How a California Couple Almost Got Away With a $1 Billion Ponzi Scheme That Ensnared Warren Buffett
One of largest fraud schemes in California history involves solar panels, muscle cars, a paint company, Warren Buffet’s Berkshire Hathaway Inc., and even “Mr. Worldwide” himself, the rapper Pitbull.
It all began when Jeff Carpoff, who spent nearly his entire life in Martinez, a city just northeast of San Francisco, got a bright idea. After operating his own independent car repair shop that flopped and then trying to sell weed, he decided to mount solar panels on a trailer, creating mobile clean energy generators. In 2008, the investors started rolling in, according to a new in-depth feature by The Atlantic.
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There was money to be made in the $3 billion annual portable generator market and Carpoff was able to capitalize. With his wife Paulette, Carpoff founded DC Solar. And eventually, Berkshire Hathaway Inc. invested $340 million, Bloomberg reported. Other backers included Progressive Corp. and Sherwin-Williams Co.
Over the years, the company’s $2.5 billion in sales would ultimately fund purchases such as a baseball team (the Martinez Clippers), a private jet, a collection of houses and dozens of cars. In 2018, his company had a Christmas party that saw a performance by Pitbull. On social media, Carpoff called it “epic.”
Thank you to all the people that work hard to make my dreams a reality. Had a fantastic time celebrating with my team. Our two guest appearances @RossChastain @KyleLarsonRacin and of course @pitbull made the party epic.. @DCSolar #JMFC pic.twitter.com/AS6cWSlRVN
— Jeff Carpoff (@carpoff_jeff) December 16, 2018
Only days later after that holiday fete, a large group of federal agents descended on the DC Solar headquarters and a SWAT team broke down the front door of the Carpoffs’ personal home. They found nearly $1.7 million in cash located in Carpoff’s office safe. Agents pressed his employees to reveal where their boss’ car collection was. Eventually they pointed to three warehouses that contained nearly 150 automobiles of various ages, from a 1926 Ford Model T to a 2014 Tesla Model S. U.S. Marshals weren’t able to get many of them to start because their batteries were dead. The vehicles were eventually auctioned for $8.2 million.
Prosecutors said that between 2011 and 2018, DC Solar made false statements about the market to investors and supported its deception with fake financial statements and lease contracts. This concealed what was actually going on: Rather than receiving money from lease payments, older investors were receiving money from new ones. The company defrauded investors of approximately $1 billion.
Carpoff was handed a sentence of 30 years in prison in November 2021 after he pleaded guilty to conspiracy to commit wire fraud and money laundering. Paulette Carpoff was sentenced in June 2022 to one year and three months in prison after pleading guilty to conspiracy to commit an offense against the U.S. and money laundering.
Acting U.S. Attorney Phillip A. Talbert said in a statement that Carpoff “orchestrated the largest criminal fraud scheme in the history of the Eastern District of California.”
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