Feds: Billion-Dollar Bay Area Ponzi Scheme Funded Jet-Setting Lifestyle, Ownership Of Minor League Baseball Team
SACRAMENTO (CBS SF) -- Jeff Carpoff, owner of Benicia-based DC Solar, was sentenced to 30 years in federal prison Tuesday in a billion-dollar Ponzi scheme that he used to finance luxury homes and automobiles, the purchase of a minor league baseball team and a sponsorship of a NASCAR team.
Acting U.S. Attorney Phillip A. Talbert called the case one of the biggest criminal fraud schemes in San Francisco Bay Area history
Carpoff pleaded guilty in January to federal conspiracy to commit wire fraud and money laundering charges. His wife, Paulette, also has pleaded guilty to conspiracy and money laundering and faces a maximum statutory penalty of 15 years in prison when she is sentenced.
The government's investigation has resulted in approximately $120 million in assets forfeited that the government intends to seek authorization to use towards restitution to victims of the fraud.
According to court documents, between 2011 and 2018, DC Solar manufactured mobile solar generator units, which were solar generators that were mounted on trailers and 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 project.
But investigators said Carpoff and his fellow conspirators sold solar generators that did not exist to the investors, making it appear that they existed in locations that they did not, creating false financial statements and obtaining false lease contracts. In reality, at least half of the approximately 17,000 solar generators claimed to have been manufactured by DC Solar did not exist.
"Jeff Carpoff orchestrated the largest criminal fraud scheme in the history of the Eastern District of California," Talbert added. "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."
The forfeiture associated with the case 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.
In addition to their collection of luxury and collector vehicles, Jeff and Paulette Carpoff used money from the scheme to pay for a minor-league professional baseball team and a NASCAR racecar sponsorship; to purchase luxury real estate in California, Nevada, the Caribbean, Mexico, and elsewhere; a subscription private jet service; a suite at a professional football stadium and jewelry.
"Mr. Carpoff lived a luxurious life as a successful businessman," said Special Agent in Charge Mark H. Pearson. "In reality, he manipulated the system to his advantage by lying to investors, promising significant federal tax credits, and laundering his ill-gotten gains."
In addition to the Carpoffs, five other defendants have been charged with criminal offenses related to the fraud scheme.
Joseph W. Bayliss, 46, of Martinez, and Ronald J. Roach, 54, of Walnut Creek, each pleaded guilty to related charges on Oct. 22, 2019. Bayliss is scheduled for sentencing on Nov. 16 and Roach is scheduled for sentencing on Feb. 15, 2022.
Robert A. Karmann, 54, of Clayton, pleaded guilty to related charges on Dec. 17, 2019; and Ryan Guidry, 44, of Pleasant Hill, pleaded guilty to related charges on Jan. 14, 2020.
Alan Hansen, 50, of Vacaville, a former employee of a telecom company with which DC Solar purported to do business, pleaded guilty in July to participating in the fraud scheme and accepting a $1 million bribe to sign a false contract.
Karmann, Guidry, and Hansen are scheduled to be sentenced on Dec. 14, 2021.
