DC Solar, a Ponzi scheme that scams Warren Buffett and other investors

The FBI accused DC Solar, the solar generator company founded by Jeff and Paulette Carpoff (husband and wife), of basically set up a Ponzi scheme, paying back earlier investors with the funds received from new investors. According to Reuters, Jeff Carpoff pleaded guilty to money laundering and conspiracy to commit wire fraud, while Paulette Carpoff pleaded guilty to money laundering and conspiracy to commit an offense against the United States.

Berkshire Hathaway, an American multinational conglomerate holding company that has Warren Edward Buffett as chairman and CEO, invested US$340 million in DC Solar. Other companies involved in the Ponzi scheme are, among others, insurer Progressive Corp, which recorded a US$156 million loss, and Southern Californian bank East West Bancorp., which lost a US$7 million.

Authorities determined that DC Solar had sponsored fraudulent funds that totaled almost US$1 billion. Prosecutors informed that from the year 2011 to 2018, DC Solar entered US$2.5 billion deals to sell mobile solar generators. But finally half of the 17,000 generators did not exist and the solar company used false financial statements and lease contracts to conceal the fraud. US Attorney McGregor Scott last week said, according to the Financial Times: 

"This billion-dollar Ponzi scheme hurt investors and took money from the United States Treasury. Today's guilty pleas send a strong message that fraudsters will get caught and will pay for their crimes. You can run, but you cannot hide."

According to sources, Jeff and Paulette Carpoff, owners of the solar company, spent about US$140 million in investor cash on, among others, 25 properties in places like Las Vegas and Lake Tahoe, a luxury suite in the Las Vegas Raiders' new stadium in Nevada, and at least 90 vehicles (including a US$1 million Ford Mustang).