Feds Seize Millions From Couple Accused in Ponzi Scheme

SACRAMENTO, Calif. (CN) – Trying to recoup potentially hundreds of millions of dollars for Uncle Sam, federal prosecutors are eyeing Northern California couple’s clouded riches that they say was built on an $800 million scam involving solar panels.

Sparked by a tip from a former employee, the FBI began investigating the owners of DC Solar in July 2018 for potential investment and tax fraud. The search evolved into a criminal case after the FBI raided the solar company’s Benicia headquarters Dec. 18 and seized assets and bank accounts.    

U.S. Attorney McGregor Scott says the company – which filed for bankruptcy shortly after the raid – secured funding by promising “favorable tax consequences” and by bloating the popularity of its products. The company built mobile solar generators, which are essentially solar panels that can be moved from site to site on trailers.

“In my training and experience, the use of investor money to lull investors into believing the transaction is legitimate and profit-making is evidence of a Ponzi-type investment fraud scheme,” FBI Special Agent Christopher Phillips said in a declaration filed Monday in a federal court in Sacramento.

According to court documents, an unnamed couple diverted most of the investments from the generator-leasing scheme to a company they created to fund lavish shopping sprees that covered vacation homes, $19 million worth of private jet trips, 90 cars and tickets for a $782,000 luxury box at the Las Vegas Raiders stadium-to-be.

On the heels of the FBI raid and the company’s subsequent bankruptcy filing, the feds are asking a judge to sign over assets seized from 64 foreign and domestic bank accounts along with a horde of properties and jewelry.

Scott said the government can’t waste any time as just one day after the FBI raid, the couple diverted $5 million from an investment fund to a newly created account unknown to investigators.

Neither Scott’s forfeiture complaint nor Phillips’ declaration mentions the couple by name and instead refers to them as individuals 1 and 2. However, the claimants are listed as Jeffrey and Paulette Carpoff, the owners of DC Solar and its associated businesses.

Up until the FBI raid, the Carpoffs sponsored a NASCAR team and were the owners of a minor league baseball team in the San Francisco Bay Area. Documents filed in the Carpoffs’ Chapter 11 bankruptcy case in Nevada list various NASCAR-related debts and a debt to the city of Martinez, which announced Tuesday that it hasn’t found new owners to take over for the Carpoffs in time for the upcoming baseball season.

The Carpoffs’ lawyer in the bankruptcy case didn’t return a phone call or email late Tuesday.

Phillips said bank and title records reflect the breadth of the couple’s spending sprees that started in 2011 after the investor dollars began pouring in.

“There is probable cause to believe that the investor funds paid to the company are the result of an investments and tax fraud scheme and that individuals 1 and 2 have committed wire fraud in connection with the scheme,” Phillips’ declaration states. “Accordingly, there is probable cause to believe that individuals 1 and 2, in connection with the purchase of real property and vehicles, have engaged in monetary transaction involving criminally derived funds.”

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