Fancy cars, resort homes, concert by Pitbull: Feds charge California couple in alleged Ponzi scheme
A high-flying couple who owned a solar company in Benicia that is the focus of what federal prosecutors call a $2.5 billion Ponzi scheme have been charged with conspiracy and money laundering in Sacramento federal court.
Jeff and Paulette Carpoff, Martinez residents who owned DC Solar Solutions, were both charged in an information filed in federal court that follows guilty pleas by four other individuals implicated in the alleged scheme.
The couple made brief appearances Thursday before U.S. Magistrate Judge Edmund F. Brennan and entered not guilty pleas. They both are scheduled to return Friday for a change of plea hearing, which typically signals a defendant has reached a plea agreement with prosecutors.
Jeff Carpoff, 49, is charged with conspiracy to commit wire fraud and money laundering, charges that could net him up to 30 years in prison. Paulette Carpoff, 46, is charged with conspiracy to commit an offense against the United States and money laundering and could face up to 15 years in prison.
Malcolm Segal, attorney for Jeff Carpoff, and William Portanova, Paulette Carpoff’s attorney, said after court they would wait until Friday’s hearing before U.S. District Judge John A. Mendez to discuss the case.
The Carpoffs, who once owned a minor league baseball team in Martinez and had amassed millions of dollars of properties and a collection of 150 antique and exotic vehicles, had much of their property seized last year by federal officials.
The vehicles, including a Pontiac Trans-Am once owned by actor Burt Reynolds, were sold in Woodland last year in an auction that netted $8.2 million.
The Carpoffs are accused of an audacious scheme that court papers say cost investors at least $1 billion.
Court papers say the company offered investors huge federal tax incentives to lease mobile solar generators typically used at racetracks and concert venues or to power remote cell phone towers during power outages.
But prosecutors say in court papers that the company vastly overstated the number of generators it produced and leased, and that the Carpoffs used money from investors “to present the appearance they operated a successful and legitimate business to continue to attract and lull investors.”
All the while, court papers say, the couple “used investor money to support a lavish lifestyle, which included payment for more than 150 luxury and collector vehicles, luxury real estate in Lake Tahoe, Las Vegas, the Caribbean, Cabo San Lucas, Mexico, and elsewhere, a suite at a professional football stadium, a private jet service, gambling, jewelry, and other personal property.”
In addition to using the money to fund the now-defunct Martinez Clippers baseball team, court papers say, they funded a NASCAR sponsorship and “a 2018 performance by an internationally known recording artist at a DC Solar holiday party, as well as bonus payments to employees and others, and illicit payments to conspirators and others.” (Jeff Carpoff’s Twitter account identifies the holiday party artist as rapper Pitbull.)
The investigation, spearheaded by Assistant U.S. Attorneys Andre Espinosa and Kevin Khasigian, is continuing, and court filings accuse defendants in the case of going to great lengths to conceal their activities, including falsifying documents and offering to pay other individuals to deceive investors.
The court documents also accuse Jeff Carpoff of conspiring with others to scrape off vehicle identification numbers from solar generators and replacing them with other VIN stickers” before investors came to inspect the devices.
The Carpoffs were allowed to remain out of custody after posting $500,000 unsecured bonds, agreeing to a 10 p.m. curfew and agreeing not to travel outside the Eastern, Northern and Central Districts of California (essentially covering the area from the Oregon line to Los Angeles) and the state of Nevada.
They already have surrendered their passports.
This story was originally published January 23, 2020 at 12:21 PM with the headline "Fancy cars, resort homes, concert by Pitbull: Feds charge California couple in alleged Ponzi scheme."