California woman receives 11 years in prison for Ponzi scheme

U.S. District Judge John A. Mendez sentenced 48-year-old Paulette Carpoff to 11 years and three months on June 28, according to a statement from U.S. Attorney Phillip A. Talbert. Carpoff pleaded guilty in November to money laundering and conspiracy to commit an offense against the United States.

In November, her husband, Jeff Carpoff, 50, was sentenced to 30 years in federal prison after pleading guilty in January 2020 to charges of money laundering and conspiring to commit wire fraud.

Authorities said the two oversaw a billion-dollar Ponzi scheme.

Jeff Carpoff must pay $790.6 million in restitution. Paulette Carpoff was ordered to pay $661 million, authorities said.

Talbert said the case was the biggest criminal fraud scheme in the history of the Eastern District of California.

Jeff Carpoff owned DC Solar, a company that manufactured mobile solar generator units - generators that used solar panels, mounted on trailers. Jeff Carpoff promoted the generators' ability to provide emergency lighting but lied about their market demand, authorities said.

In his statement, Talbert said Jeff Carpoff "sold solar generators that did not exist to investors, making it appear that solar generators existed in locations they did not, creating false financial statements and obtaining false lease contracts, among other efforts to conceal the fraud."

Authorities claimed 94% of the revenue claimed by DC Solar Distribution from supposed third-party leasing actually came from new investor cash.

Paulette Carpoff controlled the payments and hid the company's lack of third-party lease revenue, authorities said. She also created fake engineering reports for mobile solar generators that the company never built and helped fool investors into thinking that DC Solar was a success, authorities said.

"Paulette Carpoff played an integral part in a massive criminal fraud scheme. Knowing that DC Solar at best could only expect to lease a tiny fraction of its mobile solar generators, she continued the lie about the high demand for DC Solar's products," Talbot said in a statement.

Authorities said they've been able to recoup about $120 million.

Authorities found approximately $18,000 cash in Paulette Carpoff's purse, another $18,000 cash in the master bedroom of the couple's Martinez home, $22,000 cash in a master bedroom safe and $9,000 cash in the Carpoffs' vehicles parked at their residences, when they served a warrant on the couple in December 2018.

Authorities said that Jeff Carpoff also bought Paulette Carpoff the Martinez Clippers, a one-time independent professional baseball team that played in 2019. The two also owned luxury real estate in Lake Tahoe, Las Vegas, the Caribbean and Cabo San Lucas, authorities said.

Five other people also were charged in the scheme.