In a recent court filing, Citibank disclosed that it has been instructed by the FBI, the Environmental Protection Agency (EPA), the EPA’s inspector general, and the Treasury Department to freeze the accounts of several non-profit organizations and state government agencies.

Although the accounts were initially frozen in February, the newly released documents have made publicly available previously unknown details, including a comprehensive list of non-profits currently under FBI scrutiny, which can be found in the latest court filings.

The funds in question were allocated as part of the $27 billion Greenhouse Gas Reduction Fund, established by the Inflation Reduction Act, a law enacted by Congress in 2022. The EPA received $14 billion for a National Clean Investment Fund, which provides grants to green banks, as reported by TechCrunch.

These green banks utilize the funds to finance clean technology projects across the country. Startups with commercially viable technologies were eligible to receive financing to bring their projects to fruition.

The primary purpose of the funding was to provide loans, which were expected to be repaid and reused for future lending. Green banks typically have delinquency rates comparable to those of commercial and residential portfolios held by other commercial lenders.

Citibank was appointed as the financial agent to manage the funds, holding them in accounts under the names of the awardees. The bank is also administering a separate $6 billion Clean Communities Investment Accelerator program. The EPA’s contract with Citibank was publicly announced in April 2024.

The FBI has requested that Citibank impose 30-day administrative freezes on accounts held by non-profits that received green bank funding. Additionally, the bank has been asked to freeze accounts belonging to other non-profits and state government agencies, including Habitat for Humanity, United Way, the Colorado Clean Energy Fund, and the New York State Department of Taxation and Finance.

Three non-profits that received green bank funds have filed a lawsuit against Citibank, seeking the release of the funds in their accounts.

EPA Administrator Lee Zeldin has expressed concerns that the Greenhouse Gas Reduction Fund does not align with the agency’s priorities, citing potential fraud, although he has not provided evidence to support this claim.

During a hearing on Wednesday, a judge in the U.S. District Court for the District of Columbia questioned a Justice Department attorney representing the EPA, as reported by Politico.

Judge Tanya Chutkan asked, “Can you provide any evidence that the grant was illegal or that there was abuse, fraud, or bribery – anything that was improperly or unlawfully done, aside from the fact that Mr. Zeldin disagrees with it?”

Judge Chutkan also ordered the Justice Department to provide the court with details regarding the alleged fraud, stating, “I don’t have the credible evidence that’s required.”

Update 3/13/25: This article has been updated to include details from the Wednesday hearing.