before downgrading it to “gross negligence.” The IPO never happened: This spring, SK Group bought out its pre-IPO investors for roughly 1.05 trillion won (about $770 million) rather than take the company public by its July 2026 deadline.

As Hunterbrook reported in its first investigation into Bloom, months after Bloom’s relationship with SK ecoplant ended, Bloom began a new related-party partnership with Brookfield Asset Management ($BAM).

New York

New York’s data covers 37 Bloom installations. Among them: Home Depot stores, Queens Center Mall, Morgan Stanley’s Purchase campus, Fordham University, an IKEA in Red Hook, an Equinix data center, and a roughly 7.9-megawatt community fuel cell portfolio on Staten Island. The state meters the installations daily and posts the readings.

Straight out of the box, the 37 installations averaged 52.0%6 efficiency, about five points clear of the guarantee line. They did not stay there long. Losing an average of 2.4 percentage points a year7, every one of the 37 fell below the guarantee line at a median of 20 months, inside its second year of service. And 32 were still below it when their state-reported data ended.

Twenty-eight of the 37 decayed all the way to the replacement floor (the level at which Bloom’s contract with Fresno obliges it to repair or replace the hardware), and 13 finished below even that. Based on each installation’s measured rate of decline, the median projected time to reach that floor was under three years. Only one of the 37 was on pace to last the “over five years” that Bloom tells investors its stacks now run between replacements.

Output is no better. Only seven of the 37 units cleared 95% of rated output even in their first year; every one fell short on a cumulative average. Across the fleet, output slid from roughly 90% of nameplate in year one to about 80% by the final year of data.

One caveat: the metered New York fleet skews toward Bloom’s older ES-5-generation hardware. Twenty-six of the 37 units were installed in 2017-2018, and NYSERDA meters each unit for only about three years — so most of these records both begin and end in the ES-5 era, roughly 2017 to 2021. A newer batch installed in 2020 (Fordham, Equinix, the Red Hook IKEA, and the Annadale portfolio) runs through 2023, and one 2023 installation (Cablevision) runs through December 2025.

Bloom has a common response to numbers like these. After Hindenburg’s report drew on the same NYSERDA portal, the company filed a technical note arguing the state’s data was misleading: metering can begin 15 to 538 days after a unit switches on, missing the high-efficiency first weeks; a handful of sites carry gas boosters or backup batteries that shave a point or two; and the right yardstick, Bloom said, is cumulative efficiency, not a unit’s efficiency on any given day.

Grant the company all of it. Add back a half-percentage point for metering losses, three percentage points for ancillary equipment at the five community and resiliency sites that might have it, and even the full 538-day head start to every unit’s clock, and 30 of the 37 still fall below the guarantee line within about four years. That’s inside the five-year life Bloom promises between replacements.8

Delaware

Delaware is one of Bloom’s manufacturing homes and the site of its highest-profile early deployment: a roughly 30-megawatt fleet serving Delmarva Power under a state tariff. The project’s performance has been reported monthly to regulators since 2012. Importantly, Bloom replaced older-generation fuel cells with newer ones at this site in 2019, so any improvements in the technology available at that time would presumably be present in this data.

Hunterbrook compiled all 156 monthly observations. The initial 3-megawatt phase opened at roughly 52% efficiency in the summer of 2012. After the project reached its full 30-megawatt capacity in November 2013, efficiency fell below the guarantee line by August 2014 and through the replacement floor by November 2014, within a year of full buildout. From June 2015 through May 2019, annual weighted efficiency remained around 44%.

In 2019, Bloom repowered the project, doing away with the original 30 megawatts of Energy Servers and installing 27.5 megawatts of newer-generation equipment. Efficiency jumped straight back to about 52%. But the replacement stacks did exactly what the originals had done: declined, on a similar path, sliding back to about 47%, approximately the guarantee line, by 2023, before a partial rebound to roughly 49% by May 2025. That rebound could, of course, reflect maintenance or component replacements. Across the full record, the fleet’s monthly efficiency was below the guarantee line in 67 of its 156 months, and below the replacement floor in 52.

Output tells the same story. Measured against the fleet’s nameplate capacity in force each month (30 MW through early 2019, then 27.5 MW after the 2019 replacement), the fleet fell below Bloom’s typical 95% output guarantee in 152 of 156 months, averaging about 86%, and never once clearing 95% on a full-year average either. The 2019 replacement made no lasting difference: once the full fleet was online, it cleared the 95% guarantee just twice, both immediately after the 2019 repower, and never once in the time it was running at the full 30 MW nameplate capacity. (The only other two months above 95% came in 2012, when just 3-6 MW of the eventual fleet was installed.)

California

California is where Bloom was born, where Hindenburg found much of its 2019 evidence, and where the largest public sample of Bloom fuel cells lives. The state’s Self-Generation Incentive Program, which provided hundreds of millions of dollars in incentives to Bloom projects, requires five years of metered monthly reporting from every project it pays.

Hunterbrook analyzed 234 Bloom fuel-cell projects totaling about 92 megawatts: 14,116 project-months of data from December 2012 through October 2023 (a handful of later biogas projects extend into 2025), with the median project metered for five years — exactly the period needed to test Bloom’s five-year lifespan claim.

Almost none of that record meets the typical benchmarks. Bloom’s California project-months came in below the 95% output guarantee 97.4% of the time and below 90% in three months out of four. After excluding 20 physically impossible monthly readings above 110% capacity factor9, not one of the 234 projects averaged 95% of nameplate over its monitored life; only two cleared even 90%. The median project delivered about 84%.

The efficiency record in California largely tracks what we saw in New York.

Bloom’s projects began at a median 55.6% efficiency across their first three reported months. Median efficiency fell to 50.3% in year two, then to 49.2%, 48.5%, and 47.9% in years three through five. Of the 231 projects with usable fuel-consumption data, 105 recorded at least one month below Bloom’s 45.2% repair-or-replace threshold.

After the first year drop, the decline slows. That flattening is consistent with Bloom periodically repairing or replacing lower-performing power modules as they approach contractual thresholds, preventing the fleet average from falling much further, though the SGIP data do not identify individual replacement events.

This is the same dataset Hindenburg used in 2019, when it calculated that Bloom’s post-2016 California units were on pace to need stack replacement in under three years. That was a projection: those units had a median of 32 months on the meter at the time. The record has since added 3,450 project-months, and the answer has not changed.

America: The National Data

The U.S. Energy Information Administration collects generator characteristics annually through Form EIA-860 and publishes monthly or annual plant-level generation and fuel-consumption data through Form EIA-923, federal filings used to track power plants across the country.

The EIA does not identify the manufacturer of fuel cells in its published generator inventory. Hunterbrook identified 167 fuel-cell plants with at least one megawatt of combined fuel cell nameplate capacity and positive generation in the EIA record, cross-referencing the Department of Energy’s stationary fuel-cell inventory, EIA operator records, and court, regulatory, and SEC filings.

Using this methodology, we were able to identify 126 as Bloom Energy (as well as 37 as FuelCell Energy, and four as part of the UTC Power and Doosan PureCell lineage). Those 126 Bloom plants total about 245 megawatts across nine states, operating from 2011 through 2025, and include installations in New Jersey, Connecticut, Massachusetts, Maryland, North Carolina, and Utah that the other datasets do not capture.10

The national record tells the regional story again. When new, the fleet ran at about 51% efficiency. Within two years it fell to roughly 47%, barely over the guarantee line. As in California and Delaware, the way that steep first-year drop collapses into a slow crawl appears to be consistent with stacks being swapped as they hit the floor (though it’s hard to know for certain). Measured the way Bloom measures it (using a system’s cumulative, whole-life average), 44 of the 126 plants run below the guarantee line, and roughly 60% of the 126 never rise more than a point above it. And 110 of 111 reliably metered11 plants average below the 95% output Bloom typically guarantees.

Bloom’s showcase customers fare no better. Apple, whose Maiden, North Carolina, data center Bloom spent years promoting as a clean-energy landmark, performed worst on output: its three reliably metered sites ended at a median 42.9% efficiency and delivered a median 69% of rated output — before its flagship Maiden, North Carolina plant dropped off the federal record in 2021.

Equinix, Bloom’s marquee data-center customer before the AI era with 15 sites across the fleet, delivered a median 85% of nameplate across its nine reliably metered sites, while their median efficiency ended around Bloom’s guarantee line. AT&T, Kaiser, and Intel also fell below 95% on a customer-level median.

“Multimillion-Dollar Payment”

Hunterbrook also spoke to some of the customers who lived through the decay curve.

A part-owner of one of the larger Bloom installations in New York told Hunterbrook that their group signed a service contract after being shown an independent engineering report during the sales process. The source shared this report with Hunterbrook.

The source said Bloom’s sales team also promised that the fuel cells would perform at 95% output, with a life expectancy beyond five years.

That turned out to be wildly optimistic, according to the source. “They have never been able to get beyond that time frame ... they have failures a lot quicker than that.”

“Based on the contract, Bloom paid a multimillion-dollar payment to us,” the source said, because the fuel cells allegedly operated “below 95%.” The source did not provide evidence of this payment.

“The 95% is gone,” the source said. “Long gone.”

LSB Industries and NineDot Energy separately told Hunterbrook that they no longer work with Bloom.

What Bloom Gets Right — And What It Doesn’t

Bloom has repeatedly pointed to returning customers as evidence that its fuel cells work. In February, CEO KR Sridhar said more than two-thirds of the company’s business came from repeat customers. In April, he put the figure at 70% to 80% of its business. During the company’s earnings call on Tuesday, he described the measure more specifically, saying roughly 80% of orders came from repeat customers.

“That speaks more loudly than anything else about how happy our customers are,” he said, days after Hunterbrook had reached out to the company for comment.

“We do not obsess on the competition,” he said. “We obsess on the customer.”

But Bloom has not identified many of the customers behind those figures. And on Tuesday’s call, CFO Simon Edwards acknowledged the ambiguity, stating, “When you see the word customer in our filings, it can mean either party, the financier that buys from us and appears in our revenue and concentration disclosures or the end customer whose demand created the deal.” Its SEC filings disclose the concentration of revenue among its largest customers without naming most of them.

To the company’s credit, the public record is not all bleak — and the data shows the potential for real generational improvement. In the New York data, 2014-2018 systems averaged roughly 83% of rated output over their lives and the newest monitored project — a 2023 Cablevision installation — has run about 94% over its life, still hitting 97% to 99% at the end of its data.

One Bloom customer told Hunterbrook that Bloom “remains in compliance with our contract” and that it continues to save money. A California dairy-digester operator said their three Bloom projects have been “fairly reliable,” running “right around the contracted minimum” — though their company will not buy more, citing price, and now prefers competitor Mainspring’s linear generators.

But improvement is not the same as delivering the expected number. Even the improved units often miss the typical 95% guarantee on lifetime average; the two largest 2020-vintage projects in the New York data ran near 80%. And Delaware — the one dataset long enough to watch Bloom’s replacement hardware age — shows the newer stacks decaying on the same slope as the old.

That distinction has potential financial consequences. Every fuel cell Bloom ships is also a service liability. On Tuesday’s earnings call, Edwards attributed the company’s 22% service margin to “fleet performance, longer stack life and scale.” He added, “We believe we will sustain them there over the long term.” How Bloom accounts for these things makes the claim testable. Edwards explained on the call that service revenue “is recognized ratably net of guarantees while the service costs are booked as incurred….” Edwards also stated that “stack replacement in particular moves the margin quarter to quarter.”

In other words, every stack that wears out early lands directly on the margin line Edwards discussed.

Meanwhile, Bloom’s current accrued warranty liability rose from $20.0 million at Dec. 31, 2025, to $77.8 million at June 30, 2026, according to the company’s most recent quarterly filing, which attributed higher performance-guarantee costs to “the effects of fleet degradation.”

If stacks last more than five years, Bloom’s 10-, 15-, and 20-year service contracts can be profitable. If stacks last roughly two years in the field — as, for example, the New York median implies — then every gigawatt of AI bookings is also a gigawatt of stack replacements arriving twice as often as its stated five-year stack life implies.

That also magnifies Bloom’s scandium problem. Scandium is embedded in the fuel-cell stacks, so the faster those stacks wear out, the more scandium Bloom must source over the life of each installation.

Asked on Tuesday’s earnings call how much scandium Bloom uses and how much supply it has available, Sridhar insisted that the company could support 25 gigawatts of deployments and was not dependent on China, without addressing Hunterbrook’s reporting that Bloom has sourced the material from China despite repeatedly denying it.

Then he shut down the exchange: “Everything else is proprietary to the company. Next question.”

Our next question: Whether the product at the center of Bloom’s $50 billion valuation can actually deliver as promised.

This piece represents Hunterbrook Media’s best estimate. As always, we have laid out both what we know and how we know it. That doesn’t mean we didn’t miss something. We welcome other analyses and estimates, including from Bloom. Write to us with any math of your own at ideas@hntrbrk.com.

Author

Dhruv Patel is an investigative journalist based in Cambridge, Massachusetts, specializing in data-driven reporting. He helps spearhead investigative coverage at The Harvard Crimson, and his reporting has been cited and discussed by The New York Times, CNN, The Boston Globe, ABC News, and BBC, where he also frequently contributes commentary. A John Harvard Scholar at Harvard College, he studies computer science and economics to leverage machine learning for accountability journalism.

Editor

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

Sam Koppelman and Till Daldrup contributed reporting.

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The information presented is current as of the date indicated. No representation regarding the completeness or timeliness of this information is made. Some information is sourced from third parties and, while believed to be reliable, has not been independently verified, and its accuracy or completeness is not guaranteed. Hunterbrook Media is not affiliated with any sites linked to this website. Investment in securities and other financial instruments involves significant risk, including the potential loss of principal. Users are advised to conduct their own due diligence and consult professional advisors before engaging in any investment activity. Use of Hunterbrook Media’s content is entirely at the user’s risk. Users shall not use this site for any illegal or prohibited purposes and shall comply with all applicable local, state, national, and international laws and regulations.

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Based on Hunterbrook Media’s reporting, at the time of publication Hunterbrook Capital is short $BE including derivatives and long a basket of comparable securities, as well as long $NB including derivatives and short a basket of comparable securities. Positions will change. This article is not investment advice or a recommendation to buy, sell, or hold any security. See full disclosures on our website.

By: Till Daldrup, Dhruv Patel, Jean Wang, Blake Spendley, Sam Koppelman

Editor: Vikas Kumar

• Bloom Energy is one of the AI boom’s biggest winners. $BE is up about 2,000% in two years. Its valuation peaked around $100 billion. The vision: fuel cells powering AI data centers years faster than the electric grid, with Bloom saying it can scale from about a gigawatt of deployments in 2026 to 5 gigawatts annually. It’s a compelling pitch, especially in a world where power from legacy players, including turbine manufacturers, is backlogged.

• That growth story rests on a supply chain claim that Bloom’s CEO has made at least five times since February 2025, on earnings calls, to Semafor, on a podcast — and onstage with The Wall Street Journal last month. The promise: Bloom has “no China supply chain” and is “not dependent on China for scandium,” the rare earth at the core of each Bloom fuel cell. Bloom’s claim matters because Beijing now requires an export license for every shipment of scandium leaving China. If Bloom depends on Chinese scandium, China holds an off-switch on Bloom — and on the American data centers that may one day use its power.

• The problem: Bloom is, in fact, reliant on C5 Chinese scandium, according to global trade data, Chinese corporate filings, satellite imagery, and Hunterbrook’s messages with Bloom’s suppliers in China. Hunterbrook traced four separate China-linked routes into Bloom’s supply chain — scandium oxide shipped directly to its Delaware plant, plus scandium-bearing ceramics and powders flowing through intermediaries in Thailand, Japan, and South Korea. A sales representative of Hunan Oriental Scandium — which claims over 50% of the global market for fuel-cell-grade scandium oxide — told Hunterbrook: “We are also BE’s largest supplier of scandium.” Asked how the material reaches U.S. customers under Beijing’s controls: “Not exported directly.” Hunan Oriental was featured at Bloom’s May supplier conference as one of three Chinese scandium-linked suppliers. One received Bloom’s “Impact Supplier Award.”

• Show Me the Scandium: Even with supply from China, the scandium math fails. Hunterbrook’s supply-demand model — built from government filings, Bloom’s patents, industry data, and peer-reviewed studies — shows Bloom alone needs roughly 220 tons of scandium oxide to meet Wall Street’s 5 GW expectations. But that’s against total projected global supply of only about 240 tons versus total global demand of about 310 tons, including supply locked up by customers like Lockheed Martin (for the F-35 fighter jet). Bloom already claims to be the largest scandium consumer in the world. On the numbers, the production ramp underpinning Bloom’s valuation appears physically and commercially unattainable — with essentially all Wall Street models of Bloom’s production implying a scandium shortage by 2028 based on Hunterbrook’s model.

