A Martinez couple who was operating a seemingly legitimate business selling solar generators pleaded guilty Friday to various charges stemming from a Ponzi scheme that netted them $1 billion in fraudulent income — affording them an extremely lavish lifestyle.
Jeff and Paulette Carpoff launched DC Solar in Benecia to provide trailer-mounted, mobile solar generators for off-grid uses — like for large outdoor events, emergency situations, and more. But, as the Associated Press reports, "the company morphed into a Ponzi scheme by telling investors they can take advantage of federal tax credits by leasing the generators back to DC Solar, which would then provide them to other companies for their use." The couple was caught taking money from new investors to pay off original investors, taking in $2.5 billion in investment transactions over a seven-year period, beginning in 2011.
Investors included Warren Buffet's Berkshire Hathaway Inc., which reportedly lost $340 million in the scheme.
The house of cards had to come crashing down, and now the Carpoffs face decades in federal prison, as well the forfeiture of all their assets, worth around $120 million — the largest criminal forfeiture in the history of of this federal district, according to U.S. Attorney McGregor Scott, whose office prosecuted the case. In addition to houses in Tahoe, Las Vegas, and the Caribbean, all purchased with cash, the Carpoffs owned a fleet of 150 collector cars, and more.
The couple also bought an independent baseball team, the Martinez Clippers, and the city of Martinez says it is still owed $35,000 for a waterfront baseball stadium it constructed for the team two years ago.
"This billion-dollar Ponzi scheme hurt investors and took money from the United States Treasury," Scott said in a statement, noting that the $120 million would be returned to defrauded investors, and $500 million has also been returned to the U.S. Treasury. "Today’s guilty pleas send a strong message that fraudsters will get caught and will pay for their crimes. You can run, but you cannot hide," he said.
As the Mercury News notes, among their other lavish-spending shenanigans, the Carpoffs paid for a private 2018 holiday concert by Pitbull, whose hit song "Timber" includes the lyric "The bigger they are, the harder they fall."
There are five other named co-conspirators also bein prosecuted, including DC Solar's general contractor and account. They are Robert Karmann, of Clayton; Ryan Guidry, of Pleasant Hill; Alan Hansen, of Vacaville; Ronald Roach, of Walnut Creek; and Joseph Bayless, of Martinez.
Jeff Carpoff now faces up to 30 years in prison, and Paulette faces up to 15 years.