A Martinez woman has been sentenced to over 11 years for the biggest fraud scheme in the history of the Eastern District of California, according to federal prosecutors.
DOJ said Paulette Carpoff, 51, pleaded guilty on Nov. 9, 2021, to conspiracy to commit an offense against the United States and money laundering. She played a major role in a large Ponzi scheme as the chief operating officer for DC Solar, a former solar power supply company.
At least 5 people were involved in the $1 billion Ponzi scheme, including Carpoff’s husband. He was charged with 30 years in federal prison last November and was ordered to pay $790.6 million in restitution.
The crimes were complex and involved mobile solar generators (MSGs) mounted on trailers. DC Solar claimed they could give emergency power to cellphone towers and lighting at sporting and other massive events. They gather investors by pointing out the generous federal tax credits due to the MSGs’ green energy.
According to DOJ, investors would purchase the MSGs without ever taking possession of them, paying a percentage of the sale price and financing the balance with DC Solar. Then the investor leased the MSGs back to the company, which would lease them to third parties.
Unfortunately, the third-party leases had little income.
This is where the Ponzi scheme comes in.
DC Solar paid early investors with funds contributed by later investors. MSGs that didn’t even exist were “sold.”
False financial statements and false lease contracts were created. Prosecutors also determined that roughly 94% of the revenue claimed by the company came from new investor cash.
The court found that Paulette Carpoff controlled the payments and hid DC Solar’s lack of lease revenue. She also tricked investors into thinking that the company was a success.
The court-ordered restitution showed how wealthy the couple had become through this scheme. They owned luxury real estate in Lake Tahoe, Las Vegas, the Caribbean, and Cabo San Lucas. They also possess over 150 luxury and collector cars, own private jet service, and lavish jewelry.
Search warrants found $18,000 in Paulette’s purse, another $18,000 in her bedroom, $22,000 in a safe, and $9,000 in their vehicles.