• The demand side of the story is also not what it appears. In 4Q25, 74% of Bloom’s revenue — $574 million of $778 million — came from joint ventures Bloom part-owns with Brookfield. Bloom’s own footnotes concede these customers “may be a project-finance affiliate rather than the ultimate end user.” What Bloom’s recent revenue growth shows is that Brookfield will finance Bloom’s production, not that a meaningful customer base has adopted Bloom’s fuel cells. And it appears Bloom has been recognizing revenue well before its fuel cells have actually been deployed.

• The Brookfield partnership’s initial promise, a European AI factory site to be named “before the end of the year,” does not seem to have been fulfilled. The designated anchor tenant for its unbuilt AI project is Radiant, Brookfield’s own captive cloud company, which has no publicly named CEO or disclosed customers. The Brookfield fund backing Radiant is anchored in part by Nvidia, whose chips the factories will house. Even by the standards of AI roundtripping — which can be positive sum — the deal looks especially circular.

• Bloom markets an unaudited $20 billion “backlog” of orders. Its remaining performance obligations (RPO) — the analog to backlog that its auditor reviews — total $492.6 million as of March 31. That’s roughly 2.5% of the backlog. Among 10 peers Hunterbrook analyzed, including GE Vernova, Oracle, Microsoft, and CoreWeave, the widest comparable gap between backlog and RPO was about 2x. Bloom’s is over 40x, in part because it includes ongoing servicing revenue customers are not obligated to pay and tax credits the government has not agreed to grant.

• The two flagship projects presumably driving that backlog are both facing serious challenges to their viability. Oracle’s Project Jupiter in New Mexico has no approved air permit for fuel cells and no gas pipeline to feed the fuel cells, leading research firm SemiAnalysis to push back its base case for first power from 2027 to 2029. Hunterbrook interviews with New Mexico officials and an environmental group suing to stop the Oracle project indicate it could be delayed into the 2030s, or even canceled outright like Blackstone’s data center in Virginia last week. Meanwhile, AEP’s $2.65 billion fuel cell order also appears to have slipped, with the utility updating its investor deck from a target deployment by the end of 2028 to one “no later than 2030.” That deal, which represents a meaningful share of Bloom’s backlog — related to a campus that reportedly lost its developer Crusoe in June — is backstopped by an unnamed hyperscaler that can walk away by covering AEP’s costs incurred, plus roughly 10%. Both new Oracle and AEP delays followed Bloom raising guidance in its last earnings call.

• Put together: Either the 5 GW ramp is real — and the scandium math breaks it, plus Beijing holds the off-switch — or it is not, and the record quarters are largely circular financing.

• Bloom can’t easily engineer its way out. Its own patents identify too little scandium in the electrolyte as a cause of accelerated fuel-cell aging. Cutting scandium seems to reduce the stack life on which Bloom’s 10-to-15-year service contracts depend. Nor can ex-China supply fill the gap: “Right now in the Western world, there’s basically no scandium processing capability to speak of, or just very, very little,” John Mavrogenes, a professor of economic geology at the Australian National University, told Hunterbrook. “It would be a long road to say we’re gonna get serious about scandia.”

• Bloom has repeated this pattern for years: When end demand doesn’t materialize, it finds an intermediary willing to bet on Bloom — then books that bet as growth. Delaware ratepayers were legally obligated to buy Bloom’s power for two decades, at costs that eventually ran over five times what the public was originally told, for jobs that came up 600 short of Bloom’s projections. SK ecoplant committed to volumes that propped up two years of results, then quietly got three extra years to comply when Korean demand stalled. The month after SK ecoplant began selling its Bloom stake, Bloom formed its joint ventures with Brookfield, which is now the counterparty buying Bloom’s boxes. Each time, the financier’s commitment — not a customer’s consumption — makes the numbers.

• The people in charge of reporting those numbers keep changing. Bloom has had four finance chiefs since the start of 2024, including nearly a year with no permanent CFO, which happened to be the same year the Brookfield structure was built. The CEO, meanwhile, has never changed.

• Neither Bloom nor its CEO replied to Hunterbrook’s repeated requests for comment, which laid out our findings in detail. Oracle replied to initial outreach, then did not respond when asked if it knew Bloom sources from China. Brookfield did not respond to repeated outreach from Hunterbrook. AEP directed Hunterbrook to links of statements it had already made.

• While Bloom did not respond to our requests, it certainly seems like someone at the company read our questions. The day before publication, Bloom published a blog post about scandium, written by its COO. The post confirmed several of Hunterbrook’s findings, including that scandium oxide plays “an important role” in the functioning of its fuel cells, and that Bloom believes itself to be the world’s biggest consumer of the rare earth. Bloom also included vague responses to some of our other findings. Rather than echo Sridhar’s unequivocal statements about China, the blog post asserts that no “single country” can determine Bloom’s “destiny.” It explains that Bloom sources scandium from the by-products of other mining operations — as Hunterbrook’s reporting already noted — giving titanium as an example. Bloom emphasized that more than half of titanium mining (though not necessarily half of scandium production) occurs “outside of China.” The post further claims Bloom believes its supply chain “can support up to 25 GW per year,” but did not share any details on the calculations or assumptions that lead the company to that belief; nor did Bloom specify the timeline of when that supply would become available. Per our calculations, which are based on the scandium levels listed in Bloom’s own patents, 25 GW of power would require roughly 620 tons of scandium a year: about ten times what the entire world consumed in 2025, per USGS figures. Bloom cautions readers: “This article was published on July 7, 2026, and is for informational and educational purposes only. Readers are encouraged to read Bloom’s full disclosures, including information on potential risks and uncertainties that may impact Bloom’s business, set forth in its periodic reports filed with the SEC.” As far as we can tell, no other post on the company’s blog includes this disclaimer. As of press time, Bloom has not issued a press release or 8-K denying any of the facts presented in this article.

“We are not dependent on China for scandium,” Bloom Energy ($BE) CEO KR Sridhar pledged in an April 2025 earnings call. “I can state that very clearly.”

“We do import materials and components from abroad, but not from China,” he said.

Analysts pressed him three times on Bloom’s supply chain. He left no room for ambiguity.

“What you need to understand is none of our critical materials come from contested supply chains or war zones, and there is no China supply chain for us.”

Sridhar made the same guarantee in Bloom’s February 2025 call: “We are not dependent on China for our supply chain, and that is super important.”

That April, China added scandium to a list of materials requiring national security export licenses. That means the material can only leave China with Beijing’s discretion on a case-by-case basis.

Among many exotic uses, scandium is essential to America’s F-35 fighter jets, making access to the metal a national security issue for both the U.S. and China.

But the biggest buyer of scandium isn’t any government. It’s Bloom, which, according to Sridhar, has become the single largest consumer of the metal in the world, because scandium is a critical component of its fuel cells.

Specifically, scandium is the key material in the electrolyte of Bloom’s fuel cells (“Bloom Boxes”). It allows electricity to be produced and lengthens the fuel cell’s lifespan. There is no known commercially viable substitute for scandium in Bloom’s fuel cell design that wouldn’t degrade quality, according to the company’s patents and fuel cell experts that Hunterbrook interviewed.

The problem: China produces most of the world’s scandium, by one estimate as much as 90%.

That is why the company has been asked, repeatedly, about how it procures the metal. And it is likely why Bloom has been so insistent that it is not reliant on China.

In a September 2025 interview with Semafor, Sridhar went as far as to say that Bloom had decided more than 20 years ago that it would not rely on Chinese suppliers. “Starting in 2004, we said we are not going to depend on a Chinese supply chain. If we believe in energy abundance for all, there cannot be a single source to strangle you,” he said.

Then he told an energy podcast: “We never coupled ourselves to the China supply chain, which in hindsight means today we don’t have to decouple from something.” Sridhar specifically said this was a big part of Bloom’s edge over gas turbine producers, whose supply chains he described as rooted “in the same place.”

Last month, Sridhar stated yet again that Bloom is not sourcing from China in a June 10 interview onstage with The Wall Street Journal.

”Very early on in the company we made a decision that we are only going to depend on supply chains that we can completely trust and that was a country we avoided,” he said, responding to a WSJ question on China. He gave 2005 as the year the company made this decision. Then he teased a possible deal with the U.S. Department of Defense based on Bloom’s independence from Chinese supply.

But Bloom does rely on Chinese scandium — and it did at the time of each of these claims, according to Hunterbrook’s analysis based on trade data, satellite images, and conversations with major suppliers and experts.

In total, we found four separate trade routes that appear to show Chinese scandium is still part of Bloom’s supply chain, and the material is reaching the U.S. through intermediary countries.

As recently as May 2026, Bloom even featured three Chinese scandium suppliers — one of them with the word “scandium” in its name — on a logo wall at its supplier conference.

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After the April 2025 earnings call, Bloom made a subtle update to its quarterly filing for 3Q25, adding that China supplies “multiple components including 70% of rare earth metals used in electronic and electromechanical components that are part of our tier 2 and tier 3 sub-assembly suppliers.” Its 10-K report, filed in February, then used substantially similar language on pages 47 and 56, but dropped the 70% figure, and added language stating that “continued escalation of trade tensions between China and the U.S. could impact our ability to source these rare earth metals and components.”

Yet the company maintained in both filings: “Our supply chain is not dependent on China.”

And months after the annual filing, Sridhar went onstage with The Wall Street Journal in June 2026 — where he reiterated, unambiguously, that the company does not source from China.

“I don’t know of anywhere else they would get it from that’s of the scale that they would need,” Eric Wachsman, director of the Maryland Energy Innovation Institute, told Hunterbrook about Bloom’s scandium needs. “You have to be able to purify it, and that purification process tends to be primarily in China.”

One way Bloom appears to be obfuscating its reliance on China is by rerouting shipments through intermediary countries. This may look better in the trade data, and provide some support for Sridhar’s claim that Bloom sources from “multiple countries” across “multiple continents,” but it doesn’t change the fact that a large chunk of the scandium is still from China: a single point of failure supply chain risk.

And China can cut off that scandium supply regardless of how indirectly it flows to Bloom.

In fact, multiple Chinese scandium suppliers told Hunterbrook that China’s Ministry of Commerce requires end users of scandium — not just exporters — to provide information to the government regarding its planned use for the material. If the Chinese Communist Party does not approve, it can block the exports.

Bloom’s reliance on this supply chain means China may have an off-switch on America’s data center build-out — at least, data centers dependent on Bloom.

After about two decades of losses since its 2001 founding, Bloom recently became a darling of the AI stock boom because fuel cells might provide data centers with behind-the-meter power. Fuel cell financials had been uneconomical, but new grid connections are now taking years, so data centers are willing to pay the premium for quicker time to power. The numbers work even better with the cells now consuming cheap methane instead of more expensive green hydrogen. (Whether Bloom’s original approach was green in the first place is an open question that led to an EPA fine against Bloom and featured in Hindenburg Research’s investigation.)

Bloom’s keystone data center deal is an agreement with Oracle ($ORCL) to provide up to 2.8 GW of power for data centers. According to Hunterbrook’s model, there may not be enough scandium on the entire global market to meet the production required for that deal, let alone the rest of Bloom’s backlog — which includes a deal with the Nebius Group ($NBIS), a neocloud backed by Nvidia ($NVDA).

$BE stock nearly quadrupled in 2025 after the news broke of the Oracle partnership — and more than doubled again in the first half of 2026. In total, its share price is up more than 2,000% within two years, with Bloom’s market cap peaking around $100 billion in June, rivaling energy giants like Constellation ($CEG) and Vistra ($VST), on the thesis Bloom can rapidly scale up.

$BE also appeared to be a big winner for Leopold Aschenbrenner’s fund Situational Awareness, though the fund sold over a third of its disclosed $BE position in its most recently reported quarter, even as its assets under management soared.

But can Bloom actually deliver enough fuel cells?

The answer to that question may explain the reason for the company’s repeated insistence on its independence from China.

On its scandium sources, Bloom has told investors: “We don’t reveal those sources and methods. That’s part of our IP.”

But Hunterbrook reconstructed the global scandium supply chain — identifying the few active projects and evaluating potential future sources. The newsroom also reviewed patents, market data, and academic and industry research to estimate Bloom’s consumption.

The conclusion was clear: Bloom lacks enough scandium for its lofty ambitions and timeline.

The model’s math aims to be conservative. Rather than counting only current production, it gives partial credit to meaningful planned production, including generous assumptions about the likelihood and speed with which pre-commercial projects can ramp up. It also assumes the existing growth rate of scandium consumption by other customers will hold steady, despite wider adoption across aerospace, military, and automotive industries. The model also considers the case in which Bloom has engaged in significant “thrifting” (essentially recycling scandium from used fuel cells) and innovating to consume less scandium, though it does not assume needle-moving stockpiling for reasons described below.

Bloom did not respond to repeated requests for comment about its scandium supply. Instead, the day before publication, its COO posted a blog asserting Bloom’s supply chain “can support up to 25 GW per year,” without providing evidence. Bloom said it “maintains strict confidentiality around its sourcing network” — supplier relationships and sourcing volumes are “proprietary” — “to protect the resilience of our supply chain.”

Bloom then cautions readers to read its “full disclosures, including information on potential risks and uncertainties that may impact Bloom’s business, set forth in its periodic reports filed with the SEC.”

Hunterbrook’s data demonstrates that without Chinese scandium, even if every new non-Chinese project meets current timelines, adjusted for the risk it slips, in 2030 there would only be about 60 tons of scandium oxide that’s not already contracted by other customers like Lockheed Martin.

Bloom needs about 220 tons to power 5 GW and fulfill unit replacements. Even with Chinese supply, the data indicates there will not be enough available scandium to meet Wall Street’s expectations for Bloom.

If Bloom can’t deliver enough fuel cells, it wouldn’t be the first time the company’s claims didn’t match reality. In the 16 years since Sridhar debuted Bloom to a national audience on 60 Minutes, its statements about cost, hazardous waste, ratepayer fees, and fuel cell life have been contradicted by the record, including state filings, federal enforcement findings, and Bloom’s own SEC disclosures.

Each time, the better number came first and the correction came later, in a clawback, a penalty, or a restatement.

This time, it’s not just the scandium supply numbers that don’t add up. It’s also the demand for Bloom’s products.

Bloom’s recent string of record-setting quarters rests on fuel cells sold to financing vehicles the company itself part-owns with the financier Brookfield, but the orders don’t appear to be turning into operating data centers.

And since Bloom’s last guidance update, two flagship destinations have recently slipped by years.

Project Jupiter in New Mexico has no approved air permit and a gas pipeline stuck at FERC. In May, the industry publication SemiAnalysis estimated first power at the site in 2029. Meanwhile, Bloom’s fuel cell deal with the utility AEP — apparently tied to a hyperscaler plant outside Cheyenne, Wyoming — slid from “no later than year-end 2028” to “no later than 2030,” according to AEP investor slide decks.

The roughly $20 billion backlog Bloom markets to investors is more than 40 times the $492.6 million in binding contractual obligations disclosed in its most recent quarterly filing. Across peers Hunterbrook analyzed, from turbine makers to hyperscalers, the widest comparable gap was about two times. This, at a company that has run through four finance chiefs since the start of 2024 — and five since 2020.

The scandium shortage and the demand gap converge on a single debate: whether the 5 GW ramp key to Bloom’s valuation is real, or whether it’s just the latest Bloom story that turns out to be too good to be true.

INSIDE THE CHINA SUPPLY CHAIN BLOOM SAID IT DIDN’T HAVE

Hunan Oriental Scandium is a major scandium producer in China. When a Hunterbrook reporter reached out about shipments to the U.S., a representative listed the company’s credentials.

“Our global market share for 4N scandium oxide generally exceeds 50%,” they wrote, adding: “We are also BE’s largest supplier of scandium.” BE is the ticker symbol for Bloom Energy.

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A bold claim by the Chinese supplier, as Bloom’s CEO said his company has no China supply chain.

But trade data and company announcements corroborate longstanding ties between Bloom and Hunan Oriental, which is a subsidiary of LB Group, a large Chinese chemicals company.

Hunan Oriental shipped scandium oxide directly to Bloom in Newark, Delaware, at least four times between August 2023 and May 2024, according to commercially available trade data. The product descriptions include “scandium oxide” and “scandium oxide drum pits.”

Bloom also visited the same supplier a few months after the first of these shipments.

On November 2 and 3 in 2023, a Bloom delegation from the U.S. visited Henan Rongjia Scandium-Vanadium, a “wholly-owned subsidiary of Hunan Oriental Scandium,” for an “inspection and exchange,” according to a Chinese-language company account. The Bloom delegation included a product manager, chief engineer, senior staff engineer, supply-chain procurement manager, and quality manager.

