Jeffrey Carpoff and the DC Solar Billion-Dollar Ponzi Scheme

The DC Solar Ponzi scheme was a $912 million fraud run out of Benicia, California, between 2011 and 2018 by Jeffrey Carpoff and his wife Paulette, who sold investors interests in mobile solar generators that largely did not exist and paid returns using money from newer investors. Federal prosecutors called it the largest criminal fraud scheme in the history of the Eastern District of California. Jeffrey Carpoff pleaded guilty to conspiracy to commit wire fraud and money laundering and was sentenced in November 2021 to 30 years in federal prison.¹

How the Fraud Worked

DC Solar sold mobile generators — solar panels mounted on trailers — pitched as portable power for cell towers during emergencies and for lighting at outdoor events. Investors bought interests in the units and were promised federal solar investment tax credits, lease payments, and a share of operating profits. They rarely took possession of anything. DC Solar leased the units back and said it would sublease them to third-party customers.²

Real third-party demand barely existed. Actual lease revenue from end users never topped five percent of DC Solar’s reported income. To disguise that, the conspirators built a circular payment system they called “re-rent”: investor money was moved between company accounts and repackaged as lease revenue. Between 94 and 95 percent of the lease revenue on the company’s books was really recycled investor money. In 2014, conspirators drew up a “re-rent agreement” backdated to 2011 to give the transfers a paper trail, and sublease agreements were prepared with hidden addendums that materially altered their terms.³

The generators themselves were inflated on both count and value. DC Solar claimed roughly 17,000 units worth about $2.5 billion in circulation. Investigators located fewer than 6,600. At least half never existed.⁴ In partnership-flip tax equity transactions, the company assigned each unit a tax basis of $150,000, though the IRS later determined the true build cost was around $17,000 apiece. The inflated basis let investors claim far larger federal tax credits than the equipment justified, and the IRS ultimately disallowed those benefits.⁵

Who Invested and What They Lost

DC Solar drew major corporate investors. Berkshire Hathaway put in $340 million between 2015 and 2018 and later took a $377 million write-down, telling regulators, “we now believe that it is more likely than not that the income tax benefits that we recognized are not valid.”⁶ Progressive Corp. and Sherwin-Williams Co. also invested.⁷ An arbitrator later found that the Solar Eclipse Investment Funds, which channeled institutional money into the scheme, had lost more than $1.1 billion.⁸

Where the Money Went

The Carpoffs pulled at least $140 million in investor funds for personal use.⁹ They collected roughly 150 luxury and collector cars stored across three warehouses, ranging from a 1926 Ford Model T to a 2014 Tesla Model S, and including a 1978 Pontiac Firebird Trans Am previously owned by Burt Reynolds, a 1969 Dodge Daytona, a 2018 Dodge Challenger SRT Demon, and multiple Plymouth Superbirds.¹⁰ They bought real estate in California, Nevada, the Caribbean, and Mexico.¹¹

Jeff Carpoff also purchased a minor-league baseball team, the Martinez Clippers, and a NASCAR race car sponsorship. Rapper Pitbull performed at the 2018 company Christmas party, alongside appearances by drivers Ross Chastain and Kyle Larson. When federal agents raided the Carpoffs’ home, they found roughly $1.7 million in cash inside a home office safe, along with jewelry and a subscription to a private jet service.⁷

The FBI Raid and Bankruptcy

The investigation began when a former DC Solar employee tipped off the FBI.⁵ On December 18, 2018, federal agents raided the company’s Benicia campus and the Carpoffs’ Martinez home, seizing computers, files, and vehicles. Employees were escorted off the property that day.¹² On February 4, 2019, DC Solar Solutions Inc. and DC Solar Distribution Inc. filed for Chapter 11 bankruptcy in Nevada, later converting to Chapter 7 liquidation.¹³

Jeffrey Carpoff’s Sentence

Jeffrey Carpoff pleaded guilty on January 24, 2020. On November 9, 2021, U.S. District Judge John A. Mendez sentenced him to 30 years in federal prison and ordered approximately $790.6 million in restitution.¹ Acting U.S. Attorney Phillip Talbert said Carpoff “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.”¹⁴ Paulette Carpoff pleaded guilty to conspiracy to commit an offense against the United States and money laundering, and received 11 years and three months.¹⁵

The Other Seven Defendants

All eight defendants pleaded guilty; none went to trial. Alongside the Carpoffs, six co-conspirators were sentenced.

