On Tuesday, a former energy executive from California was sentenced to six years in federal prison and ordered to pay $624 million in restitution for his role in a $1 billion solar power fraud that defrauded Warren Buffett’s company and many others.
Originally from Clayton, California, Mr. Karmann was the chief financial officer for DC Solar, a firm with its headquarters in Benicia, near San Francisco, that supplied mobile solar generator units placed on trailers. He was 55 years old at the time.

Dc Solar'S Fraud

From 2011 to 2018, the company marketed the generators as being capable of supplying emergency power to telecommunication providers as well as providing lights for athletic and other events.

Company executives, on the other hand, began promising investors that they could profit from federal tax credits by purchasing generators and leasing them back to DC Solar, which would then supply them to other businesses for their use, according to federal authorities.

In addition, the generators failed to generate much income, and prosecutors allege that the corporation operated a Ponzi scheme in which early investors were compensated with funds from later investors.
The company finally ceased production of the mobile generators, and prosecutors contend that at least half of the company’s reported 17,000 generators never existed in the first place.

Dc Solar'S Fraud
DC Solar’s Fraud

The U.S. Justice Department said Karmann instructed a subordinate in DC Solar’s accounting department to “‘make it up'” while replying to a customer request for location data on their generators, according to a press release issued by the department. In the years that Karmann was aware of the deception, DC Solar was able to raise more than $600 million in investor cash as a result of the scheme, according to the news release.

DC Solar founder Sentenced

Buffett’s Berkshire Hathaway Inc. was one of the companies taking advantage of by the scheme.

Mr. Carpoff, the creator of DC Solar, was sentenced to 30 years in prison and ordered to pay $790.6 million in restitution in November for his involvement in a conspiracy to commit wire fraud and money laundering.

Solar Fraud

Paulette Carpoff, his wife of 47 years, has pleaded guilty to federal charges and will be sentenced in May of this year.

Authorities claim that the Carpoffs used the money to purchase and invest in 32 residences, more than 150 luxury automobiles, a subscription to an exclusive private jet service, a semipro baseball team, a NASCAR race-car sponsorship, and a suite at the new Las Vegas Raiders stadium.

The term of three years in prison for one other man was handed down last year, and three others have pled guilty to criminal charges and are awaiting sentencing.

Source: Justice.Gov