The delegation toured LB Group’s “exhibition hall, corporate technology center, and Rongjia’s scandium oxide production workshop,” the company said in a press release.

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A photo taken at Bloom’s 2026 supplier conference in May and posted to LinkedIn appears to confirm the relationship between the two companies has continued: It shows Hunan Oriental Scandium’s logo.

But while Hunan Oriental claims to be one of Bloom’s top suppliers, no further shipments to the fuel cell manufacturer appeared in that trade data, after the scandium deliveries in 2023 and 2024.

So how does the material reach Bloom now, especially given the tighter Chinese export controls on rare earths that took effect in 2025?

When the Hunterbrook reporter asked the Hunan Oriental sales rep how the company is sending its scandium to U.S. customers, the response was blunt.

“Not exported directly,” they wrote.

THE PLAYBOOK — AND THE MONEY RUNNING IT

A Chinese securities filing gives insight into Bloom’s supply chain playbook and how one of its partners has apparently obfuscated Bloom’s reliance on Chinese products.

Zhejiang Chunhui Intelligent Control, a Chinese manufacturer, has supplied Bloom with the temperature sensors that monitor its fuel cell stacks since 2007. In a November 2025 disclosure to the Shenzhen Stock Exchange, reviewed and translated from Chinese by Hunterbrook, Chunhui describes itself as Bloom’s dominant sensor supplier, accounting for more than 70% of the American company’s purchases of the part over a roughly two-decade relationship.

The sensors are not scandium. But the filing lays out, in Chunhui’s own words, how Bloom is trying to limit its exposure to Chinese trade. Bloom “has begun changing its supply-chain process” — directing Chunhui to ship its products not to the United States, but to Bloom’s “other overseas suppliers,” who “complete assembly before shipping on to the United States,” in order to “gradually reduce direct exports to the U.S. and thereby mitigate the impact of U.S. tariff policies.”

The Chinese filing even names Bloom’s waypoints.

Starting in 2025, Chunhui began routing its Bloom-bound product through Kaori Heat Treatment in Taiwan and MTAR Technologies in India. Both are Bloom suppliers. The trade data matches: Chunhui’s direct deliveries to the U.S. fall during this period and become sporadic, while the weight of shipments from Kaori and MTAR to Bloom increases significantly.

Chunhui’s direct sales to Bloom dropped from roughly 31% of its revenue to under 13% as the rerouting took hold.

Bloom’s recent 10-K disclosure appears to confirm that the company is using the same playbook with rare earth metals and compounds from China by routing them to the company’s “tier 2 and tier 3 sub-assembly suppliers.”

Hunterbrook looked at Bloom’s shipments over the past two years to uncover the waypoints through which Bloom receives Chinese scandium. We identified three trade routes that appear to obscure the Chinese origin of Bloom’s scandium imports.

ROUTE 1: A MAJOR CHINESE SUPPLIER’S THAI SUBSIDIARY

According to the import data we reviewed, Glory Winner (Thailand) Co. Ltd. shipped more than 154 metric tons of ceramic electrolyte membranes to from Thailand to Bloom between July 2024 and November 2025. Glory Winner is a subsidiary of China’s Three Circle Group, which has been identified as a “core supplier” for Bloom in Chinese media.

Scandium is a key component of the ceramic electrolyte membranes in Bloom’s fuel cells, per the company’s own patents and multiple fuel cell experts interviewed by Hunterbrook.

The United States Geological Survey (USGS) does not list Thailand as a scandium producer.

So while Bloom’s scandium-containing parts sourced from Glory Winner may not be shipped directly from China, trade data and Chinese industry coverage indicate that they are in fact of Chinese origin.

A diagram in Three Circle’s 2026 draft IPO prospectus for the Hong Kong Stock Exchange shows that the company’s China-based operation is supplying “raw materials and equipment” to Glory Winner. Elsewhere in the document, Three Circle says “the main raw materials are all sourced domestically,” referring to China.

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Three Circle’s 2021 response to a Shenzhen Stock Exchange inquiry letter suggests that this trade route was set up in 2019 and designed to avoid U.S. tariffs.

“To mitigate the impact of the additional tariffs on fuel cell separator plates, the company consulted with relevant customers and implemented the following measures,” the document states. “In July 2019, it established a new subsidiary, Glory Winner (Thailand) Co., Ltd., and relocated the fuel cell separator plates business to Thailand, assigning production and sales responsibilities to the new subsidiary.”

But Three Circle did not always use the Thai route.

Trade data shows a related entity, Hong Kong Threecircle Electronic, shipping “ceramic substrate for fuel cell application” directly to Bloom under its own name between 2024 and 2025.

Glory Winner hasn’t shipped to Bloom since November 2025 according to the trade data, over six months after the Bloom CEO’s repeated denial of reliance on Chinese scandium during the earnings call. But Three Circle told investors as recently as December that it “has established a long-term cooperative relationship with Bloom Energy and is its main supplier of fuel cell membrane sheets,” according to Chinese media.

The company, which happens to be listing in Hong Kong this week, did not name Bloom directly in its IPO prospectus. Instead it said its largest customer in 2023, 2024, and 2025 is a “public company listed in the U.S. that mainly engages in development and production of reliable new energy products.” It also disclosed: “SOFC electrolyte sheets have been supplied to a leading North American fuel cell company.”

Similarly to Hunan Oriental Scandium’s logo, Three Circle’s logo appeared on a logo wall at Bloom’s May 2026 supplier conference, indicating the two companies are still doing business together.

‍But while the apparent rerouting through Three Circle’s Thailand subsidiary might help evade U.S. tariffs, it likely will do nothing to mitigate Beijing’s export control choke point, as Hunterbrook’s conversation with Hunan Oriental indicated.

When Hunterbrook asked Hunan Oriental about procuring via an intermediary in a third country, the company’s representative walked through the rigorous disclosure requirement that included explicit disclosures from the end user, including financial information, as well as business scope and main products produced. The ultimate end user had to directly provide the information to the exporter before the product could be shipped.

“Whether the declaration is approved depends on the Ministry of Commerce’s review of the buyer and the intended use of the products,” the rep said, adding the process typically takes 45 days.

The requirements also include a commercial inspection, the rep said.

“No step can be skipped.”

It’s a rigorous process. So rigorous that Hunan Oriental’s second representative had questions about the end user for the sale it was discussing, asking Hunterbrook’s journalist: “Isn’t this company an investigative financial media outlet based in New York, USA?”

ROUTE 2: A JAPANESE SUPPLIER’S CHINESE TRADING ARM

Bloom also receives “scandia-stabilized zirconia powder” from Daiichi Kigenso Kagaku Kogyo (DKK) in Japan, according to import records reviewed by Hunterbrook. The powder is the raw version of the critical material the fuel cell manufacturer needs for its electrolytes. Since September 2024, Bloom has received almost 300 drums of “scandia” or “scandia-stabilized” powder, though not all was labeled as zirconia powder. While they were shipped from Japan, a look at DKK’s corporate structure suggests the powder’s actual provenance is China.

The Japanese materials manufacturer’s corporate network includes two Chinese “associated companies” and one Chinese subsidiary, DKK (Shanghai) Materials Trading, which specializes in zirconium compounds.

Its website features scandium prominently. The product page links to DKK’s Japanese website of zirconia for solid oxide fuel cells, the type of scandia-stabilized zirconia powder Bloom bought from DKK, suggesting the Japanese company sources from its Chinese subsidiary.

A possible non-Chinese source of scandium for a Japanese supplier is Sumitomo Metal Mining, which recovers scandium as a byproduct at its nickel operation in the Philippines and refines it into scandium oxide in Japan. Sumitomo Metal Mining said in 2016 that it had signed a long-term scandium supply deal with an unnamed “major U.S.-based fuel cell manufacturer,” widely believed to be Bloom.

But that operation has remained small. Philippine government data from the Mines and Geosciences Bureau’s Caraga office shows scandium oxalate output from the region that hosts Sumitomo’s Taganito operation hasn’t meaningfully exceeded 8 tons in a year in scandium-oxide equivalent (there’s about 1 ton of usable scandium oxide from each 3 tons of scandium oxalate). Sumitomo said in May that it planned to increase scandium production capacity, and Japanese press reported the increase at about 20%. That’s a fraction of what Bloom needs. The USGS does not list Japan among countries where scandium resources have been identified.

That leaves DKK’s Chinese subsidiary as a more probable origin of the powder shipped from Japan.

In recent financial filings, DKK does not mention scandium specifically, but the company flags that for “medium-to-heavy rare earths, production is heavily concentrated in China, and the impact of export restrictions persists.”

A 2026 DKK-commissioned analyst report expressly flags that the company uses scandium oxide in “zirconia for fuel cells” and that the material is subject to Chinese export controls, suggesting once again that the company is sourcing it from China.

ROUTE 3: THROUGH BLOOM’S PARTNERS IN SOUTH KOREA

In 2024, Korean media reported a local success story. The company KV Materials had effectively localized the production of “electrolyte raw materials and powder” in Korea and would supply these products to Amosense, “a company specializing in materials and components,” to be turned into electrolyte substrates.

Subsequent industry coverage confirmed which trade partner Amosense was producing these components for: “Amosense will accelerate earnings growth by gradually expanding supply volumes following the shipment of the initial batch of solid oxide fuel cell (SOFC) ceramic substrates for Bloom Energy, which was prepared in the first week of March,” Daily Invest reported.

The shipments seem to be ultimately headed to the U.S. to be used for Bloom’s data center push, according to Korean news reports: “As Bloom Energy’s orders expand due to the surge in demand for AI data centers, Amosense’s ceramic substrate production capacity is also expected to expand more than threefold to approximately 50 billion won by the third quarter of this year,” Pinpoint News wrote.

Bloom’s ceramic electrolyte substrates contain scandium, according to its patents. But the USGS doesn’t list South Korea as a nation in which scandium resources have been identified, meaning the scandium baked into the Korean ceramic electrolyte substrates Bloom bought had to come from somewhere else.

The most likely place seems to be China. KV Materials, which provides the “electrolyte raw materials,” is actually owned by Vital Thin Film Materials, a Chinese scandium-products maker and part of Vital Group, corporate records show.

In January 2024, a Korean newspaper reported that Vital Group had shifted part of its fuel-cell business into the subsidiary with 20 billion won invested into the production. KV’s CEO pledged to make the company “a core hub of Vital Group.”

According to filings in Korea’s corporate disclosure database, KV Materials spent 127 billion won ($83 million) purchasing from its parent company, Vital’s Hong Kong subsidiary, in 2025.

If the scandium powder feeding Bloom traces back to a Chinese parent, then Bloom’s Korean operation would not take China out of the supply chain. It would transform the scandium and obscure its ultimate origin, turning Chinese-sourced scandium into a Korean electrolyte substrate before it reaches the United States.

Vital itself appears to be one of Bloom’s key suppliers. Its logo showed up on the same wall at Bloom’s May 2026 supplier conference as Hunan Oriental Scandium’s and Three Circle’s logos.

Bloom even seemed to have bestowed a special honor on the company: Vital apparently received the “Impact Supplier Award 2025.” The award is given to a supply partner who “significantly advanced our operational success, strengthened resilience and enabled scalable growth across the value chain,” according to a video Bloom posted on its LinkedIn page.

Vital’s North American subsidiary, Vital & FHR North America, has been a known Bloom supplier since 2023 — but the Chinese company’s apparent involvement in Korean electrolyte substrate production for Bloom has not been reported before.

THE TIES THAT BIND

Bloom’s scandium supply chain seemingly has at least four separate links to China: via Hunan Oriental, Japan, Korea, and Thailand.

And Chinese records show Bloom’s relationship with Chinese scandium suppliers goes back more than a decade, despite the CEO’s claims that Bloom has avoided the country since as early as 2005 and never had to “decouple” from China.

In May 2009, Bloom personnel visited China and Bloom signed a cooperation-intent contract with Hunan Rare Earth Technology Development Co. to jointly invest in a rare earth materials production line for Bloom’s fuel-cell division.

According to an April 2010 Chinese media report, Liu Jiaxiang, the director of the Hunan Rare Earth Metal Materials Research Institute, said that Bloom used the institute’s scandium for its fuel cell modules. “For the previous one or two decades, Bloom’s research had not been successful, but the positive electrode made with high-purity scandium oxide reduced the reaction temperature of the fuel cell by more than 200 degrees Celsius,” the article says.

In 2012, a Chinese recruitment notice described Taojiang Ruilong Metal New Materials Co., Ltd. as a joint venture between Hunan Rare Earth Metal Materials Research Institute and Bloom. The company’s business included crude scandium enrichment, high-purity scandium oxide production, and key fuel-cell materials.

And a 2013 Chinese industry-news article said a state research team led by the Beijing General Research Institute for Nonferrous Metals built a 20-ton-per-year high-purity scandium oxide line in cooperation with Bloom Energy.

Bloom acknowledged that its products rely “on a rare earth mineral” from suppliers “primarily located in Asia” several times in SEC filings between 2016 (pre-IPO draft registration statement) and 2019, before removing the mention altogether. The company also repeatedly flagged that it was sourcing from China before 2023 and then apparently dropped Chinese supply chain disclosures from its reports — before they reappeared in its quarterly filing for the third quarter of 2025.

At one point, Bloom appears to have tried to reduce its reliance on Chinese scandium by starting its own U.S. scandium extraction operation. According to an SEC filing ahead of its 2018 IPO, the company disclosed that “a subsidiary of the Company operated a scandium mining operation in the state of Montana pursuant to a lease.” That lease was terminated in April 2016. “The operation did not involve any actual mining, but rather entailed a physical treatment to upgrade the scandium concentration in tailings left on the mine’s surface from past mining operations not related to the Company,” Bloom states in the SEC filing.

‍Corporate records seem to indicate that this subsidiary was Rye Creek LLC, which reprocessed tailings from the Crystal Mountain in Darby, Montana. The company is still active, according to Montana’s corporate registry. It’s unclear why the Montana mining operation shut down, but this apparent attempt to build a domestic supply chain did not come to fruition.

It’s not just scandium-containing components that Bloom is sourcing from China: A Chinese sell-side analyst report from June also lists various other Chinese companies as Bloom suppliers, for goods ranging from electrolyte separator sheets to interconnects, magnetic components and temperature sensors. Trade data indicates that Bloom received shipments from a Chinese company as recently as Monday.

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This is not necessarily surprising. Almost every hardware company has China in its supply chain. But it’s strange considering one of Bloom’s key selling points — one its CEO highlighted in an interview with the Wall Street Journal last month — is that it does not rely on China.

SHOW ME THE SCANDIUM

The math explains why Bloom can’t escape China.

Between its founding in 2001 and 2024, Bloom had deployed a total of approximately 1.4 GW of fuel cells. By 2030, Wall Street is modeling the company scaling to production of up to 5 GW per year, driven by the AI boom.

That’s a big scale up.

How big?

Hunterbrook ran an extensive calculation of scandium supply and demand each year from 2025 through 2030. The deep dive included assessing every identifiable source of potential scandium production and consumption we could find worldwide. All calculation inputs directly cite government filings, Bloom patents, peer-reviewed academic literature, satellite imagery, company statements, and other independent sources.

The takeaway: Reliance on China isn’t even Bloom’s biggest problem. There won’t be enough scandium in the world — let alone outside of China — to meet Bloom’s needs across several years.

Here’s the math.

DEMAND

Bloom won’t say how much scandium it needs for its fuel cells. The public record is full of misinformation.

The Wikipedia page on the Bloom Box, for instance, claims the company requires just “130kg–150kg of scandium per GW,” a figure orders of magnitude lower than the public estimates reviewed by Hunterbrook. The number was added earlier this year by an anonymous editor with no source, and the page’s only scandium citation was flagged as an AI-generated reference.

Even employees have been kept in the dark, a former senior engineering manager told Hunterbrook. “They were very, very quiet about what they did, what they created, what they added,” they said about scandium. “There wasn’t really any understanding of what that was, where they were getting it from, what they needed to secure.”

So Hunterbrook built the number, measured in metric tons, from scratch, using two independent methods that converge.

METHOD 1: COUNT THE ATOMS

Bloom’s electrolyte is a ceramic material made from scandia-stabilized zirconia. In a solid oxide fuel cell, the electrolyte separates the anode and cathode and conducts oxygen ions; at the anode, those ions react with natural-gas-derived fuel in an electrochemical process that produces electricity without combustion.

The high operating temperatures of fuel cells mean that plain zirconium oxide won’t hold the right crystal structure as it cools: It cracks and loses conductivity. So you “stabilize” zirconia by mixing in another oxide. Bloom chose scandium oxide, which has superior properties to alternatives like yttria.