Joseph W. Bayliss, an electrician from Martinez, was hired to pose as a licensed engineer and signed thousands of false inspection reports certifying generators had been tested. After the 2018 raids, Carpoff directed him to a Nevada warehouse to destroy evidence, where he scraped off about 200 replacement VIN stickers and destroyed at least 1,000 others. He was paid roughly $1 million and was the first employee to cooperate with investigators. He received three years in prison and $481.3 million in restitution on November 16, 2021.¹⁶

Robert A. Karmann, DC Solar’s CFO, was sentenced on April 12, 2022, to six years in prison and $624 million in restitution.³

Alan Hansen initially worked at a telecom company that did business with DC Solar and took $1 million to sign a fraudulent leasing contract misrepresenting his employer’s relationship with the company. He later joined DC Solar as an executive and signed a second forged agreement for $20,000, using a fake name to forge a former telecom employee’s signature. He received eight years in prison and nearly $620 million in restitution on May 31, 2022.¹⁷

Ryan Guidry was sentenced on January 31, 2023, to six years and six months in prison and ordered to pay $619,415,950 in restitution.³

Ari J. Lauer was DC Solar’s outside counsel from roughly 2009 through early 2019. Prosecutors said the scheme “would never have been operational” without him. He helped build the circular “re-rent” payment system, drafted the backdated agreement, and prepared the sublease documents with concealed addendums, while continuing to assure investors that demand for the generators was strong. He pleaded guilty on October 14, 2025, to 23 felony counts including conspiracy, bank fraud, and wire fraud, and was sentenced on March 9, 2026, to 11 years and five months. The California State Bar placed him on involuntary inactive status on December 19, 2025.³

Ronald J. Roach, DC Solar’s accountant, was among the first to plead guilty, doing so on October 22, 2019. Prosecutors said his job was to lie to investors and conceal the absence of third-party revenue. He was the last defendant sentenced, receiving five and a half years in prison from U.S. District Judge Dale A. Drozd on April 13, 2026.¹⁸

Recovery for Victims

On January 24, 2020, the SEC filed a civil complaint in the Eastern District of California against Jeffrey and Paulette Carpoff and the two DC Solar entities, alleging violations of the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Carpoffs consented to permanent injunctions, with monetary relief to be set by the court.¹⁹

Roughly $120 million in assets were forfeited for victim restitution. The 148 seized vehicles were auctioned by Apple Auctioneering in Woodland, California, in October 2019, bringing in about $8.2 million.¹ Institutional investors including Progressive Casualty Insurance and Sherwin-Williams pursued JAMS arbitration against the Solar Eclipse Investment Funds, and an arbitrator ordered the appointment of a receiver in May 2022 to recover assets and pursue claims against professionals connected to the transactions.⁸ With Roach’s sentencing, U.S. Attorney Eric Grant said the criminal case was closed. The total actually recovered for victims through forfeitures and ongoing receivership proceedings has not been publicly disclosed.¹⁵

1
U.S. Department of Justice. DC Solar Owner Sentenced to 30 Years in Prison for Billion Dollar Ponzi Scheme
2
IRS Criminal Investigation. DC Solar Attorney Sentenced to Over 11 Years in Prison
3
U.S. Department of Justice. DC Solar Attorney Sentenced Over 11 Years in Prison
4
U.S. Securities and Exchange Commission. SEC Complaint, Carpoff
5
Project Finance. Tax Equity Lawsuits DC Solar
6
CNBC. Berkshire Hathaway DC Solar Investment
7
Robb Report. Jeff Carpoff Fraud Solar Panels
8
Jus Mundi. Progressive Casualty Insurance v. Solar Eclipse Investment Funds, Arbitral Award
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U.S. Securities and Exchange Commission. SEC Charges Operators of $910 Million Ponzi Scheme
10
The Drive. Feds Holding Online Auction for 149 Classic Cars Seized in DC Solar Fraud Case
11
San Francisco Chronicle. A Private Jet, Jewelry, and Burt Reynolds
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ABC7 News. FBI Raids East Bay Solar Company Headquarters
13
Martinez Gazette. DC Solar Companies File Chapter 11 Bankruptcy
14
KUNM. A Solar Firm Owner Is Sentenced to 30 Years Over a Billion Dollar Ponzi Scheme
15
Danville San Ramon. Final Fraudster Sentenced in Massive DC Solar Ponzi Scheme
16
FDIC OIG. Second DC Solar Defendant Sentenced to 3 Years in Prison
17
FDIC OIG. Vacaville Man Sentenced to 8 Years in Prison
18
Mercury News. DC Solar Ponzi Scheme Fraud Final Defendant Sentenced Prison
19
U.S. Securities and Exchange Commission. Litigation Release No. 24724