Lafayette attorney indicted on 23 counts in DC Solar Ponzi scheme
LAFAYETTE – An attorney from Lafayette has been arrested and indicted in connection for his alleged role in the massive Ponzi scheme involving DC Solar.
According to U.S. Attorney Phillip Talbert's office, 59-year-old Ari J. Lauer is facing multiple charges, including conspiracy to commit wire and bank fraud, bank fraud and wire fraud affecting a financial institution, according to an indictment unsealed Tuesday. Lauer had served as the company's outside counsel between 2009 and January 2019.
Between 2011 and 2018, DC Solar manufactured trailer-mounted mobile solar generator units, which they claimed were used to provide emergency power to cellphone towers and lighting at sporting and other events. Prosecutors said owner Jeff Carpoff, his wife Paulette Carpoff, and their co-conspirators solicited investors using a variety of fraudulent techniques.
Prosecutors said a key part of the fraud was that investors never took possession of the generators. DC Solar leased the generators back from investors and claimed to sublease to third parties to generate revenue.
"In reality there was very little actual third-party rental demand for the generators, yet when Lauer and the other co-conspirators learned this, they continued to represent falsely to investors that the rental market for the generators was robust," Talbert's office said in a statement.
Prosecutors noted a 2012 meeting with Lauer, Jeff Carpoff and others about third-party lease revenue failing to meet obligations. They allege that the conspirators agreed to conceal the lack of revenue by transferring investors' money from one account to another, misrepresenting the flow of funds as lease revenue.
During the conspiracy, prosecutors allege that 94-95% of the supposed lease revenue on the books was actually intercompany transfers disguised as money from new investors.
Lauer and other members of the conspiracy also allegedly defrauded investors by preparing sublease agreements with "concealed addendums" that materially altered the terms of the contracts.
Investors reportedly gave $912 million to DC solar between March 2011 and December 2018. During that time, the Carpoffs used investors' money to fund their lavish lifestyle, which included buying luxury homes and automobiles, the purchase of a minor league baseball team and the sponsorship of a NASCAR team.
Jeff Carpoff was sentenced in 2021 to 30 years in federal prison and was ordered to pay more than $790 million in restitution after pleading guilty to conspiracy to commit wire fraud and money laundering. Paulette Carpoff pleaded guilty to conspiracy and money laundering and was sentenced last year to 11 years and three months in federal prison.
Several other members of the conspiracy have pled guilty, including DC Solar CEO Robert Karmann, who was sentenced to six years in prison and ordered to pay $624 million.