Bloom’s patents describe that mix at around 10 mol%.1 That means that out of every 100 oxide molecules in the ceramic, 10 are scandia and 90 are zirconia. Because a scandia molecule is a bit heavier than a zirconia molecule, 10 mol% works out to roughly 11% of the electrolyte by weight.

That’s the recipe. The next question is how much ceramic electrolyte each cell actually contains.

A 2021 Bloom technical deck put the company’s electrolyte at a 100-micron thickness, producing 25 watts per cell. Bloom repeated the same watt figure in a 2022 deck. Hunterbrook modeled each cell at roughly 100 square centimeters of active electrolyte area, nearly identical to the 99-square-centimeter active-area input in a Department of Energy stack-cost model which uses Bloom as a benchmark.

Run the geometry through the density of the ceramic, and each finished 100-kW stack has roughly 2.5 kilograms of scandium oxide baked inside it.

That’s roughly 25 tons per GW actually sealed into sellable products.2

But a factory has to buy more powder than ends up being used in finished cells.

A Bloom-authored white paper says each step from stack to column to power module has a “yield loss,” meaning some parts, which could contain scandium, don’t pass to the next build stage. Models tied to the U.S. Department of Energy put numbers around that: A mature-process case gets to roughly 85% yield3 and a downside case gets to roughly 65%.4 Hunterbrook modeled an 85% yield in the best case and 65% yield in the downside case, then used the midpoint for the central estimate.

At that rate, the scandium Bloom actually has to purchase climbs to roughly 3.0 to 3.9 kilograms per 100 kW, depending on the scenario.

That assumes Bloom has been honest about its stack life, which has been questioned in the past. And between its 2024 and 2025 Impact Reports, Bloom made its language regarding the life of its fuel cells much more conservative. In 2024, the company said: “We predict 2024 fleet medium time to refurbishment as 5 years.” In 2025, the company deleted that language, saying only: “As our fuel cells age, efficiency decreases, and replacements are made.”

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Bloom statements about product efficiency in its 2024 and 2025 Impact Reports (highlight added by Hunterbrook). Source: Bloom Energy

That’s one approach to modeling Bloom’s scandium need. Here’s a second.

METHOD 2: FOLLOW THE MARKET

We checked our bottom-up model answer against the market, from the top down.

That starts with the question: How much of the world’s scandium supply is consumed by solid-oxide fuel cells (SOFCs)?

Two industry reports put SOFCs at roughly two-thirds or more of total scandium oxide consumption.

Sunrise Energy Metals, in a 2026 feasibility study, estimated global demand for high-purity scandium oxide at 50 to 60 metric tons per year, with about 40 tons going into SOFC production. A 2025 Asian Metal interview with the general manager of Hunan Oriental Scandium reached almost the same fraction from the other direction: roughly 20 tons of SOFC demand out of about 30 tons of global scandium oxide use.

That does not all belong to Bloom, though the company holds by far the largest share in the industry. A February 2026 Soochow Securities report put Bloom’s SOFC market share at about 75%. That marks a small increase from Fortune Business Insights’ roughly 55% to 65% estimate for 2025 and a separate 2023 estimate of around 60%.

Hunterbrook used the more recent estimates: SOFCs at roughly two-thirds of the 60-ton global scandium demand, and Bloom at 75% of SOFC demand. Multiply them together, and Bloom alone accounts for about 50% of the world’s scandium oxide consumption. This may be conservative, as some of Bloom’s SOFC competitors, like the Asian giants licensing tech from Ceres Power (Doosan, Delta, Weichai), reportedly don’t rely on scandium.

That leaves another 50% — which, besides the other SOFC makers, is spread across aluminum-scandium alloys for aerospace, military, and automotive applications, as well as thin-film manufacturing for semiconductors and other specialty uses.

That means that Bloom plausibly consumed about 30 tons of global scandium oxide in 2025. What did 30 tons enable? According to analysts, Bloom deployed somewhere around 0.7 to 0.8 GW last year, once you count both new installations and the aging modules it swaps out in the field.5 That implies between about 37 and 43 tons of scandium oxide per GW, a very similar number to the bottom up approach.

Hunterbrook opted for the more conservative number: 37 tons per GW.

Wall Street’s models now assume Bloom deploys between 1 GW and 2 GW fuel cells in 2026 — the volume implied by the company’s raised revenue guidance of $3.4 to $3.8 billion — and scales toward 5 GW a year by 2030, the “manufacturing footprint” Bloom told investors it can already support on its April earnings call, with additional capex.

Analysts have chased the story upward: UBS raised its target to a street-high $350 after the Brookfield expansion, with RBC at $335, even as BMO warned the headline deals do not yet translate into firm contracted backlog.

That ramp is the valuation: At a recent price of $300 a share, Bloom commands a market value around $70 billion — more than 30 times sales and over 100 times forward earnings — and between 13 times and 20 times the billions of annual EBITDA that even a flawlessly executed 5-gigawatt ramp would generate based on sell-side models.

Assuming 5 GW of production in 2030, the company would need about 185 tons of scandium oxide a year — and once you count Bloom’s commitment to replace existing units under warranty (known as field replaceable units, or FRUs), its estimated demand climbs to roughly 220 tons by the end of the decade.

Add the rest of the market — other SOFC makers, aerospace and the aluminum-alloy crowd, et al — and total global demand runs from about 60 tons in 2025 to about 310 tons in 2030.6

That figure introduces some problems. Most importantly, supply.

SUPPLY

Supply does not keep up, even with the model bending certain assumptions in Bloom’s favor.

The model starts by assessing how much scandium is produced in the world now. For that, we counted every publicly available output figure from global suppliers we could find and got about 79.2 tons in 2025, roughly equivalent to the 80 ton figure calculated by the U.S. Geological Survey.

Then we added every announced scandium project and expansion we could find, on its own stated schedule, probability-weighting each one by how far along it actually is.78

Spurred by growing demand prospects from SOFC and auto industries, Western suppliers have signaled intentions to ramp up scandium production, though in reality most are still years from actually producing it. And even the Western supply that does come online may not be Bloom’s to buy — some of it is already optioned to a defense contractor, and at least one potential developer is chasing the auto market. It’s a market where more supply may mean more demand, and as more scandium comes online, more industries will want to adopt it.

In Australia, Sunrise Energy Metals’ project Syerston — designed for 60 tons a year — is only targeting a final investment decision in 2026, with first output around 2028. Lockheed Martin already holds an option on Sunrise’s first 15 tons a year to manufacture fighter jets. Sunrise’s stock has risen over 1,000% in the past year, driven by excitement around the opportunity to sell into the fuel cell supply chain.

And in the U.S., NioCorp’s Elk Creek project in Nebraska — whose primary focus is producing niobium but also plans to produce about 100 tons of scandium oxide a year — has begun pre-construction on a mine portal.

Formal groundbreaking awaits up to $800 million in debt financing the company has sought from the U.S. Export-Import Bank since early 2023. At an investor conference last month, NioCorp CEO Mark Smith said the company hopes to begin full construction by the end of 2026, with production of some products beginning in late 2029. He did not specify whether scandium would be among the first products produced.

But Washington’s interest in the project appears real. The Pentagon has committed up to $10 million in Defense Production Act funding to NioCorp and backs a joint scandium-alloy program with Lockheed’s Skunk Works.

Even in the best case, though, Elk Creek would not close the gap, especially as NioCorp’s stated focus for scandium is automobiles, namely aluminum-scandium alloys to lighten cars, not fuel cells. Peer-reviewed research has indicated that a major demand boost from the auto industry could put meaningful pressure on an already tight scandium market.

Assuming both Sunrise and NioCorp are likely to come online — with several other, more prospective projects less likely — global supply climbs from about 79 tons to about 240 in 2030.

Roughly 160 of that, about two-thirds, is Chinese. The remaining roughly 80 tons is spread across the rest of the world (after applying risk-adjustments to the production capacity of planned but unfinished Western projects). Under these assumptions, the global market enters a deficit. The gap widens every year, to more than 65 tons short in 2030.

Strip out China, and what’s left, the scandium a Western buyer could get its hands on outside the chokepoint, is not even close to enough. That’s why China reliance is necessary, even if not sufficient.

In the model’s expected case, uncommitted Western-deliverable supply covers about 12% of global demand in 2026 and falls to below 10% in 2027 and 2028 — the precise window of the Oracle ramp — before recovering to only about 20% by 2030.

The constraint doesn’t wait for 2030. It starts binding this year.

Some analysts are underwriting far more than the Street’s one-gigawatt base case for 2026 — SemiAnalysis reads Bloom’s raised guidance as implying 1.7 to 1.9 GW of shipments.9 Run a 2 GW year through the model, adding the replacement units Bloom’s aging fleet requires, and the company would need roughly 90 tons of scandium oxide in 2026 — more than one and a half times what the entire world consumed, for every purpose, in 2025.

Global supply does grow this year in the model’s expected case, to roughly 118 tons — but most of the growth, and roughly 86% of the modeled total production, is Chinese. After the rest of the market takes its share — Lockheed’s F-35 chain, aerospace alloys, competing fuel cell makers, about 35 tons in all — approximately 83 tons remain. To produce 2 GW, Bloom needs more than that, according to our model, pulling the global deficit forward from 2027 into 2026.

Others are more conservative. But the outcome isn’t all that different. Run the banks’ own deployment forecasts through the model — Morgan Stanley’s path to 4.7 GW in 2030, Jefferies’ to 5 — and, once the replacement units Bloom’s aging fleet requires are included (TD Cowen estimates about 300 megawatts of field replacements a year today, scaling toward 500), every published Wall Street deployment trajectory reviewed by Hunterbrook pushes the global scandium market into deficit by 2028, according to our estimates of consumption.

And one final consideration makes the picture even bleaker for Bloom.

Hunterbrook’s model includes every ton of scandium oxide supply, whether or not it is fuel-cell grade. But Bloom’s electrolyte does not appear to be made from generic scandium feedstock. Its 2012 offtake agreement with Metallica called for “high purity scandium oxide.” Sumitomo Metal Mining sells 99.9% pure scandium oxide for fuel cells to a customer that is likely Bloom.

The usable pool for Bloom could therefore be smaller than the headline supply number.

All of which is to say: Bloom’s claims of not having a single point of failure are mathematically unsupported. China is integral. And even with China, the math doesn’t work out.

“Right now in the Western world, there’s basically no scandium processing capability to speak of, or just very, very little,” John Mavrogenes, a professor of economic geology at the Australian National University, told Hunterbrook.” It would be a long road to say we’re gonna get serious about scandia.”

Bloom’s July 7 blog post espouses a somewhat different view — noting that scandium is more abundant than lead in the Earth’s crust, and that the amount needed for each cell is little more than “a sprinkle of salt.” But those observations say nothing about how much scandium Bloom actually needs, or can get, in the aggregate. And while the post acknowledges that the diffuse nature of scandium deposits makes mining it an “economics problem,” it implies that Bloom has solved this problem by figuring out that scandium “can be produced” from titanium and nickel waste streams around the world, which is widely known.

Yet again, Bloom says nothing about its actual scandium sourcing operations, nor does it acknowledge that the companies recovering and purifying scandium in this way at commercial scale today are overwhelmingly Chinese — including Bloom’s own suppliers. The flagship Western example, Rio Tinto’s Quebec operation, which recovers scandium from titanium processing exactly as Bloom’s post describes, produces about three tons a year — and the U.S. Defense Logistics Agency is already seeking to buy 6.4 tons from Rio over five years for the national defense stockpile.

And China’s grip on rare earth exports may grow even tighter later this year.

Every scandium shipment leaving China already requires a case-by-case export license under an April 2025 export-control regime that has never been paused, with only select exceptions. But a second, more sweeping set of controls — suspended as part of the Trump-Xi trade truce — snaps back into place automatically on November 10, 2026, unless the truce is extended.

Under Beijing’s “0.1% rule,” modeled on Washington’s own chip controls, any product made anywhere in the world containing Chinese-origin rare earths would itself need a Chinese export license to be sold onward. These rules would presumably reach Bloom’s waypoints in places like Thailand, Japan, and Korea directly.

President Trump left May’s Beijing summit without a rare earths deal, and the White House said only that China had agreed to address shortages of several rare earths, scandium among them.

Beijing doesn’t need a formal ban to act: April 2025 controls took effect, Chinese exports to the U.S. of yttrium — controlled under the same announcement as scandium — collapsed from 333 tons in the eight months before the block to 17 in the eight months through the end of 2025.

No announcement. Just licenses that never came.

THE FIRST OUT

That leaves one lever inside Bloom’s own control, assuming the company hasn’t secretly built a massive stockpile over the last two decades:10 Use less scandium per cell.

Bloom’s patents describe how this could potentially happen. Cheaper co-dopants to cut the scandia fraction. Thinner electrolytes to cut the volume. Push both hard enough and it could drag the market back toward balance early next decade.11

But there is no public evidence we could find that Bloom has reduced the scandium in its cells as of 2026.

And its own patent record argues it can’t easily, because Bloom itself identified under-doped scandia as a cause of accelerated fuel cell aging. Its patented remedy was more dopants, not less.12 Cutting scandium trades directly against stack life, on which Bloom’s 10-to-15-year service contracts and warranty economics depend.

Bloom’s own July 7 statement comes to a similar conclusion: The company says it “has developed other materials that can perform a similar role,” but that scandium “remains the best choice for our current fuel cell platform.”

Unless Bloom accelerates that transition away from scandium, or unless Western mines come online faster than their current schedules suggest, the shortfall leaves Bloom reliant on the same risky Chinese supply chain it repeatedly promised investors it does not depend on.

THE OTHER OUT: MANUFACTURED DEMAND — THE FINANCING MACHINE BEHIND BLOOM’S RECORD QUARTERS

There is one other scenario in which Bloom wouldn’t have a scandium problem: Maybe the 5 GW of demand never shows up — and maybe it’s not even close.

Evaluating this possibility starts with the question: Who is actually buying all the fuel cells that make up Bloom’s revenue and backlog today?

RING AROUND THE ROSIE

The answer, on Bloom’s own books, isn’t hyperscalers — at least not directly. Bloom’s new major sources of revenue are financing vehicles Bloom itself part-owns, which buy the equipment and deploy it in projects serving end customers.

In total, nearly half of Bloom’s 2025 revenue came from buyers Bloom helped create.

Of the $2.02 billion Bloom reported for the year, $892 million — 44% — came from related parties, according to the company’s 10-K. And $862.1 million of that came from the Brookfield “Fund JVs,” entities that did not exist until August of 2025. That is, in roughly five months, joint ventures that Bloom co-owns became the source of approximately 43% of its annual revenue.

In the fourth quarter of 2025, $574 million of Bloom’s $778 million in revenue came from related parties. In the first quarter of 2026, it was $373 million of $751 million.

The related parties include joint ventures formed in August 2025 with Brookfield, with names like Bolt US JVCo LLC and ORC HoldCo LLC. Bloom holds a 9.9% stake in one and 15% in another; Brookfield and its AI fund hold the rest. Bloom sells to these entities and can recognize product revenue when control of the equipment transfers, even when the counterparty is a financing affiliate rather than the ultimate user of the equipment.

Bloom’s own filing acknowledges that its “customers” may not be customers in the way investors assume. A footnote to the concentration-of-risk section states that in certain transactions the counterparty “may be a project-finance affiliate rather than the ultimate end user of the products.”

The filings show Bloom booking this revenue not just before deployment, but before it may even send a bill. A new line item appeared on Bloom’s balance sheet in 2025 — $62.3 million of “non-current” contract assets, revenue recognized where “billing milestones have not been reached” and invoicing sits more than a year out. The line didn’t exist in 2024; 78% of it is related-party.

It raises the question: Where do all the boxes go after the joint ventures buy them?

The answer isn’t clear.

In the eight months from when the deal was formed through March, during which Bloom booked more than $1.2 billion in related-party revenue, nearly all from sales to the Brookfield joint ventures, the partnership has not publicly named its end customers. The $5 billion announcement in 2025 specifically promised a European AI factory site “that will be announced before the end of the year.” It never was, at least not in a direct enough way for Hunterbrook to find — and the companies’ June 30 announcement of a $25 billion expansion nine months later makes no mention of the European site at all.

The closest thing to a named tenant is a company Brookfield created itself. In February, Brookfield launched Radiant, a “vertically integrated AI infrastructure company” formed by merging its in-house venture with a London startup, Ori Industries. Radiant describes itself as the “first compute deployment vehicle and second seed investment” of Brookfield’s AI Infrastructure Fund — the same fund whose first seed investment was the Bloom framework — and, per trade press reporting, it will get first dibs on capacity at the fund’s new sites.

