The leader of a solar energy company in the San Francisco Bay Area was sentenced to 30 years in federal prison on Tuesday for running a $1 billion Ponzi scam.
Acting U.S. Attorney Phillip Talbert described the scheme as “the greatest criminal fraud scheme in the history of the federal court district that spans inland Northern California.”
After pleading guilty to conspiracy to commit wire fraud and money laundering in January 2020, Jeff Carpoff, 50, received the maximum sentence. After pleading guilty to money laundering and conspiracy to commit an act against the United States at the same time, Paulette Carpoff, 47, faces up to 15 years in prison.
The pair agreed to give up more than $120 million in assets, including a collection of classic cars and cash-only holiday houses in the Caribbean, Mexico, Lake Tahoe, and Las Vegas. Prosecutors said they plan to utilize the assets to make partial reparation to the scam victims.
The government has already sold 148 automobiles, including a 1978 Firebird that belonged to late actor Burt Reynolds and brought in more than $8.2 million.
Prosecutors said the pair launched DC Solar, situated in Benicia, as a genuine company that manufactured solar generators mounted on trailers. Between 2011 and 2018, they advertised the generators as being able to provide emergency power to telecommunication companies as well as illumination for sporting and other events.
Prosecutors allege, however, that the owners began informing investors that they could get federal tax credits by leasing the generators back to DC Solar, which would then lease them to other businesses.
Prosecutors claim that the generators never generated much revenue and that early investors were compensated with monies from later investors.
Prosecutors alleged Carpoff and others covered up the plot with false financial statements and lease contracts.
Prosecutors believe that the company finally stopped producing mobile generators and that at least half of the company’s reported 17,000 generators never existed. Instead, they claimed that Carpoff and others claimed that the generators were located in places where they did not exist. They swapped labels with identification numbers on generators that had already been built. Investors were also duped during equipment inspections.
“He pretended to be an alternative energy pioneer, but all he was doing was stealing money from investors and costing the American taxpayer hundreds of millions of dollars in tax credits,” Talbert said.
Prosecutors previously stated that the business was involved in $2.5 billion in investment transactions between 2011 and 2018, costing investors $1 billion. Warren Buffett’s Berkshire Hathaway Inc. was one of the investors, and it lost $340 million.
The Carpoffs spent the money on more than 150 luxury cars, 32 properties, a private aircraft subscription, a semipro baseball team, a NASCAR racecar sponsorship, and a suite at the new Las Vegas Raiders stadium, among other things.
“Carpoff’s heinous plot fueled his voracious drive for luxury and prominence with flamboyant, public spending,” said Sean Ragan, the FBI’s Sacramento Field Office’s special agent in charge.
Five people have pled guilty to comparable offenses and are awaiting punishment, in addition to the Carpoffs.
