A solar company official has been sentenced to six years in prison and ordered to pay $624m in restitution after being convicted of running a Ponzi scheme.
The Department of Justice revealed on Tuesday that Robert A Karmann, 55, of Clayton, California, was sentenced and fined for operating a Ponzi scheme using solar energy technology.
Karmann, an accountant, was hired by DC Solar in 2014 to be its controller, and later became its chief financial officer.
The company builds mobile solar generator units which are mounted on trailers. Those generators were reportedly sold to investors who were given substantial federal tax credits. They were also led to believe that the generators would be a wildly in-demand technology and third parties would likely pay to rent the machines.
However, that demand never materialised, and the company instead took the money from new investors to pay older investors. The company reportedly tried to hide the transactions as legitimate third party lease revenue.
In addition to the circular payments, DC Solar executives falsified financial documents and contracts. The company also sold units it never intended to build, ultimately taking payment for nearly 8,500 generators that never existed.
The company's founder, Jeff Carpoff, among other officials were named as co-conspirators in the scheme.
Last year, Carpoff was sentenced to 30 years in prison and ordered to pay $790.6m for conspiracy to commit wire fraud and money laundering, according to the DoJ. His wife, Paulette Carpoff, also pleaded guilty to conspiracy to commit an offense against the US and money laundering. She will be sentenced on 10 May, 2022.
"He 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," Phillip Talbert, the acting US Attorney for the Eastern District of California, said.
The DoJ said Carpoff and his wife used the money they made from the scheme to fund a life of luxury. They purchased a minor-league baseball team, sponsored a NASCAR race car, purchased real estate, jewelry, and luxury cars, including one formerly owned by Burt Reynolds.
Numerous other defendants tied to the scheme have pleaded guilty and are set to be sentenced later this year.
Alan Hansen, 50, of Vacaville, is scheduled to be sentenced on 26 April 2022; Ronald J Roach, 54, of Walnut Creek, is scheduled to be sentenced on 3 May 2022; and Ryan Guidry, 44, of Pleasant Hill is scheduled to be sentenced on 7 June 2022.
The scheme was the largest criminal fraud case in the district's history. The district includes Sacramento and Fresno.