Radiant has announced no chief executive — its leadership appears to be a Brookfield managing director serving as executive chair and the startup’s founder as president — and no publicly named customers.

What it has announced is what it will buy: Radiant is an “NVIDIA Cloud Partner“ whose AI factories will be “based on the NVIDIA DSX reference design“ and stocked with Nvidia’s latest chips. Nvidia, in turn, anchors the Brookfield fund.

The circle closes itself: Nvidia backs the fund; the fund’s vehicles buy Bloom’s fuel cells; the boxes await AI factories whose designated first tenant is Brookfield’s own cloud company; and that company exists to buy Nvidia hardware. At every point in the loop, the demand comes from inside the partnership.

But you might not know this was the end customer from listening to Bloom’s executives. Bloom hasn’t mentioned “Brookfield” since the first earnings call after the partnership was formed.

On the other hand: None of this is exactly concealed. It’s disclosed in footnotes. Deloitte flagged the JV accounting as a critical audit matter.

BACKLOGGED BACKLOG

Bloom, in any case, isn’t being valued primarily on any one customer.

It is being valued on the dream of behind-the-meter power. And, for investors, there are two numbers on a balance sheet where dreams generally come true: backlog and remaining performance obligations.

The weird part: In Bloom’s case, those two numbers diverge.

Bloom’s most recent quarterly filing put its RPO at $441.1 million for products and installation, plus $51.5 million for service, as of March 31, 2026.

Its backlog was an order of magnitude larger: $20 billion total, with $6 billion of the backlog attributable to product revenue specifically.

The mismatch is explained by Bloom’s own definitions. Under ASC 606, RPO captures one thing: the transaction price of binding contracts, for obligations not yet fulfilled.

Bloom’s 10-K defines its backlog, an unaudited number, far more expansively, as “revenue attributable to existing contractual commitments for the purchase or use of Energy Servers by a financier or an end customer,” a figure that “reflects anticipated ITC and other tax incentives as applicable.”

Read those clauses one at a time.

“Or use” means the backlog counts arrangements where no one has committed to buy anything, only to take power.

“A financier” means a commitment from a financing vehicle, like the Brookfield joint ventures Bloom part-owns, counts the same as an order from an actual customer.

And “anticipated ITC” means the backlog includes tax credits Bloom hopes to receive from the U.S. Treasury (money from the government), folded into a number marketed as customer demand.

The service side stretches further still: Bloom counts “5 to 20 years” of future maintenance revenue in its $14 billion service backlog while disclosing, in the same paragraph, that those contracts are “subject to termination for convenience on an annual basis.”

The audited service RPO, the portion that actually binds, is $25 million.

This is not how others in the industry do it.

GE Vernova’s 2025 earnings release shows a backlog of $150 billion and defines the term as “remaining performance obligation.”

‍Oracle, Microsoft, CoreWeave, and Baker Hughes all market the same number their auditors sign.

Quanta Services, which does fold estimates into its backlog, labels the figure “a non-GAAP financial measure” and reconciles it quarterly.

Across the peers Hunterbrook analyzed, the widest gap between a marketed backlog and audited obligations was about 2x. Bloom’s is above 40x. (Even just isolating the analysis to product revenue, and excluding servicing revenue, the gap is 14x.)

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And the quality of that backlog is unclear, as Bloom’s keystone projects appear to be delayed.

‍DECEPTION IN THE DESERT

In April, Bloom issued Oracle a warrant to buy 3.53 million Bloom shares at $113.28 apiece — roughly $400 million of stock, fully vested and immediately exercisable, on terms the companies had agreed to back in October 2025.

Four days later, Oracle announced it was expanding its partnership with Bloom to “up to” 2.8 gigawatts — only 1.2 GW of it actually contracted.

Bloom’s stock soared. So, too, did the value of Oracle’s warrants. A win-win.

Weeks later, Oracle made another announcement that boosted Bloom’s stock price: The hyperscaler said that a single New Mexico data center campus — Project Jupiter, intended to house infrastructure for OpenAI — would run on up to 2.45 GW of Bloom cells.

Whether Jupiter gets built in the next couple years is itself an open question.

The 17.77-mile gas pipeline required to feed the facility is stuck, as research firm SemiAnalysis reported. And Oracle recently told regulators: “Without a reliable source of natural gas, the power plant that will generate electricity for the data center campus cannot function.” That’s because Bloom’s fuel cells need methane at the campus.

Due to regulatory delays for Oracle’s gas pipeline, SemiAnalysis already pushed its base case for first power from 2027 to 2029. Hunterbrook interviews with four New Mexico officials and a group suing to stymie Oracle indicate it could be delayed into the 2030s, or canceled altogether.

The New Mexico Environment Department (NMED) spokesperson told Hunterbrook it decided on Thursday that Oracle must face opposition at a public hearing. Oracle’s goal: getting a key air permit for emissions from Bloom’s fuel cells.

NMED decided to hold the hearing after public comments were contaminated. Local news reported Oracle’s canvassers collected names and contacts from residents, then submitted supportive comments using their identities, even if the person opposed data centers. Locals found out from an automated NMED email thanking them for input. An Oracle spokesperson denied wrongdoing to local news.

Agency spokesperson Drew Goretzka called it “unprecedented” in an interview with Hunterbrook. He said that NMED “may be pursuing civil or criminal prosecution.” Deputy Cabinet Secretary John Rhoderick at the air permit regulator concluded, “They’re trying to pad the bet with more positive comments.” Without the permit, Oracle cannot install fuel cells, according to the interviews. Bloom’s cells are its sole source of power.

Secrecy is how Jupiter arrived in the desert. The project began with mysterious LLCs that hid their real ownership behind misleading names — Green Chile, after the state’s pepper, and Acoma, after a Pueblo tribe that made the LLC stop using its name due to no relationship.

Only after the New Mexico Environmental Law Center (NMELC) filed lawsuits did the LLCs reveal they were Oracle, building one of the world’s largest data centers for OpenAI.

And Bloom only became part of the project after Oracle withdrew its earlier permit application, which involved even more emissions.

Kacey Hovden, an attorney at NMELC, told Hunterbrook that Oracle’s application is “incredibly incomplete” and “wildly underestimated” emissions from Bloom’s fuel cells, a claim supported by the emissions reports from Bloom’s troubled Wyoming data center, which contradict the New Mexico data.

“Bloom Energy has a really messy past, and I think that they’ve been trying to push this product for seems like decades, without really anyone biting. And I think the data center industry propped them up at just the right time, because it seemed like they were about to go under,” she said. “It’s not this clean energy solution that they claim it to be.”

The backlash now runs throughout the local government. The New Mexico Foundation for Open Government sued over Oracle-related emails. A state legislative aide pointed Hunterbrook to a bill that senators will file next session to block new data centers statewide. The county commission chair Manuel Sanchez laughed when Hunterbrook asked how the outcry compares to past issues. “There’s no contest, this has had by far the most public outcry,” he said, citing residents’ alarm over emissions, water, and the disposal of “hazardous waste.” Hovden specified “benzene and formaldehyde,” and said, “Bloom has a history in California actually of dumping that waste into just local landfills, which then of course impacts folks’ soil quality, water quality, and everything in between.”

Hovden estimated that first power is now likely “early-to-mid 2030s.” Reuters reported last week that Blackstone’s QTS terminated a Virginia data center after “years of local opposition and litigation.” Hovden’s conclusion about Jupiter: It may not happen at all.

‍WYOMING

The prospects for Bloom’s other flagship project seem to be worsening too.

The timeline of the apparent anchor of AEP’s $2.65 billion fuel-cell investment, a plant near Cheyenne, Wyoming, slipped from “no later than 12/31/2028” in AEP’s February investor deck to “no later than 2030” in its May deck, a potential delay of up to two years in under 90 days.

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The data center campus that plant would power reportedly lost its developer in June, when Crusoe was pushed out after the prospective anchor customer — allegedly Google, which has reportedly signed nothing — raised concerns about costs and timelines.

AEP’s CFO disclosed the mechanics on the May earnings call: If the offtake conditions failed by the end of June, the “hyperscaler” customer would get six months to find the equipment another home “anywhere in the U.S.”

If that extension fails, AEP has indicated the utility could force the hyperscaler to pay it back at roughly 110% of “all capital and costs incurred” on the fuel cells.

Whether this would force Bloom to slash its product backlog, nearly 40% of which can be traced to the AEP deal, according to a recent note from analysts at Jefferies, is less clear.

Asked whether AEP would take delivery of fuel cells before its end-customer contracts were final, Sridhar told analysts that Bloom’s servers are “not perishable” and can be redeployed. On the next quarter’s call, he referred to the fuel cells as “portable and fungible.” That is, Sridhar is claiming the boxes can be delivered regardless of whether the specific project moves forward.

“Can,” however, doesn’t mean “will.”

Asked whether it would take delivery of the fuel cells, or instead have its hyperscaler customer reimburse incurred costs at 110%, AEP directed Hunterbrook to the public statements it has already made — including the updated earnings deck.

This is not the first time AEP has run a similar route with Bloom. In the fourth quarter of 2024, AEP agreed to procure up to 1 gigawatt of Bloom’s fuel cells. The first 100 megawatts weren’t bought by AEP’s utility, or by any end customer. They were bought by AEP Development Services, or “Devco” — a subsidiary financed entirely by the parent company’s internal money pool, created to buy the fuel cells and resell them to AEP’s Ohio utility once each installation is “mechanically complete.”

By December 31, 2024, within weeks of the order, Devco’s construction-work-in-progress stood at $457 million, per AEP’s own 10-K. A year later: $480 million. Just $23 million of progress in 12 months.

And the demand the boxes were bought ahead of never really showed up. The end customers were supposed to come through an Ohio program that let AEP sell customer-sited fuel-cell power to data centers. According to the 10-K, that program yielded signed customer contracts for 98 megawatts — about a tenth of the gigawatt AEP contemplated buying. Then the program effectively stalled: Ohio House Bill 15, signed in May 2025, repealed the statute it ran on, “grandfathered the two existing PUCO approved contracts” and barring new ones.

However many Bloom boxes AEP procures, Ohio’s demand under this program is now seemingly frozen at the 98 megawatts already signed.

Even that remnant is contested: In September 2025, according to AEP’s 10-K, an intervenor challenged the approval before the Supreme Court of Ohio, “claiming that the order was unlawful, anti-competitive, and discriminatory.”

That is the pattern, captured in audited numbers on both sides of a single transaction, a year before the Brookfield vehicles existed. Bloom can book revenue, immediately; the buyer can park the equipment in a financing entity; and the demand the purchase was meant to serve is a question for later.

Wyoming is the same architecture at a larger scale. This time AEP’s CEO says the company is doing “a little bit of earthwork” on the site and “waiting for the full release,” indicating it hasn’t frontloaded the entire payment.

‍BIG BUZZ, FEW DEPLOYMENTS

To sum it all up: The two flagship destinations — Project Jupiter and Cheyenne — are delayed, apparently until at least 2029 and 2030. The Brookfield vehicles that accounted for half to three-quarters of recent revenue have not named a site. And Bloom’s existing deployments are relatively insubstantial.

One data-center fleet Bloom can verifiably point to belongs to Equinix, the world’s largest data-center colocation provider. The partnership began in 2015 as a one-megawatt pilot at a single Silicon Valley facility. A decade later, Bloom’s February 2025 announcement celebrating the milestone put the tally at roughly 75 megawatts operating across 19 Equinix data centers in six states, with 30 more under construction. But in its own chief commercial officer’s words, the fuel cells are “supplementing grid power,” not replacing it. That’s a very different use case than the story driving Bloom’s AI boom.

There is also an alleged 14-megawatt CoreWeave site in Illinois whose commissioning, slated for the third quarter of 2025, Hunterbrook hasn’t been able to confirm; and a Nebius deal that Hunterbrook’s OSINT traced to a New Jersey site where the neocloud seems to buy the power, not the fuel cells, meaning the undisclosed equipment owner is potentially a Brookfield vehicle.

Satellite imagery of the CoreWeave and Nebius sites shows both appear to be making slower progress than initially planned. At Nebius’ New Jersey facility, between 30 and 39.6 MW of generation capacity is installed, according to Hunterbrook estimates — roughly 9% to 12% of the 328 MW deployment that Nebius and Bloom announced on May 20, 2026, which the companies said was “expected to be operational this year“. At CoreWeave’s facility in Volo, Illinois, Hunterbrook estimates roughly 1.6-2.8 MW of installed Bloom generators. Though Bloom has never disclosed the planned fuel cell capacity at Volo, even when measured against the building’s 14 MW power capacity, the installed base amounts to no more than a fifth.13

‍

Bloom also was included in a Texas air permit application for 248 MW of power for a data center in Pawnee, which was approved in June.

The upshot: If the 5 GW ramp is real, the scandium constraint binds, and Beijing holds the off-switch. But it’s unclear there is really as much demand for Bloom’s fuel cells as investors seem to think.

After all, the big headlines for Bloom are often reflective of the same deals at different stages of development — such that a $25 billion “framework,” a $20 billion “backlog,” and billions in “revenue” are not necessarily three independent proofs of demand.

To varying degrees, they can be the same boxes at three stages of one pipeline — financed by a fund using LP money, sold to affiliates ahead of end customers, meant to power data centers that in many cases do not yet exist.

‍DO YOU HAVE DÉJÀ VU?

Yogi Berra said it best: It’s déjà vu all over again.

In October 2021, Bloom announced that Korea’s SK ecoplant — which ultimately took a roughly 10% equity stake in Bloom and became a related party — had committed to purchase “a minimum of 500 megawatts” of power through 2024, which amounted to an estimated $4.5 billion in equipment and service revenue.

The committed volumes propped up Bloom’s 2022-2023 results. Then Korea’s procurement policies shifted and deliveries stalled. Bloom’s fourth-quarter 2023 revenue fell 23%. And that December, the companies re-announced a “500 MW sales agreement” in which — by the press release’s own arithmetic — roughly half was undelivered volume from the 2021 commitment, just re-signed with three extra years to comply.

SK ceased to be a related party on July 10, 2025, and sold the last of its stake on April 13, 2026.

Brookfield’s financing framework with Bloom was conveniently formed within weeks of SK ceasing to be a related party.

Even the earlier Bloom business model ran through a captive buyer.

In 2011, in exchange for Bloom’s pledge of 900 factory jobs, Delaware lawmakers authorized a surcharge on every Delmarva Power bill.

The surcharge obligated the utility’s roughly 300,000 ratepayers to buy the output of 30 MW of Bloom boxes through 2033. It was pitched to the public as a “small fee” averaging about 67 cents a month. Within two years, it was running closer to $5 or $6. In a single year ending May 2019, state records reviewed by Forbes show ratepayers paid $34 million for the Bloom units’ electricity — power that, when Delmarva resold it into the regional grid, fetched just $9 million. The $25 million difference was that year’s subsidy.

The jobs came up 600 short. Bloom delivered 302 and returned more than $1.5 million under the deal’s clawback provision. But the surcharge remains on Delaware bills today, with seven years left to run.

The counterparties change — a state, a Korean conglomerate, a fund — but the structure doesn’t: Someone other than an end user guarantees Bloom’s numbers, on terms that look better at the announcement than in the accounting.

The people who sign those numbers keep changing too. Four different people have held Bloom’s top finance job since the start of 2024 — and five since 2020.

‍

Former CFO Randy Furr retired effective March 30, 2020, seven weeks after Bloom announced its financial statements could no longer be relied upon after the report by Hindenburg Research.

Former CFO Greg Cameron departed in April 2024.

His successor, former CFO Dan Berenbaum, lasted 12 months.

For the year that followed — the year the Brookfield joint ventures were formed and related-party revenue reached 74% of a quarter — Bloom had no permanent CFO at all: Its chief accounting officer, Maciej Kurzymski, served as acting principal financial officer.

The most recent CFO hire, Simon Edwards, arrived April 13, 2026 from Groq — where, per Bloom’s own 8-K, he had been CFO for only three months and then CEO for just three months.

Bloom’s CEO, by contrast, has never changed. Sridhar has run Bloom for 25 years.

AUTHOR

Till Daldrup is an investigative journalist who joined Hunterbrook from The Wall Street Journal, where he focused on open-source investigations and content verification. In 2023, he was part of a team of reporters who won a Gerald Loeb Award for an investigation that revealed how Russia is stealing grain from occupied parts of Ukraine. He has an M.A. in Journalism from New York University and a B.S. in Social Sciences from University of Cologne. He’s also an alum of the Cologne School of Journalism (Kölner Journalistenschule).

