星期三, 12月 8, 2021
Home PV News North America DC Solar owner sentenced to 30 years for Ponzi scheme

DC Solar owner sentenced to 30 years for Ponzi scheme

In what the Department of Justice described as “the largest criminal fraud scheme in the history of the Eastern District of California,” Jeff Carpoff has been sentenced to 30 years in prison for conspiracy to commit wire fraud and money laundering.

Source:pv magazine

Jeff Carpoff, a co-owner of DC Solar, who had previously pled guilty to charges of conspiracy to commit wire fraud and money laundering in a Ponzi scheme that pulled in more than $900 million, has been sentenced to 30 years in prison by U.S. District Judge John A. Mendez.

According to court documents and the Department of Justice (DOJ), DC Solar manufactured mobile solar generator units – generators mounted on trailers – for seven years, while simultaneously carrying out accounting and lease revenue fraud using Ponzi-like circular payments. The trailers were promoted as having capability to provide emergency power to cellphone towers and lighting at sporting events.

Carpoff and his co-conspirators misrepresented the market demand and third-party revenue leasing for their units, and used false financial statements and lease contracts to cover the inaccurate figures. The circular payment scheme began with Carpoff and others using new investor money to pay older investors the supposed lease revenue that they were expecting.

As DC Solar lost vast sums of money, DOJ outlines that Carpoff and other conspirators stopped building the units altogether, selling thousands of non-existent generators to investors. Furthermore, Carpoff and others made it appear that units existed in locations that they did not, swapped vehicle identification number stickers on units that had been built earlier, and attempted to deceive investors during equipment inspections. All told, DOJ outlines that at least half of the approximately 17,000 mobile solar generators claimed to have been manufactured by DC Solar never existed.

Carpoff and his associates were able to attract investors with the generous federal tax credits related to the mobile solar generator units. The company grew to secure NASCAR sponsorships, a luxury box for home games of the then-Oakland Raiders, and a private concert from Mr. Worldwide, Pitbull.

Among the investors was Warren Buffet’s Berkshire Hathaway, which invested $340 million to garner federal tax benefits in tax-equity funds.

The scheme came crashing down in December 2018, when company headquarters were raided by the FBI.

In January 2019, DC Solar Solutions filed for bankruptcy under Chapter 11 in an attempt to voluntarily reorganize. At the time, DC Solar’s parent company was claiming $1-10 billion in assets and minimal liabilities. However, in March, the case was converted to a Chapter 7 liquidation.

That story concluded in May 2019, ending with the auction at the company’s Benicia, California headquarters of more than 16,000 Talesun and Renesola PV modules and 2,000 SMA inverters. The equipment was auctiioned as part of the company’s $50 million in abandoned solar hardware used in the firm’s trailer-mounted solar generator business.

According to DOJ:

“The forfeiture included seizing and auctioning 148 of the Carpoffs’ luxury and collector vehicles, including the 1978 Firebird previously owned by actor Burt Reynolds. This historical auction resulted in recouping approximately $8.233 million.”

“Jeff Carpoff orchestrated the largest criminal fraud scheme in the history of the Eastern District of California,” said Acting U.S. Attorney Talbert. “He claimed to be an innovator in alternative energy, but he was really just stealing money from investors and costing the American taxpayer hundreds of millions in tax credits. Today’s substantial sentence reflects the seriousness of the offense and provides just punishment. The U.S. Attorney’s Office is committed to protecting the public and promoting respect for the law.”

Paulette Carpoff and some of the other defendants, Robert A. Karmann, Ryan Guidry, and Alan Hansen, yet to be sentenced, face a maximum statutory penalty of 15 years in prison. Karmann, Guidry, and Hansen are scheduled to be sentenced on Dec. 14, 2021. Paulette Carpoff is scheduled to be sentenced on Nov. 16, 2021.

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