A San Francisco Bay Area man was sentenced to 30 years in federal prison for carrying out a daring solar-powered Ponzi scheme that defrauded investors of $ 1 billion, the biggest criminal fraud scheme in the history of the district.
Jeff Carpoff, the 50-year-old owner of solar power company DC Solar, was sentenced on Tuesday. His wife, Paulette Carpoff, 47, faces up to 15 years in prison after pleading guilty to both money laundering and conspiracy to commit an offense against the United States.
The couple started Benicia-based DC Solar as a legitimate company that made trailer-mounted solar generators, prosecutors said. But the company was then used in a “blatant scheme” to rip off its investors, including Warren Buffett’s Berkshire Hathaway.
The Carpoffs used the money to buy and invest in more than 150 luxury cars, 32 properties, a private jet service subscription, a semi-pro baseball team, a Nascar race car sponsorship and a sequel in the new Las Vegas Raiders stadium.
The couple agreed to give up more than $ 120 million in assets, including a fleet of vintage cars and vacation homes in the Caribbean, Mexico, Lake Tahoe and Las Vegas bought entirely in cash. Prosecutors said they intended to use the assets in partial restitution to victims of the fraud. The government has already auctioned 148 vehicles, including the 1978 Firebird, previously owned by the late actor Burt Reynolds, for a total of over $ 8.2 million.
DC Solar marketed its generators between 2011 and 2018 as being capable of providing back-up power to mobile phone companies or lighting up at sporting and other events.
But prosecutors say homeowners began telling investors they could get federal tax credits by leasing the generators to DC Solar, who would then supply them to other companies for their use.
In fact, prosecutors say the generators never provided much income, and the early investors were paid with funds from subsequent investors.
Carpoff and others covered up the scheme with bogus financial statements and leases, prosecutors said.
They eventually stopped building the mobile generators altogether, and at least half of the 17,000 generators the company claimed did not actually exist, prosecutors said.
Instead, they said Carpoff and others said the generators were in places where they didn’t really exist. They traded ID number stickers on generators that had been built before. And they fooled investors during equipment inspections.
âHe claimed to be an innovator in the field of alternative energy, but he was really just stealing money from investors and costing the US taxpayer hundreds of millions in tax credits,â said Talbert.
The company was involved in $ 2.5 billion in investment deals between 2011 and 2018, costing investors $ 1 billion, prosecutors said earlier. Among the investors was Berkshire Hathaway, which lost around $ 340 million.
The case represents the largest criminal fraud scheme in the history of the federal court district that covers the interior of northern California, according to acting US attorney Phillip Talbert.
“Carpoff’s blatant ploy fueled his rapacious desire for luxury and notoriety with gaudy public spending,” said Sean Ragan, special agent in charge of the FBI’s field office in Sacramento.
In addition to the Carpoffs, five others have pleaded guilty to related offenses and are awaiting conviction.