The Department of Justice called it the, “Biggest Criminal Fraud Scheme in the History of the Eastern District of California.”
Jeff Carpoff was an owner of DC Solar. The California-based company leased solar powered generators. But, behind the scenes, a larger scheme was in play to fund a luxurious life.
Carpoff and others lied to investors about the demand for their solar powered product. The lies extended to false financial statements and even fake lease contracts.
The grossly overestimated numbers of units attracted new investors in the business. Funds from new investors were then used to pay older investors, in other words, a ponzi-scheme.
Older investors were under the impression that they were being paid lease revenue.
As the scheme advanced, DC Solar stopped building Solar generators all together. They began selling thousands of generators to investors that did not exist or switching VIN numbers from older machines to appear as new machines.
The company claimed to have 17,000 mobile solar generators in the field. In reality, less than half of them actually existed.
The company played a major role in NASCAR. They funded a Chip Ganassi Racing’s NASCAR Cup Series effort in addition to their NASCAR Xfinity Series effort.
After a raid of DC Solar in December 2018, Chip Ganassi was forced to close down his Xfinity Series operation due to a lack of sponsorship.
Related: Jeff Carpoff requested Ross Chatain as his driver; Chip Ganassi almost didn’t listen
U.S. Attorney Talbert
“Jeff Carpoff orchestrated the largest criminal fraud scheme in the history of the Eastern District of California,” said Acting U.S. Attorney Phillip A. Talbert.
“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. Today’s substantial sentence reflects the seriousness of the offense and provides just punishment.”
“The U.S. Attorney’s Office is committed to protecting the public and promoting respect for the law.”
FBI comments
The FBI raided the Carpoff home and the DC Solar headquarters.
“Carpoff’s egregious scheme fueled his rapacious desire for luxury and prominence with showy, public expenditures including the purchase of a sports team, high-end collector’s vehicles, international real estate and a NASCAR team,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office.
“I thank the team of determined FBI special agents, forensic accountants and professional staff who worked tirelessly with IRS Criminal Investigation and FDIC Office of Inspector General to thoroughly investigate this complex case.”
Ragan added, “Our office is committed to identifying and investigating financial fraud and encourage the public to report suspected fraud to tips.fbi.gov.”
Related: FBI raids home of NASCAR sponsor Jeff Carpoff
More comments
“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. IRS Criminal Investigation will continue to work with our federal partners to ensure that anyone involved in these types of schemes, no matter how big or small, will be held accountable for their crimes.”
“Today’s sentencing recognizes the importance of holding Mr. Carpoff accountable for his role in conspiring with others to defraud investors of approximately $1 billion through the creation of a fraudulent business venture, and using the proceeds for his and his wife’s own personal gain,” said Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG). “The FDIC OIG is committed to working with our law enforcement partners in bringing to justice those who undermine the integrity of the financial system.”
Assets seized
Back in Janurary, Carpoff pleased guilty to charges of conspiracy to commit wire fraud and money laundering. On Tuesday, U.S. District Judge John A. Mendez has sentenced Jeff Carpoff, 50 to 30 years in prison.
His wife, Paulette Carpoff, 47, also pleaded guilty to conspiracy to commit an offense against the United States in addition to money laundering.
$120 million in assets were previously seized. They’ll now bring some returns to victims.
148 of the Carpoffs’ luxury and collector vehicles were seized. The car collection included a 1978 Firebird previously owned by actor Burt Reynolds. The fleet went up for auction bringing approximately $8.233 million.
The luxurious life included ownership of a minor-league professional baseball team, private jet service subscription, a suite at a NFL stadium and a NASCAR racecar sponsorship. They also owned luxury real estate in California, Nevada, the Caribbean, Mexico and elsewhere.
Related: NASCAR racecars for sale in auction; Kyle Larson’s Daytona winner
Others involved
Fiver others have been charged:
– Joseph W. Bayliss, 46, of Martinez, and Ronald J. Roach, 54, of Walnut Creek, each pleaded guilty to related charges on Oct. 22, 2019. (Sentencing on Nov. 16, 2021, and Feb. 15, 2022; Max 10 years prison)
– 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. (Sentencing Dec. 14, 2021; Max 15 years prison)
– Alan Hansen, 50, of Vacaville, a former employee of a telecom company with which DC Solar purported to do business, pleaded guilty on July 28, 2020, to participating in the fraud scheme and accepting a $1 million bribe to sign a false contract. (Sentencing Dec. 14, 2021; Max 15 years prison)
– Paulette Carpoff is scheduled to be sentenced on Nov. 16, 2021 with max 15 years prison.
Related: NASCAR sponsorship costs? New court documents provide numbers
