From 2011 to 2018, would-be entrepreneurs Jeff and Paulette Carpoff of Bencia, California developed a mobile solar generator business that attracted the attention of numerous big-name investors in the corporate world.
Federal investigators charged that it was all an elaborate Ponzi scheme. The Carpoffs were alleged to have bilked more than $1 billion from the biggest names in the corporate world.
The Carpoffs allegedly scammed even Warren Buffett — normally a careful, hands-on investor — into inadvertently funding an obscenely lavish lifestyle for themselves.
The Carpoffs had developed a supposedly revolutionary mobile solar power generator that could be used at outdoor venues.
Their company, DC Solar, attracted the investing interest of the Oracle of Omaha himself, Warren Buffett. His holding company, Berkshire Hathaway, invested more than $340 million into DC Solar.
East West Bancorp, insurance company progressive, and paint company Sherwin-Williams also heavily invested in the company. The Carpoffs secured more than $1 billion in investments for DC Solar by the end of 2018.
Investors could claim tax deductions and alternative energy tax credit on the depreciation of 17,000 mobile solar generators that DC Solar pledged to build.
Yet the Carpoffs only built a fraction of the nearly 17,000 mobile solar generators, investigators alleged. The couple had in fact created a Ponzi scheme, the government charged.
Any money they secured from newer investors that they didn’t spend on themselves was instead used to pay back older investors, say investigators.
The Carpoffs used the money to buy more than 150 cars, including a vintage 1978 Pontiac Trans Am once owned by Burt Reynolds. The couple owned over 25 luxury properties, over $500,000 in jewelry, their own minor league baseball team, and numerous other luxuries.
Their lifestyle came crashing down by late 2018.
Consequences
On December 22, 2018, DC Solar’s offices and the Carpoff’s primary residence were raided by the FBI.
Ill-gotten gains seized and auctioned, DC Solar filed for Chapter 11 bankruptcy by February 2019.
On January 24, 2020, Jeff and Paulette Carpoff pleaded guilty to charges related to money laundering and conspiracy in the Eastern District of California.
The couple will be sentenced in May 2019. Jeff Carpoff faces 30 years in federal prison. Paulette Carpoff faces 15 years.
In March 2019, Berkshire Hathaway took a $377 million financial hit due to the Carpoff’s fraudulent schemes.
