Great frauds in history: Jeff Carpoff’s green Ponzi scheme

Jeff Carpoff's plan to make money from renting out solar-powered generators quickly turned into a Ponzi scheme.

Jeff Carpoff, born in 1970, trained as a car mechanic before setting up RoverLand USA, which became one of the largest independent certified Land Rover and Jaguar repair facilities in America. A chance encounter with a client who wanted to have solar panels installed, but was worried about them being stolen, led Jeff and his wife, Paulette, to set up DC Solar, a new company that provided mobile solar-power generators. The company quickly established a reputation as a major player in the solar industry, providing temporary generators for a range of clients, including a concert by the pop star Pink.

What was the scam?

Between 2011 and 2018, DC Solar decided to fund its expansion by selling its generators to investors through its subsidiary DC Solar Solutions, with the idea that another subsidiary, DC Solar Distribution, would lease them back, paying investors a generous rate of return. However, DC Solar was unable to make much money from renting out generators and it quickly turned into a Ponzi scheme. DC Solar claimed to have 17,600 generators, but only 6,600 could later be located – early investors were paid from the money received by new sales. The Carpoffs skimmed large amounts of money from their company to acquire properties, private jets, and even a minor league baseball team.

What happened next?

By late 2019 DC Solar was supposedly doing well enough for the Carpoffs to invite the rapper Pitbull to headline the company’s Christmas party. Only a few days later the FBI raided the Carpoffs’ home, arrested the couple, and seized business records and personal assets, including most of their luxury cars, including the 1978 Firebird previously owned by actor Burt Reynolds, and $1.8m in cash. DC Solar was forced to declare bankruptcy. By January 2020 the couple had pleaded guilty to defrauding investors and laundering money. Covid-19 has delayed their formal sentencing. Jeff Carpoff faces up to 30 years and his wife up to 15 years.

Lessons for investors

Investors put a total of $2.7bn into DC Solar, both directly and via investment funds. Much of this was in the form of promissory notes, but large upfront payments of cash of around $900m were also made. Liquidators expect to recover only a fraction of that from a sale of assets. To add insult to injury, the investors, including Warren Buffett’s Berkshire Hathaway, will have to repay the generous tax credits they received for investing in green energy, proving that it’s a bad idea to invest in a scheme just for the potential tax breaks.

Recommended

The hidden cost of employee share schemes
Investment strategy

The hidden cost of employee share schemes

Paying employees in shares comes at a cost to investors – but it isn’t always easy to see how much, says Stephen Clapham.
26 Sep 2022
Sterling crashes to its lowest since 1985 after mini-Budget
Currencies

Sterling crashes to its lowest since 1985 after mini-Budget

The pound has fallen hard and is heading towards parity with the US dollar. Saloni Sardana explains why, and what it means for the UK, for markets and…
23 Sep 2022
Earn 3.7% from the best savings accounts
Savings

Earn 3.7% from the best savings accounts

With inflation topping 10%, your savings won't keep pace with the rising cost of living. But you can at least slow the rate at which your money is los…
23 Sep 2022
Three top-notch Asian stocks to buy
Share tips

Three top-notch Asian stocks to buy

Professional investors Adrian Lim and Pruksa Iamthongthong, managers of the Asia Dragon Trust, pick three of their favourite Asian stocks to buy now.
23 Sep 2022

Most Popular

Could gold be the basis for a new global currency?
Gold

Could gold be the basis for a new global currency?

Gold has always been the most reliable form of money. Now collaboration between China and Russia could lead to a new gold-backed means of exchange – g…
22 Sep 2022
Paypal, bitcoin, and the weaponisation of money
Bitcoin & crypto

Paypal, bitcoin, and the weaponisation of money

Recent events have shown how both business and governments can “weaponise” money and shut down dissent. What to do? Buy bitcoin, says Dominic Frisby.
22 Sep 2022
Why you should short this satellite broadband company
Trading

Why you should short this satellite broadband company

With an ill-considered business plan, satellite broadband company AST SpaceMobile is doomed to failure, says Matthew Partridge. Here's how to short th…
23 Sep 2022