California Company Owner Gets 30 Years In Prison For The ‘Largest Criminal Fraud’ In the Region

The owner of a solar energy company in the San Francisco Bay area was sentenced to 30 years in federal prison on Tuesday for a $1 billion Ponzi scheme that marked “the biggest criminal fraud scheme in the history of the Eastern District of California,” acting U.S. Attorney Phillip Talbert announced.

Jeff Carpoff, 50, pleaded guilty in January 2020 to conspiracy to commit wire fraud and money laundering. His wife, Paulette Carpoff, 47, also pleaded guilty to conspiracy to commit an offense against the United States and money laundering, according to a news release by the Justice Department.

“Mr. Carpoff lived a luxurious life as a successful businessman,” Internal Revenue Service special agent in charge Mark Pearson said in the news release. “In reality, he manipulated the system to his advantage by lying to investors, promising significant federal tax credits, and laundering his ill-gotten gains.”

According to court documents, between 2011 and 2018, Carpoff’s DC Solar manufactured mobile solar generator units (MSG), which were solar generators that were mounted on trailers and were promoted as able to provide emergency power to cell phone towers and lighting at sporting events.

The couple told its investors that they could benefit from federal tax credits by leasing the generators back to DC Solar, which would then provide them to other companies for their use, the Associated Press noted.

The Carpoff duo then proceeded to cover up the Ponzi scheme with fake financial statements and lease contracts. They also deposited new investor money into an account to give the appearance they were profiting from third-party leasing, The Washington Post noted.

The business lost so much money that Carpoff stopped the production of MSGs, eventually selling thousands of nonexistent products to investors who believed they were benefiting from leasing the solar units, the Post reported.

“In reality, at least half of the approximately 17,000 mobile solar generators claimed to have been manufactured by DC Solar did not exist,” prosecutors said in a news release.

The Carpoff and his wife tricked investors and used the money to collect luxury and collector vehicles, and to pay for a minor-league professional baseball team and a NASCAR racecar sponsorship. They also purchased 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, according to court documents.

“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,” Talbert said.

The schemers agreed to forfeit about $120 million in assets and auction 148 of the Carpoffs’ luxury and collector vehicles valued at approximately $8.2 million. The assets will be used in partial restitution to the victims of the fraud, prosecutors said.