Count Warren Buffett’s conglomerate, Sherwin-Williams and Progressive as three of the victims of a solar energy Ponzi scheme that amounted to almost $1 billion.
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DC Solar Solutions Inc. made mobile generators that were powered by solar panels. It is now bankrupt. The Ponzi scheme by the Benicia-based company case has become the “biggest criminal fraud scheme in the history of the Eastern District of California,” per a statement released by the U.S. Attorney’s Office in said district.
The company’s owners, married couple Jeff and Paulette Carpoff, pleaded guilty late last month. Jeff Carpoff pleaded guilty to conspiracy to commit wire fraud and money laundering. His potential maximum sentence could be a statutory penalty of 30 years in prison. Paulette Carpoff pleaded guilty to conspiracy to commit an offense against the United States and money laundering. Her maximum sentence could be 15 years in prison. They will be sentenced on May 19, 2020.
Court documents show that “between 2011 and 2018, DC Solar built mobile solar generator units (MSG), solar generators that were mounted on trailers that were promoted as able to provide emergency power to cellphone towers and lighting at sporting events. A significant incentive for investors were generous federal tax credits due to the solar nature of the MSGs,” per the statement.
The Carpoffs would sell solar generators to investors, who were unaware of many of the generators’ non-existence, almost half of the 17,000 they claimed to manufacture. They also falsified financial statements, lease contracts, and applied other tactics to hide the fraud.
U.S. Attorney McGregor W. Scott said: “This billion-dollar Ponzi scheme hurt investors and took money from the United States Treasury. This case represents not only the largest criminal fraud scheme in the history of the District, it also represents the largest criminal forfeiture in the history of the District with over $120 million in assets forfeited. All of this money will be returned to the victims. This scheme also targeted the United States Treasury, and we have returned $500 million to the Treasury to date. Agents, investigators and attorneys from various federal agencies are still working to continue to return money to victims and the United States Treasury. Today’s guilty pleas sends a strong message that fraudsters will get caught and will pay for their crimes. You can run, but you cannot hide.”
Four employees of DC Solar have previously pleaded guilty to federal crimes for participating in the scheme. Another one is scheduled to plead guilty on February 11, 2020.
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Reference: U.S. Attorney’s Office, Eastern District of California, The Sacramento Bee
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