$1 billion fraud at Benicia’s DC Solar

A former solar company executive pleaded guilty this week to defrauding investors of $1 billion, leaving in the company’s wake a string of lawsuits from buyers, suppliers and fired employees.

DC Solar Solutions, a Benicia firm, made solar generators mounted on trailers that provided event lighting and emergency power for communications companies. It worked with TMobile to power cell phone towers during wildfires, the carrier confirmed. It let Mills College in Oakland use generators free of charge, a college spokeswoman said. It sponsored NASCAR races, according to news reports.

But, after an FBI investigation, the company imploded at the end of 2018. Prosecutors allege DC Solar sold the generators through special funds for investors to get federal tax credits. The company then purported to lease those generators to third parties to generate revenue, little of which it actually made, prosecutors say; instead, they say, early investors were paid with funds from later investors — a classic Ponzi scheme.

The company engaged in $2.5 billion in investment transactions between 2011 and 2018, Department of Justice court filings said. A dozen investors — including Warren

Buffett’s Berkshire Hathaway, which lost about $340 million — lost a total of $1 billion claimed in tax credits.

Ryan Guidry, DC Solar’s former vice president of operations, entered pleas involving the scam and money laundering Tuesday. The 43yearold Pleasant Hill man could face up to 15 years in federal prison.

Three other men, including a general contractor and an accountant, pleaded guilty last year. The company’s owners, Jeffrey and Paulette Carpoff of Martinez, have not been charged criminally but were named in civil lawsuits.

Investigators said the couple spent lavishly — $19 million on a private jet service, some 20 properties, and around 150 expensive cars. The company even hosted rapper Pitbull at a 2018 holiday party. After DC Solar’s demise, the couple authorized the government to sell more than $75 million of their real estate and other assets.

The U.S. attorney’s office in the Eastern District of California said the investigation is ongoing. An attorney for the couple did not respond to a request for comment.

Guidry could not be reached and his lawyer did not respond to request for comment.

The fallout left investors, suppliers who sent products that were never paid for, and employees fired en masse scrambling for restitution, according to lawsuits.

Former Director of Communications John Miranda was quoted in the Martinez NewsGazette in November 2018 saying that the company provided emergency backup power during the Camp and Woolsey fires. A month later, he was fired without warning or compensation, in violation of California law, according to a lawsuit seeking class action status he filed on behalf of himself and other employees in early 2019. Miranda could not be reached and his lawyer declined comment.

California investment firm Solarmore Management Services sued, arguing DC Solar’s business was a “sham” that “wrested over $910 million from innocent purchasers.” Jeffrey Carpoff is listed on Solarmore’s original incorporation documents, but transferred the company to a retired banker, who is now suing Carpoff ’s business DC Solar. A North Carolina company, Green Energy Concepts, alleged in Bankruptcy Court that DC Solar owed it $5.2 million for 923 madetoorder batteries that, if not saved from storage, could become worthless.

Mills College had 12 DC Solar generators — free of charge — for five years as part of a statewide program, Vice President for Strategic Partnerships Renee Jadushelver said in an email. When the company declared bankruptcy, they were picked up from campus a few months ago, she said.

The scheme shows that as investors rushed to claim federal tax credits in the booming solar industry, there was ample opportunity for business — and exploitation. Joshua BuswellCharkow, campaign director for the California Solar & Storage Association, said DC Solar was never a member of the organization. Since DC Solar targeted businesses, “few, if any homeowners were harmed by their lawless behavior to our knowledge,” he said in an email.

But Pacific Gas and Electric Co. has warned consumers to be vigilant about solarrelated scams as offthegrid options become more appealing with looming power shutoffs. Potential scams include calls telling customers they are eligible for a federal tax refund, trying to sell a solar evaluation, or claiming a power shutoff is imminent and asking for personal information.

When considering solar power, the industry association recommends consumers get at least three bids from qualified and reputable statelicensed contractors and do business with members who adhere to ethics and consumer protection codes.

DC Solar’s product — mobile solar generators — can survive power outages and might become more popular, especially for cell phone companies facing pressure from regulators to improve backup power at cell towers that failed during last year’s power shutoffs.

Travis Semmes, owner of Mobile Solar based in Atascadero (San Luis Obispo County), was selling mobile solar generators three years before DC Solar emerged on the market. Semmes said his models had higherefficiency solar panels, larger battery banks, and more versatile attributes.

“I can say we have superior product and we were first to market and we see strong growth in this industry despite the black eye that they have left,” Semmes said. His company serves construction, telecommunications, and residential backup for offthegrid homes.

“The industry is so strong and there’s such demand for our products,” Semmes said.

The Associated Press contributed to this report.