Dhruv Patel is an investigative journalist based in Cambridge, Massachusetts, specializing in data-driven reporting. He helps spearhead investigative coverage at The Harvard Crimson, and his reporting has been cited and discussed by The New York Times, CNN, The Boston Globe, ABC News, and BBC, where he also frequently contributes commentary. A John Harvard Scholar at Harvard College, he studies computer science and economics to leverage machine learning for accountability journalism.

Jean Wang is a machine learning engineer and data scientist at Hunterbrook Media. Previously, Jean worked on the alternative credit and fixed income desk at Magnetar Capital, studied Math at Yale University, and served as an editor for the Yale Daily News.

Blake Spendley joined Hunterbrook from the Center for Naval Analyses (CNA), where he led investigations as a Research Specialist for the Marine Corps and US Navy. He built and owns the leading open-source intelligence (OSINT) account on X/Twitter, called @OSINTTechnical (over 1 million followers), which also distributes Hunterbrook Media reporting. His OSINT research has been published in Bloomberg, the Wall Street Journal, and The Economist, among other top business outlets. He has a B.A. in Political Science from USC.

Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. He helped build Fenway Strategies into one of the preeminent strategic communications firms in the country—with side quests speechwriting for Michael Bloomberg, running the surrogate remarks operation on the Biden-Harris campaign, and co-founding Mayday, which is now one of the leading information providers on how to access reproductive health care in states with bans. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets — and occasionally volunteers on a fire speech for a good cause. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life.

EDITOR

Vikas Kumar joined Hunterbrook from The Capitol Forum, where he led the corporate investigations team for a decade as a senior editor. He was previously an attorney at Gordon Feinblatt, a trial attorney for the Department of Justice, and a law clerk for a federal judge. He has a J.D. from University of Virginia School of Law and a bachelor’s from Emory University. Vikas is based in Maryland.

Michelle Cera, Jenny Ahn, Nathaniel Horwitz, and Ceci Moffit contributed reporting.

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Hunterbrook Media publishes investigative and global reporting — with no ads or paywalls. When articles do not include Material Non-Public Information (MNPI), or “insider info,” they may be provided to our affiliate Hunterbrook Capital, an investment firm which may take financial positions based on our reporting. Subscribe here. Learn more here.

Please contact ideas@hntrbrk.com to share ideas, talent@hntrbrk.com for work opportunities, and press@hntrbrk.com for media inquiries.

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By: Michelle Cera, Laura Wadsten

Editor: Sam Koppelman

Based on Hunterbrook Media’s reporting, Hunterbrook Capital is short $ENSG and long a basket of comparable securities at the time of publication. Positions may change at any time. This article is not investment advice or a recommendation to buy, sell, or hold any security. Hunterbrook Media is collaborating with organizations like law firms including Hunterbrook Law to pursue reform based on this reporting. See full disclosures on our website.

Ensign caregivers and residents have reached out to Hunterbrook Media since we published our June 8 article. Their accounts corroborated our findings — and added new, firsthand evidence of resident hunger, payroll falsification, understaffing, and staff licensing issues. Ensign has not issued a public response to our reporting, even as the company quietly attempted to reassure Wall Street.

The Ensign Group ($ENSG) won’t respond to Hunterbrook Media’s reporting.

The company has not replied to repeated emails or phone calls. It didn’t respond to Bloomberg News, either. And it did not engage when Hunterbrook sent a billboard truck to its headquarters, instead sending security after the driver.

But since we published our investigation into America’s largest chain of nursing homes, staff who have worked at Ensign’s facilities have flooded Hunterbrook’s inbox with harrowing accounts of conditions inside those facilities. The company, meanwhile, has expanded its stock repurchase authorization to $100 million.

One certified nursing assistant (CNA) claimed their facility — where they had worked for a decade — was stripped of resources when Ensign took over. They even claimed to have won a company award for cutting its food budget as residents went hungry.

The alleged award isn’t on display, the CNA said: “It’s not something to be proud of.”

The kitchen is allegedly kept locked, so staff find ways to sneak in for food. The CNA said they once drove to a nearby Sonic, on their own time and their own dime, to buy a hungry resident a hamburger. The CNA makes $16.75 an hour.

That CNA wasn’t alone.

The accounts that reached Hunterbrook after our investigation into Ensign came from Texas, Arizona, California, and Tennessee. Most sources spoke on condition of anonymity, fearing retaliation. Their stories corroborate our reporting and add firsthand detail of the often grim reality inside Ensign facilities.

Asked what had changed the most since Ensign took over, the CNA from Tennessee answered: “The dignity of our residents.”

Weight Loss, Hunger

The award, the locked kitchen, the Sonic run — and there was more.

The same CNA in Tennessee told Hunterbrook about the food residents do get served. “They’re getting like half-cup-sized portions,” they said. “Like if you were on a weight loss diet.”

Federal law requires nursing facilities to provide each resident with a well-balanced diet that meets his or her specific dietary needs. Yet research still finds malnutrition and food deprivation across the industry.

A separate CNA at an Ensign facility in California recounted similar nutritional shortcomings. Though some residents had conditions with specific dietary needs, like diabetes or hypertension, they said, everyone was served the same thing.

“I don’t think it’s adequate,” the CNA told Hunterbrook about the food served to residents. “It’s not healthy at all.”

And because the floor is so short-staffed, the CNA said, residents with dementia who can’t feed themselves are simply left unfed. “Then the patients end up losing weight, and they just go downhill.”

Shortages and Locked Supply Closets

Hunger is one symptom of a broader refusal to spend on necessities.

Three people who worked for Ensign described severe shortages of even the cheapest supplies. A former licensed practical nurse (LPN) wrote in about a constant lack of basic materials for patients who were often in “very acute” need, with “numerous wounds.”

In Tennessee, a CNA said it went beyond shortages: Essentials were rationed and locked in closets only management could open. Staff bought soap and deodorant out of their own pockets to preserve some basic dignity for residents.

In California, another CNA described the same locked closets. “For the first year or more we didn’t have access to bottles of soap,” the CNA said. “They’re trying to save money or something.”

Staff, allegedly, weren’t given the alcohol pads needed to clean catheter drainage tubes, the California CNA said — so “people just empty it … and then just close it up again.”

This could lead to urinary tract infections, according to the CNA. “That could kill them.”

Inflating Nursing Hours

The shortages weren’t the only thing being hidden.

Independently of each other, both Tennessee employees described a scheme to make the facility look better staffed than it was: Nonclinical workers logged as floor CNAs.

Hours for people employed in office, housekeeping, and dietary roles were recorded as CNA hours, an employee explained — inflating the facility’s reported nursing time so that, in their words, “they don’t have to staff more CNAs for that shift.”

The LPN flagged the same alleged practice — “the use of CNA credentials for staffing purposes while employees were primarily working in non-direct care roles.”

The CNA also described a repeated situation where their hours were misreported: inserting lunch breaks they never took, and inflating their hours, including one shift logged as 19 hours. “I know I didn’t work 19 hours,” they told Hunterbrook.

They raised it with HR, which claimed it was a mistake. Within weeks, they said, another shift showed up documented as 19 hours.

Misclassifying staff hours to inflate the facility’s reported nursing hours would also inflate the facility’s CMS 5-star ratings for staffing and overall — as Hunterbrook found was the case in our initial investigation.

The Tennessee CNA described how this plays out in real life.

In keeping with Hunterbrook’s finding that registered nurse hours fall after Ensign acquires a facility, this CNA estimated the building now has a single RN for 67 patients.

Sometimes, they said, staff need help transferring a patient out of bed, but there are no extra hands.

“These people are wanting their showers. It’s impossible.”

An LPN who worked at an Ensign facility in Texas said there often weren’t even enough CNAs to take patients to the bathroom.

“I care deeply about the residents and have watched conditions deteriorate despite raising concerns internally,” they said in an email.

Practicing Above Their License

Understaffing doesn’t just shortchange residents — it pushes the problem onto employees with the lowest certification levels and pay scale.

When the schedule comes up short, our investigation found, Ensign fills the gap not by hiring, but by leaning on overworked, under-credentialed staff. That leaves frontline workers an impossible choice: Jeopardize their license to keep residents safe, or stop at what they’re legally allowed to do and watch patients go without care.

The Tennessee CNA described RN coverage simply vanishing from a shift: “If that person didn’t have an RN title and wanted that shift, then they would probably just throw another LPN in down there,” they said. “There just wouldn’t be an RN on shift.”

The LPN in Texas lived the consequences of this staffing model — left, as a new LPN, responsible for some of the sickest patients in the building without adequate support. “I was too ignorant at the time to realize my license was in jeopardy the longer I worked at this facility,” they told Hunterbrook in an email.

The California CNA recalled months when the floor had at most one RN — and the only RN providing hands-on care was the assistant director of nursing. Otherwise, LPNs staffed the floor alone. LPNs in California are not licensed to independently perform critical tasks such as ventilator management or administering IVs.

It is the definition of a moral quandary — staff forced, shift after shift, to choose between their professional code and the residents in front of them. Ensign has built a workforce of people who, in the Tennessee CNA’s words, “put 110% into their residents’ care” while quietly absorbing the legal and ethical risk of a staffing model designed to spend as little as possible on care.

The Texas LPN told Hunterbrook that their experience at Ensign made them stop working at skilled nursing facilities altogether. “I loved my patients and wanted nothing but the best for them,” they said in an email, “but it was so hard on the soul to see the neglect.”

While Ensign has not replied to repeated requests for comment from Hunterbrook Media and other news outlets, the company has quietly spoken with Wall Street.

Sell-side analysts at RBC Capital Markets and UBS Securities published notes reassuring investors — after conversations with Ensign management. The company also spoke directly with hedge funds invested in $ENSG.

Ensign’s staff, patients, and families of patients are still waiting for answers.

If you or a loved one has been affected, or if you have any relevant information to share, please reach out at ideas@hntrbrk.com. This is part two of a series on Ensign and the industry.

Authors

Michelle Cera trained as a sociologist specializing in digital ethnography and pedagogy. She completed her PhD in Sociology at New York University, building on her Bachelor of Arts degree with Highest Honors from the University of California, Berkeley. She has also served as a Workshop Coordinator at NYU’s Anthropology and Sociology Departments, fostering interdisciplinary collaboration and innovative research methodologies.

Laura Wadsten is an investigative journalist specializing in healthcare. She began her career reporting on antitrust and health care markets as a Correspondent for The Capitol Forum, a premium subscription financial publication. Previously, she was Executive Director of the nonprofit Moving to Value Alliance, where she produced the MTVA Unscripted Podcast. Laura was a Hodson Scholar and Editor-in-Chief of The News-Letter at Johns Hopkins University, where she earned a B.A. in Medicine, Science & the Humanities.

Editor

Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. He helped build Fenway Strategies into one of the preeminent strategic communications firms in the country. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets — and occasionally volunteers on a fire speech for a good cause. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life.

Graphic

Dan DeLorenzo is a creative director with 25 years reporting news through visuals. Since first joining a newsroom graphics department in 2001, he has built teams at Bloomberg News, Bridgewater Associates, and the United Nations, and published groundbreaking visual journalism at The Wall Street Journal, Associated Press, The New York Times, and Business Insider. A passion for the craft has landed him at the helm of newsroom teams, on the ground in humanitarian emergencies, and at the epicenter of the world’s largest hedge fund. He runs DGFX Studio, a creative agency serving top organizations in media, finance, and civil society with data visualization, cartography, and strategic visual intelligence. He moonlights as a professional sailor working toward a USCG captain’s license and is a certified Pilates instructor.

Hunterbrook Media publishes investigative and global reporting — with no ads or paywalls. When articles do not include Material Non-Public Information (MNPI), or “insider info,” they may be provided to our affiliate Hunterbrook Capital, an investment firm which may take financial positions based on our reporting. Subscribe here. Learn more here.

Please contact ideas@hntrbrk.com to share ideas, talent@hntrbrk.com for work opportunities, and press@hntrbrk.com for media inquiries.

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Based on Hunterbrook Media’s reporting, Hunterbrook Capital is short $ENSG and long a basket of comparable securities at the time of publication. Positions may change at any time. This article is not investment advice or a recommendation to buy, sell, or hold any security. Hunterbrook Media is collaborating with organizations like law firms including Hunterbrook Law to pursue reform based on this reporting. See full disclosures on our website.

By: Michelle Cera, Andrew Ford, Laura Wadsten

Editor: Jim Impoco, Sam Koppelman

They beat the walls.

Cheryle Weir couldn’t breathe, her roommate recalled. Dependent on ventilators at an Ensign facility, they couldn’t talk. They couldn’t scream.

So they banged on the table, banged on the wall, desperate for anyone to hear. A nurse should have been there. No one was.

Eventually, Cheryle stopped banging.

Her family’s lawsuit blames her death on The Ensign Group ($ENSG).

Ensign is America’s largest operator of “skilled nursing facilities” (SNFs) — facilities designed to rehabilitate people who need less than hospital care, but more care than they can provide themselves.1

Ensign boasts about its star ratings, “industry-leading” clinical outcomes, and “strong history of quickly improving the quality of care in the facilities we acquire.” A sell-side analyst referred to Ensign’s quality star ratings as part of its “secret sauce.” And Ensign says it sets “the standard by which all others in our industry are measured.”

But a five-month Hunterbrook investigation found that standard is tragically low — and fatal.

The investigation revealed Ensign’s $10 billion empire is built on a dubious foundation: Its profits are heavily dependent on understaffing facilities. It performs better than average on self-reported quality metrics but worse on independently verifiable measures. It regularly violates state minimum staffing laws, and routes taxpayer dollars to its executives and to its own affiliates. Meanwhile, Ensign patients suffer and sometimes die.

“We could’ve had so much more time,” Weir’s daughter, Hanneka White, told Hunterbrook in an interview. “And it was taken away.”

Hunterbrook Media’s reporting team — led by three journalists, as well as former financial analysts from Goldman Sachs and Magnetar Capital — examined millions of Center for Medicare & Medicaid Services (CMS) datapoints, reviewed thousands of pages of documents, and interviewed dozens of sources, including: attorneys, professors, healthcare professionals, ombudsmen, data analysts, and public advocates, as well as former employees of Ensign, residents of Ensign facilities, and family members of Ensign residents.

Here’s the story:

• Ensign’s profits can be traced to providing less care than its patients need — and less care than it is meant to provide based on the tax dollars it receives from the government. Government programs pay skilled nursing facilities based on “acuity level,” a measurement of how sick the residents are. Ensign says it’s focusing on high-acuity people in order to increase its revenue, the bulk of which comes from government programs. But then it staffs many facilities below the levels needed to provide the care those payment rates are calibrated to support. Using the formula from a 2025 peer-reviewed study, Hunterbrook calculated a 5 million-hour gap between hours of nursing care needed and hours actually provided at Ensign facilities between July and November 2024, the period for which robust data is available. “The difference between those two numbers is fraud,” opined Ernest Tosh, an attorney who litigates nursing home abuse and neglect cases. Hunterbrook estimates that closing that staffing gap would have cost Ensign about $161 million during the period studied — or roughly $386 million annualized. That’s more than the company’s entire reported net income that year of $298 million. Hunterbrook also found that the more a facility profited from understaffing, the worse its health survey scores, facility-reported incidents, complaint deficiencies, total penalties, staff turnover, and staffing ratings.

• The Ensign Effect. We found Ensign’s growth strategy is to buy struggling nursing homes — then cut staff at those facilities and bank the savings, all while claiming quality improves. Ensign has rapidly built its $10 billion empire by rolling up distressed nursing homes, claiming to transform them into “market leaders in clinical quality.” But after Ensign acquires a facility, we found, nursing hours fall. Hunterbrook tracked 161 facilities before and after Ensign acquisition against roughly 15,000 other nursing facilities, controlling for industry trends. Bottom line: The quality of the facilities gets worse, not better, after Ensign acquires them.

• Federal and state laws prohibit understaffing. Federal law requires every Medicare- and Medicaid-funded nursing facility to keep “sufficient nursing staff” to meet each resident’s needs. The sicker the resident, the more staffing the law generally demands. Yet Hunterbrook found no consistent relationship between how sick Ensign’s residents are and how many hours it staffs. Four states where Ensign operates impose numeric floors on the care that must be provided: California, Washington, Tennessee, and Kansas. Our analysis of CMS records from 2020 through 2025 found Ensign facilities falling below the legal floors in those states on more than 18,000 days cumulatively. “You have to staff to meet the needs of residents, and that consistently does not happen,” said Ed Dudensing, an elder-abuse attorney, describing insufficient staffing. “That’s illegal.”

