A Federal court in Dallas, TX is playing host to a lawsuit against US Virgin Islands-based power company Glacial Energy, which claims the company has secretly funneled $20 million of revenue from electricity customers into ‘blood diamond’ mining operations in Africa.

Glacial Energy is a retail electric provider, offering commercial electricity services in states where electric service is deregulated. According to the lawsuit, Glacial’s “true business” is actually to “launder money to fund mining in the Congo”, where conflict diamonds, or ‘blood diamonds’ are commonly sought. Blood Diamonds are so named because the gems are mined in war zones, and used to generate funds to finance insurgencies.

Filed by Michael Petras, the owner of another energy company, Franklin Power (out of business since 2005); the lawsuit has drawn the attention of Texas utility regulation agencies, who have now launched a formal investigation into Glacial Energy, according to court records. Petras alleges that Gary Mole, owner of Glacial Energy, helped him form Franklin Power, but subsequently conspired to ruin the company, using assets and clients stolen from Franklin to found Glacial.

According to lawsuit allegations, “Glacial Energy was not created for a legitimate business purpose. All income from the assets of Franklin Power Company went to Gemico, a secret subsidiary of Glacial Energy located in the Congo. Gemico is a mining company in the notorious conflict mineral (blood diamond) province of Kivu, Congo.”

The courtroom became a tinderbox of dispute, even at the outset, with both sides firing off all manner of threats and accusations.

“We believe strongly this case is frivolous, and that it’s an attempt to extort a settlement out of the company,” said Glacial attorney Jennifer Keefe in an early hearing.

Petras’ counsel, Kerry Peterson fired back, “Glacial Energy is an absolute fraud. Everyone associated with it is a crook…. Everything we say in that complaint is true, and we can prove it.”

The proceedings are still ongoing, and all parties remain largely tight-lipped. Neither Glacial Energy nor Gemico representatives have been available for comment on the matter, and the Texas PUC has declined to offer any further information.