The co-owners of a California solar company pleaded guilty in connection with a $1-billion Ponzi scheme whose victims included Berkshire Hathaway Inc.
Jeff Carpoff pleaded guilty Friday in Sacramento federal court to conspiracy to commit wire fraud and money laundering, according to court records. His wife, Paulette Carpoff, admitted to money laundering and conspiracy to commit an offense against the U.S. At least four others with ties to their company, DC Solar, have already pleaded guilty in the case.
DC Solar built mobile solar generators for sporting events and music festivals. The company attracted at least a dozen investors in complex deals that raised money through what’s known as tax-equity funds. They included Progressive Corp., East West Bancorp Inc., Valley National Bancorp and Sherwin-Williams. Warren Buffett’s company invested $340 million.
DC Solar, however, built and leased only a fraction of the roughly 17,000 mobile units it claimed were in use, authorities allege. Instead, DC Solar used money from new investors to pay off old ones, according to a statement from the U.S. attorney’s office for the Eastern District of California.
“This is a sad day for the Carpoffs,” Malcolm Segal, a lawyer for Jeff Carpoff, said in a telephone interview. “The business started with the best of intentions.”
Berkshire and the other victims didn’t immediately comment.
The proceeds also fueled the Carpoffs’ personal spending, authorities said. At one point, the couple owned more than 90 cars, including classic Fords and Bentleys. They also owned at least 20 properties and a professional baseball team based in Martinez, Calif., northeast of San Francisco, authorities said.
Earlier this year, the U.S. Marshals Service held an auction for about 150 luxury cars seized from the Carpoffs, including a 1978 Pontiac Firebird Trans Am once owned by Burt Reynolds.