• Ensign’s superior “star” ratings are largely built on an honor system the company appears to be gaming. The CEO emphasized Ensign facilities “outperformed industry peers in 5-Star Quality Measure results” in a recent press release. He also highlighted “the highest quality clinical outcomes” in an earnings call last year. What he didn’t mention is that those measures are largely self-reported. We sorted CMS Provider Information performance metrics into three tiers: independently verified by unannounced government inspectors; self-reported but auditable via payroll records; or self-assessed and self-reported with no imposed documentation procedures. The result: Ensign performs worse when there is external verification.

• Ensign paid more than $339 million to its own affiliates in 2024. That’s about 8% of $ENSG revenue that year. The maneuver is known as tunneling. Our cost-report analysis shows Ensign facilities pay hundreds of millions of dollars a year to entities also owned or controlled by Ensign. Think: Landlords. Insurance. Transportation. “Home office” management fees. Hunterbrook found that, across the industry, more money going to related parties correlates with fewer staffing hours, more staff turnover, and lower health inspection scores, among other metrics. A 2024 congressional letter to Ensign’s then-executive chairman identified the industry practice as a “deceptive tactic” to hide profit. In an interview, Tosh, the attorney, shared his opinion of nursing homes tunneling money to related parties without any effective oversight: “It’s just a huge menagerie of corporations to hide the money movement. In effect it’s money laundering.”

• Former employees in different states described systematic misrepresentations. Fabricated Google reviews; document falsification; falls downgraded to “slips;” improperly upcoded patient acuity; and retaliation against staff who refused to engage in these activities. Former employees also told Hunterbrook they were compelled to provide unnecessary care and exaggerate its duration. One former Ensign therapist described higher-ups encouraging higher billing via falsifying minutes of therapy: “The 30 would be erased and somebody would put in a 70.”

• An industry lobbying group waged a multi-front campaign to kill a federal government rule meant to stop understaffing. In February of 2026, the Trump Administration rescinded a Biden-era rule setting a federal staffing minimum for nursing facilities, after the American Health Care Association (AHCA), an industry group, sued the government. Ensign and other operators backed a pro-Trump super PAC and Ensign gave $750,000 to MAGA Inc before the rule was rescinded. The now-defunct rule was estimated to save 13,000 lives a year.

• Behind all the numbers, patients suffer and die. Thomas Scates died after an Ensign facility neglected him, according to his family. Herbert Howenstein died after a large pressure ulcer developed at an Ensign nursing home. Six inches long, an inch deep, blackened dead flesh, penetrating to muscle. An EMT report shows that facility staff were aware but nobody was treating him for it. An expert reviewing his death concluded, “The patient’s demise was almost merciful.” A nonverbal resident with Alzheimer’s was found covered in ants with bites all over her body — an infestation discovered by her family, not the staff, according to an investigation report. Cheryle Weir died after begging for help that did not come in time, her daughter told Hunterbrook. These are just some of the stories Hunterbrook heard, which represent a fraction of the devastation in Ensign facilities around the country.

• Ensign did not respond to multiple detailed requests for comment from Hunterbrook. Ensign CEO Barry Port did, however, tell The Arizona Republic in 2023 that staffing is decided by individual facility management, and the suggestion that his company siphons money to boost profit is “categorically false.” Other statements by the company seem to contradict that supposed distance between Ensign and its individual facilities. In a recent earnings call, for example, Port cited access to patient-level data and involvement in facility-level decisions. The most recent 10-K also suggested there was visibility over individual facilities: Ensign said they use specialized software to help caregivers “more accurately” capture services to “increase reimbursement,” and that the company had “installed software and touch-screen interface systems in each operation.”

To see our full methodology, click here.

If you or a loved one has been affected, or if you have any relevant information to share, please reach out at ideas@hntrbrk.com. This is part one of a series on Ensign and the industry.

“They’re The Model”

Most of us will require institutional care in our lifetime. We hope that care will be high quality.

Faced with an aging population and widespread nursing shortages, every American nursing facility must contend with infections, falls, and sometimes death. On an average day, a facility might smell like human waste cut with cleaning products. Easy listening music covers the croaking sounds of uncomfortable residents. Frontline staff do their best at difficult and low-paying jobs, in facilities lit fluorescently and decorated in liminal beige.

But Ensign has established something worse: a business model that seems to depend on eroding care for America’s sick and elderly.

Our investigation shows the company boomed in recent years by rolling up distressed homes, cutting high-skilled nursing staff, and gaming metrics.

“They’re the model,” said David Kingsley, a retired professor at the Kansas University Medical Center who researches corporations that depend on revenue from Medicare and Medicaid.

Ensign operates the most CMS-certified nursing facilities in America, with 334 locations across 17 states.2 They offer more than 38,000 skilled nursing beds, according to a March filing.

But these facilities have problems — and they seem to get worse after Ensign takes over. Conditions at several of its facilities are so severe that they are candidates on CMS’s “Special Focus Facility” list, a roundup of facilities with a pattern of serious problems that pose risks to resident health and safety. Facilities on the SFF list are at risk of being terminated from Medicare or Medicaid programs.

And Ensign is coming for more. In the second quarter so far, it has announced purchases of 17 facilities in Texas, two in Wisconsin, and one each in Iowa and California (real estate only).

Ensign’s model is working. It grew rapidly after its current CEO took the helm in 2019. His $13.8 million in compensation last year — at a company whose revenue is largely derived from public funds — was mostly tied to company performance.

And Ensign does not limit incentive-based compensation to its senior executives. Our investigation found that some individual facility administrators are compensated the same way, creating powerful incentives to cut costs. While it’s normal to have financial performance incentives for cutting costs, it’s different when the incentive is to cut nursing hours — the results can be a matter of life and death.

For example, a lawsuit deposition shows the company tied a facility administrator’s bonus directly to location profits, and by staffing below recommended levels, that administrator was able to boost a roughly $400,000 annual bonus to more than $800,000.

As a result of understaffing at that very same facility, the lawsuit claims, a resident died, his final moments captured on a recorded phone call provided to Hunterbrook.

One source, a forensic accountant, likened the industry to the Sackler family’s opioid profiteering.

The Multimillion-Dollar Staffing Gap

To mask the sounds of screaming and crying, Doni Hunt Webb plays loud music.

“I know this is neglect and abuse,” she said.

She has lived in an Ensign facility in Utah for more than five years.

“I am a broken person now,” she told Hunterbrook, her voice sounding heavy. “I watch many people in here get broken.”

She described the daily reality of an Ensign facility, which she said was understaffed: persistent hygiene and medical failures.

Hunt Webb said she suffers from extreme nerve damage, a condition she said does not get adequate treatment due to persistent understaffing, turnover, and a lack of training.

At times, staff use wet paper towels in place of toilet paper, Hunt Webb said. She and other residents get recurring infections, she said, recalling that another patient cried and screamed after going a day without food, without being changed, left in a soaking wheelchair.

“The lack of staffing is the number one thing that affects residents’ quality of life,” the deputy state ombudsman in Texas, Alexa Schoeman, told Hunterbrook.

Dozens of studies show this is true.

Public money flows to Ensign and other skilled nursing operators based on the needs of their residents. But many simply don’t staff accordingly.

Each nursing facility funded by Medicare, Medicaid, or both is bound by federal law to have “sufficient nursing staff” to meet the needs of each resident, also referred to as patient “acuity.” The higher the acuity, the more staffing the law generally demands.

And Ensign residents tend to have higher needs than most.

That’s by design, former Ensign employees told Hunterbrook. “They were seeking out people with more complex needs,” said one former therapist. Administrators would deliberately “find the most complex diagnosis of that patient for the highest payback.”

Ensign’s own financial filings indicate their patients are “often high-acuity” and that their “business model is based in part on serving higher acuity patients.” As acuity goes up, so too should hours of care, according to federal law. But Hunterbrook’s analysis found no consistent relationship at Ensign.

CMS commissioned research to time how long it takes to care for residents at different acuity levels. It used this research to set Medicare payment rates, and it informed a federal rule requiring a minimum of 3.48 hours per resident day (HPRD) that was finalized but never put in force before industry lobbying and lawsuits helped convince the Trump administration to rescind it.3

Last year, researchers used those findings to help facilities understand how many nursing hours they need to meet their residents’ acuity — putting a number on the “sufficiency” standard enshrined in federal and state law.

Hunterbrook used this formula and worked with two of the researchers who developed it — Charlene Harrington, professor emerita of UCSF, and Robert McLaughlin, a healthcare data analyst — to calculate the expected number of hours Ensign residents should receive based on the acuity level they report to CMS. Harrington is a leading scholar of nursing home policy, who has spent decades researching the staffing levels needed to ensure safe, quality care.

Next, we calculated the difference between the hours of care patients should receive, based on reported acuity, and the number of hours Ensign actually paid nursing staff to work, according to Ensign’s own filings with the government. In other words, we calculated the gap between what Medicare paid Ensign to provide care and how much Ensign actually spent on nursing staff to deliver that care.

“The difference between those two numbers is fraud,” elder care attorney Tosh said about this gap across the industry.

In 2025, the California Attorney General used a similar technique in a complaint against the nursing home chain Sweetwater. In that case, California analyzed the same CMS database that Hunterbrook used here to allege that the chain systematically failed to meet resident care needs.

Our analysis found Ensign residents were shorted more than 5 million hours in just five months of 2024 — that’s more than 570 years of missing nursing time. The analysis is restricted to this time period due to data availability.

We next sought to translate those hours into dollars, again using Ensign’s own reports on its costs of staffing. We found that Ensign saved about $161 million during those five months by declining to staff its homes adequately. If the trend held across 2024, that’s about $386 million annually in savings on staffing costs, representing profit to the company. For context: That year, Ensign’s entire net income was $298 million.

Across all nursing facilities in CMS data, the profit from understaffing adds up to roughly $6.5 billion across the industry, just from July to November 2024.

Ensign ranks worse than peers: The spread is generally larger at Ensign facilities than the industry norm, according to Hunterbrook’s analysis.

“I think this work breaks ground and is really important because it puts a dollar figure on a staffing question that has been debated for decades,” said McLaughlin, one of the authors of the formula we used in this analysis, who reviewed our work and validated our methodology.

Even these eye-popping figures are likely understated because nursing home operators can inflate the care hours they report to CMS and manipulate their cost reports, according to experts Hunterbrook interviewed.4

With federal rules in flux, some states where Ensign operates have their own minimum staffing laws. A separate Hunterbrook analysis of CMS records suggests Ensign consistently violates the minimum hours-per-resident-day requirements of: California (3.5-hour) , Kansas (1.85-hour), Tennessee (2-hour), and Washington (3.4-hour).5

From 2020 through 2025, in these four states cumulatively, Ensign facilities fell below state minimums on more than 18,000 days.

These minimums represent the lowest staffing level the laws permit.

Ensign regularly fails to meet even that, despite serving residents who are sicker, on average, than those at peer facilities.

When asked directly about our findings regarding the staffing gap and failures to meet minimum staffing levels, Ensign didn’t refute them or offer additional data. The company didn’t respond at all.

There has been some conflicting research on the exact right level — a controversial 2023 study commissioned by CMS declined to recommend a specific minimum HPRD, finding, “no obvious plateau at which quality and safety are maximized.” But there’s good reason for these minimums. That 2023 study still found higher staffing was associated with fewer hospitalizations and emergency room visits.

Understaffing hurts people.

In July 2025, a CMS report shows, a nonverbal resident at an Ensign facility with Alzheimer’s disease was found in her bed covered in ants.

They crawled on her face, neck, legs, and swollen-shut eyes. They left bites all over her body.

Her family said they discovered the infestation — not the staff.

We found a clear pattern across the industry: As spending on staffing decreased, quality metrics deteriorated significantly, including health survey scores, facility-reported incidents, complaint deficiencies, total penalties, staff turnover, and staffing ratings.

“Customer Second”

Ensign trumpets the acronym CAPLICO across its internal communications, where the first “C” stands for “customer second.” As they explain in the 2026 Code of Conduct, “This means we put our employees first so that they are empowered and inspired to provide the best possible care to our residents/patients.”

A noble thought, perhaps. Yet in interview after interview with Hunterbrook, former employees recounted stories that contradicted Ensign’s purported commitment to its workers.

Robert Love told Hunterbrook that he’d worked as a cook at a Tennessee nursing facility for nine years before Ensign took over. After the sale went through in early 2025, he said, Ensign cut staff.

“You can’t have that mentality in a nursing home setting,” he said of the “customer second” motto. “We have to take care of them.”

Love fed residents grappling with Alzheimer’s disease and dementia. “And to take away resources from that is, I don’t even think that’s bad management. I think that’s just evil greed.”

After Ensign took over, Love said he became one of only two cooks serving roughly 90 residents, his pay was cut, and his hours were slashed. “That’s when I had to go look somewhere else,” he said.

The reduction in pay and hours led Love to take another job cooking fast food at a local gas station, where he made $5 more per hour than his wage at Ensign.

At an Ensign facility in San Antonio, the staffing shortfall was so severe that sometimes nurses would cook for residents, according to a former therapist.

A former physical therapy director for Ensign in Costa Mesa, California, said they were regularly told Ensign could not afford the cost of care.

“We don’t have the means to pay you more, so here, have a pizza party,” they recalled. “It’s kind of become a meme or a joke at this point.”

The data also undermines Ensign’s claimed commitment to its staff. Our analysis showed that when it takes over a facility, Ensign almost invariably cuts staff hours and shifts what hours remain from more skilled, higher paid caregivers to less skilled, cheaper ones.

Again, when asked about these findings, Ensign did not respond to repeated requests.

Staffing levels are not just words on a page or numbers on a spreadsheet — they have real, and sometimes fatal, consequences for Ensign residents.

In 2022, a resident at Ensign’s Clarion Wellness in Iowa was found suspended upside down between a bed rail and headboard, “completely purple and black,” a staff member recalled.

The resident had suffocated.

The facility had installed a grab bar on the resident’s bed without assessing the risk of entrapment, obtaining consent, or evaluating the risks for the resident who had a history of falls, according to findings from Iowa’s State Survey Agency.

Staff didn’t check on the safety of the mattress and bed rails, but a facility maintenance supervisor admitted he marked them as complete anyway. The surveyors also found no evidence that visual wellness checks of the resident were completed.

Iowa regulators condemned the Ensign facility as strongly as they could: They proposed a one-time $10,000 fine.

The same year, Ensign collected more than $8 million in revenue per day.

Self-Reported Metrics Versus Reality: What Happens When No One Is Looking

Over and over, Ensign and its executives swear that they care about patients.

“Our consistent financial results would not be possible without a relentless, patient-focused culture that strives to deliver the highest quality clinical outcomes,” the CEO said in an earnings call last year.

As evidence, the company often cites CMS Star Ratings on quality metrics. For example, in its first-quarter 2026 earnings press release, Ensign’s CEO, Port, touted that facilities “outperformed industry peers in 5-Star Quality Measure results by 24% nationally and 20% at the state level.”

The catch: These ratings are largely based on the honor system, meaning they are self-reported. CMS “does not impose specific documentation procedures on nursing homes,” for most of these metrics, relying instead on expectations of “good clinical practice.”

While higher ratings don’t necessarily mean better quality care, they are likely to matter a lot to an ailing patient or their stressed loved one looking for a nursing facility. The government itself points patients to a website comparing the star ratings of different facilities in order to “compare nursing homes for quality.”

When Hunterbrook first started looking at Ensign’s operations in 2024, there was no obvious reason to doubt Ensign’s quality of care, which appeared high based on its star ratings.

It was only later that we realized that, to a large extent, the quality metrics Ensign likes to cite are largely self-reported and self-assessed.

So, relying on performance metrics documented in CMS Provider Information data for Ensign’s facilities from January 2020 to March 2026, we took a closer look.6

Hunterbrook dove into performance metrics documented in CMS Provider Information data for Ensign’s facilities from January 2020 to March 2026. We separated the various available metrics into three tiers: Tier 1 — Independently verified by state survey agencies contracted by CMS who show up unannounced7; Tier 2 — Self-reported but based on verifiable payroll records and auditable by CMS8; and Tier 3 — Self-assessed and self-reported with no specific documentation procedures.9

We found Ensign outperforms on the metrics the company controls, and underperforms on many of the metrics it has less influence over.

Compared to the national average on Tier 3 ratings, Ensign performed 22% better on the overall quality measure rating, 24% better on long-stays, and 16% better on short-stays — metrics that exist on the honor system. These numbers are unsurprising, given the statistically significant correlation between improved star ratings and profit, documented by multiple studies, and accounts of multiple former employees who said the company underreported adverse events.

The picture looks a lot less rosy for Ensign on Tier 1 and Tier 2 metrics.

On Tier 2 (self-reported but auditable) metrics like registered nurse hours per resident day, Ensign was about 17% worse than the national average. Their staffing rating was 11% worse. And on facility-reported incidents, Ensign performed 38% worse.

Ensign also performed worse on many independently measured metrics (Tier 1): 20% worse on the number of complaint health deficiencies and more than 7% worse on infection control inspections.

Our conclusion: Ensign inflates its grades on metrics it controls, while a truer picture emerges when there is some level of independent verification.

For example, Park Village Healthcare and Rehabilitation in DeSoto, Texas, has five stars on Tier 3 quality measures on the CMS website — a rating that might lead a family or potential resident to think the nursing home is high quality.

The same facility’s one-star (“much below average”) ratings for independently verifiable metrics like health inspections and staffing tell a very different story.

Once more, Ensign did not respond to our questions about its apparent manipulation of the quality rating system.

Misleading ratings can have consequences.

At an Ensign facility in California, a patient had both legs amputated after staff ignored her doctor’s orders to isolate her during chemotherapy, her husband told Hunterbrook. He said the facility placed her in a crowded room next to a resident with pneumonia, and let an infection spiral into sepsis.

The patient’s husband mentioned that they chose the nursing home after reading online reviews and seeing good ratings.

Multiple former employees across different Ensign facilities confirmed for Hunterbrook that ratings were an important internal focus for the company. They described everything from management compelling them to write fake Google reviews to retaliation against employees for not properly manipulating metrics.

“Everything was done on paper,” a former therapist who worked for Ensign told Hunterbrook. A form would go from the facility to building management, who ended up “falsifying before sending it.”

Elizabeth Schlamann, a former certified medical aide for an Ensign nursing facility in Nebraska, told Hunterbrook that corporate directives to their staff were clear: Manipulate the resident assessments that inform star ratings.

“They would literally hold it against us as like a punishment,” Schlamann said, noting that if metrics such as falls and bed sores weren’t manipulated in the way corporate administration wanted them to be, promised perks were withheld.

Staff were also “heavily urged or encouraged” to engage in upcoding, according to Schlamann, a practice where residents are coded as more medically complex than they actually are to increase reimbursement from the government.

Twice when it was scrutinized by regulators, Ensign paid settlements topping $40 million to conclude claims it ripped off the government by billing Medicare for unnecessary treatment and for allegedly paying illegal kickbacks for patient referrals.10

A former speech language pathologist remembered receiving an exit survey before leaving the Ensign nursing home they worked at. The survey asked them if they had seen any unethical behavior or fraud, and promised a follow up call within 24 to 48 hours. They checked yes.

“I didn’t get a phone call,” they said.

The Ensign Effect: Sicker Residents, Fewer Hours of Care

Ensign is known for its aggressive acquisition strategy.

In financial filings, the company attributes much of its historical growth to acquiring SNFs. Ensign’s 2025 10-K claims a “strong history of quickly improving the quality of care in the facilities we acquire.” They point to “consistent improvement” in star ratings post-acquisition as evidence.

In reality, does the quality of care improve in the facilities Ensign acquires?

The data answers with a resounding “No.”

In fact, the analysis revealed what we’re calling “The Ensign Effect.”

When Ensign acquires a facility, the acuity — a measure of how sick residents are — stays higher than the national average, while care provided by higher-skilled registered nurses drops sharply, and total nursing hours go down noticeably too.

“The regulation is that you have to staff to meet the needs of the residents, and that consistently does not happen,” said Ed Dudensing, an elder abuse attorney for 23 years. ”That’s illegal.”

We used 72 months of CMS Provider Information records spanning January 2020 to March 2026 and tracked 161 facilities before and after Ensign acquired them, verified by CMS Change of Ownership records.

We then compared the changes at Ensign facilities to what was happening nationally at roughly 15,000 other facilities over the same time periods, using a technique called difference-in-differences that helps sift the Ensign Effect from broader industry trends.

The result? After Ensign takes over, total nursing hours fall at a statistically significant rate, and continue to fall over time.

The Ensign Effect is especially visible among their higher-paid and most highly skilled employees.

Before acquisition, the registered nurse hours of the facilities hover around the national average. After, a steady decline sets in and widens over the following years.

The drop in RN hours also leads to a change in the overall staffing mix.

An increased share of care hours are provided by Certified Nursing Assistants (CNAs) and Licensed Practical Nurses (LPNs), who are less highly trained than RNs and generally cannot provide complex medical assessments or treatments independently.

And yet, while overall nursing care hours and the share of those hours being provided by the most highly skilled professionals is dropping precipitously, somehow Ensign’s overall star ratings consistently improve at facilities it acquires.

How can that be?

Overall ratings — featured prominently on CMS’s Care Compare site where families shop for nursing homes — are built by starting with the health inspection score and then adding up to one star each for staffing and quality measures, including self-reported numbers. Under this methodology, self-reported data can lift a facility’s overall rating by as many as two stars: a 2-star health inspection can become a 4-star overall, and a 3-star can become a 5-star.

Staffing cuts and pushing work onto lower-skilled employees can have serious consequences, according to our sources.

Dominique Haynes, a former CNA at an Ensign facility in Texas, mentioned uncertified staff providing care.

“I constantly saw residents passing away,” she said, referring to the result of dialysis procedures performed by staff she thought were unqualified to do so.

Haynes also described chronic supply shortages. Each morning, she said she went “Easter egg hunting” for scarce supplies. She hoarded wet wipes. Catheters went unchanged, and residents were regularly left sitting in urine.

“They’re scared that they won’t be changed, or that they’re not going to get water, or they’re not going to be taken care of,” Haynes said.

Ensign’s staffing cuts might make sense if the overall patient population at facilities acquired by Ensign also had lower acuity over time. But because the government pays more for higher acuity populations, Ensign actually seeks to acquire facilities where patients are sicker than the national average, Hunterbrook found. Ensign says as much in their public communications, highlighting the sicker-than-average populations in their facilities and telling shareholders that while these struggling nursing homes might negatively affect margins at first, they typically contribute “to earnings within 12 to 18 months.”

The numbers suggest Ensign accomplishes this primarily by cutting down on the staff tasked with the survival of some of the nation’s sickest and most vulnerable people.

But it’s more than just numbers. Reverend Michael Southcombe routinely visited the Pine Crest nursing home in Merrill, Wisconsin. Then he learned the county-owned facility was slated to sell to Ensign. He grew worried about the quality of care under a corporate newcomer.

Driven by a zeal for justice, he became a leader of the grassroots group People for Pine Crest, protesting its sale.

They took their fight to county board meetings, with a self-described “five foot nothing, crippled little old lady,” in fierce opposition.

They got crushed.

The sale went through in 2025, and a group member told a local newspaper that 15 to 20 positions had already been eliminated, employees had their pay cut, and others lost hours.

Nurses are now stretched thin, response time has bloated, and staff that survived the cuts are working harder but getting paid less, Southcombe told Hunterbrook.

“The only way these companies make money is to not provide the care that they’re being paid to provide,” Southcombe said.

Some residents have loved ones who can care for them in the absence of Ensign staff, he added.

“I worry about the ones who are laying there in bed at some end stage of dementia who don’t have family coming to visit them,” Southcombe said.

“Who puts the straw in their mouth when they’re thirsty?”

A Poverty Myth

For years, patient advocates have pointed to understaffing as the single biggest driver of bad clinical outcomes at nursing facilities, and have pushed for regulatory reform in this area. The industry’s main lobbying group aggressively fights any movement toward mandated levels of staffing by claiming they would cause financial ruin.

That group, the American Health Care Association (AHCA), most recently took aim at a federal staffing requirement published in May 2024. It would have required all nursing facilities certified by CMS to provide a minimum of 3.48 nursing hours per resident per day, a level estimated to save 13,000 lives per year. AHCA filed a federal lawsuit the same month, claiming (among other things) that a majority of nursing homes have “negative operating margins” and that the rule would “force them to close their doors for good.”

The AHCA features a rotating cast of characters — and deep ties to Ensign. Ensign’s CEO Barry Port sits on the board of the AHCA, and a former president and CEO of the AHCA, Mark Parkinson, is now on Ensign’s board of directors.

In a 2025 earnings call, Port shared that he had also met with Congressional leadership regarding the staffing minimum. He said it was “to make sure they’re fully educated and understanding of what’s good for funding.”

Around then, Ensign and other major nursing home operators also contributed to a super PAC devoted to President Trump, according to a New York Times report.

And a Federal Election Commission filing showing contributions to MAGA Inc. confirms Ensign donated $750,000 to the president’s super PAC on August 8, 2025.

Continuing their full court press, industry representatives met with the president for lunch at his golf club in the summer of 2025, the Times article said.

By December 2025, the staffing rule was gone.11

Of course, the poverty narrative the industry relied on for its lobbying win is at least somewhat contradicted by the company’s own public statements when talking to another audience: Wall Street.

While AHCA was claiming financial hardship in court filings, Ensign’s CEO was trumpeting “record” and “extraordinary” growth in earnings calls in 2024.

“This plea of poverty when the CEOs are flying around on their private jets is a little hard to bear,” said geriatrician and director of the National Center on Elder Abuse, Dr. Laura Mosqueda.

How Public Funds Become Private Profit

How can Ensign report individual facilities struggling to make ends meet and massive profits at the corporate level?

One answer: A financial arrangement known as “tunneling.”

Here’s how it works: Ensign’s facilities pay separate companies that Ensign also owns or controls for functions like real estate, insurance, and administrative services. Many of these services are necessary to operate the business and each facility would have to pay someone for them. But experts told Hunterbrook that nursing home operators regularly charge themselves excessive, above-market rates when their own affiliates are involved — draining money that could go to staffing while making the facilities appear too financially strapped to provide adequate care.

For the executives at the top, this system works out rather well. Ensign’s CEO took home over $13 million in compensation in 2025. The CFO, almost $12 million. And more than $9 million went to the COO.

More than two-thirds of nursing home profits are tunneled to related parties, a study revised last year found. Another study based on data from 2019 found $1.95 billion in excessive related-party payments across the industry.

“The government is forking over billions of dollars to take care of older and disabled adults,” said Tony Chicotel, an attorney for California Advocates for Nursing Home Reform. “The owners are taking that money and spending the very minimum they can on care.”

A congressional letter sent in 2024 directly to Ensign’s executive chairman at the time, Christopher Christensen, cites these related-party schemes as a “deceptive tactic” the nursing home industry uses to hide profit.

Ensign facilities tunneled about $339 million in total to related parties in 2024, which made up about 8% of the company’s consolidated revenue that year, Hunterbrook found. That’s larger than Ensign’s net income, according to a 2024 financial filing, precisely what the congressional letter warned about.

And this figure is likely understated, given improper reporting to CMS.

“It’s just a huge menagerie of corporations to hide the money movement,” said Tosh. “In effect, it’s money laundering.”

The government prohibits excessive charges, but even when unreasonable costs are caught, CMS doesn’t claw back the money.

And as with understaffing, the data show a consistent pattern: The more nursing facilities pay related parties, the worse their outcomes across some measured dimensions — nurse hours, staffing ratings, turnover, and health inspection scores.

“If we weren’t funding all of this extra expense that comes out of the buildings to all these third parties,” a former Ensign administrator said, “then we would be able to operate and give very, very amazing care to these residents.”

Ensign did not respond to Hunterbrook’s repeated questions regarding its related party transactions.

Riverbend Post Acute Rehabilitation illustrates the dark side of this model.

The 131-bed Ensign nursing home in Kansas City, Kansas, was scarlet-lettered as a “special focus facility” by CMS, meaning it’s among the worst-performing and at risk of losing public funding

Riverbend is so bad, CMS doesn’t acknowledge it with a rating, but with a warning.

The Ensign facility has been the subject of multiple federal complaint investigations and health inspections. Riverbend was cited for “immediate jeopardy” — the most severe level — after a 2024 investigation found inadequate care led to a maggot infestation inside a resident’s body.

The facility has the money to care for its patients, Hunterbrook found, bringing in nearly $18 million in patient revenue in 2024. But the facility tunnels a massive portion of the money to other Ensign affiliates.

“How do you explain having that much revenue,” Kingsley said, “and yet they can’t take care of a special focus facility?”

Here’s how: In just one year, this nursing home reported more than $2 million in related-party transactions in its cost report to CMS.

Riverbend, meanwhile, has technically lost money in three of the last five years with available data. On paper, it’s barely staying afloat.

But this picture is misleading. Riverbend’s losses are a fraction of the $2 million it sent to Ensign. And this is the crux of the related-party scheme: make the nursing home appear poor on paper while the parent organization extracts its revenue.

In another example of prioritizing profit over care, Riverbend’s cost report shows it relies heavily on lower-cost certified nursing assistants (CNAs) over more expensive and skilled registered nurses.

The theme of replacing more skilled, higher paid workers with lower-skill, lower-cost workers came up twice in interviews with former employees.

A former therapist who worked for Ensign told Hunterbrook they were fired because their position meant they had to be paid more than others.

One former Ensign administrator in training, responsible for tracking expenses, confirmed the pursuit of lower-skilled labor.

“If we can get it cheaper from somewhere else, let’s get it cheaper,” they said, describing their view of Ensign’s mentality. “It doesn’t matter the quality.”

“There’s No Excuse for Killing People”

The dollars on Ensign’s balance sheet are abstractions. But behind them are real people who have been neglected, suffer, and sometimes die in Ensign facilities.

Take the story of Thomas Scates.

Air Force veteran, truck driver, firebrand minister. He thundered in church as he did in cheering his grandson on in football: “I’ll fly away,” he cried from the pulpit, “I’ll fly away.”

When his body started failing, he put his faith in an Ensign nursing facility. Ensign let him fall.

Overburdened nurses didn’t give him enough attention, his daughter, Sharon Thompson, told Hunterbrook. One misdosed his insulin, she said. Then he tumbled out of bed and called for help, but no one came.

“I don’t know how long he was on the floor before somebody showed up,” Thompson recalled.

Ensign staff just put him back in bed, Thompson said. The Scates family filed a lawsuit, later dismissed on technical grounds rather than the merits of the case, claiming he died because Ensign’s facility in Peoria, Arizona neglected him.

“They did not take him to the hospital,” Thompson added. “They did not call a paramedic.”

The family’s complaint claimed Scates’ injuries were preventable, yet the facility was chronically understaffed and undertrained in an effort to maximize profit.

Scates’ experience seems to reflect patterns Hunterbrook found across Ensign’s facilities. Our analysis concluded that Ensign has turned the suffering and neglect of the nation’s most vulnerable into a lucrative business model: seeking out medically complex residents to extract as much revenue as possible, siphoning hundreds of millions of dollars to Ensign’s own affiliates, pocketing vast sums by staffing below the level their residents need, and showcasing self-reported quality metrics to investors and the public.

The ethical conclusion is simple in the eyes of a professor widely known for her research and advocacy in this area, Charlene Harrington.

“When you have a multibillion-dollar corporation,” Harrington said, “There’s no excuse for killing people.”

If you or a loved one has been affected, or if you have any relevant information to share, please reach out at ideas@hntrbrk.com. This is part one of a series on Ensign and the industry.

Authors

Michelle Cera trained as a sociologist specializing in digital ethnography and pedagogy. She completed her PhD in Sociology at New York University, building on her Bachelor of Arts degree with Highest Honors from the University of California, Berkeley. She has also served as a Workshop Coordinator at NYU’s Anthropology and Sociology Departments, fostering interdisciplinary collaboration and innovative research methodologies.

Andrew Ford is an investigative journalist who exposed systemic flaws and prompted reforms in healthcare, business, policing and state government. His reporting was published by ProPublica, USA Today, The Arizona Republic, Asbury Park Press, and Florida Today. He holds a journalism bachelor’s from the University of Florida and received a data analytics master’s from Georgia Institute of Technology. He taught data journalism to investigative journalism master’s students at the Walter Cronkite School of Journalism and Mass Communication at Arizona State University. Andrew is based in Phoenix, Arizona.

Laura Wadsten is an investigative journalist specializing in healthcare. She began her career reporting on antitrust and health care markets as a Correspondent for The Capitol Forum, a premium subscription financial publication. Previously, she was Executive Director of the nonprofit Moving to Value Alliance, where she produced the MTVA Unscripted Podcast. Laura was a Hodson Scholar and Editor-in-Chief of The News-Letter at Johns Hopkins University, where she earned a B.A. in Medicine, Science & the Humanities.

Editors

Jim Impoco is the award-winning former editor-in-chief of Newsweek who returned the publication to print in 2014. Before that, he was executive editor at Thomson Reuters Digital, Sunday Business Editor at The New York Times, and Assistant Managing Editor at Fortune. Jim, who started his journalism career as a Tokyo-based reporter for The Associated Press and U.S. News & World Report, has a Master’s in Chinese and Japanese History from the University of California at Berkeley.

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