Scamfluencers - The Solar-Powered Scammer

Episode Date: February 5, 2024

When Jeff Carpoff starts a business making portable solar generators, it becomes an instant hit among big corporations, Hollywood studios, and deep-pocketed investors. They think they’re getting a good deal on green energy – and a huge tax credit to go along with it. But Jeff’s clients don’t realize that he’s been playing them. And when he flies too close to the sun, it’ll blow the fuse on his whole operation. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wondery Plus subscribers can listen to scam influencers early and add free right now. Join Wondery Plus in the Wondery app or Apple podcasts. Wondery Plus Sachi, have you ever gone out of your way to buy specific products because they're supposedly good for the environment? Not really. I think climate change-wise, I'm just ready to go. Okay, but what if I told you you could get a huge tax break for buying those products

and it didn't even matter whether you use them or not? Tax break! That changes everything! Well, that's the premise of the story I'm about to tell you. It's about a scammer who loves classic cars, NASCAR, and basically all things powered by oil, but still made tons of money by peddling the promise of green energy. It's a Monday morning in December, 2012,

and John Miranda is excited to go to work. John's in his late 40s, and he's got a nerdy, earnest vibe. He wears thick black glasses, and his collared shirts are always rumbled. Today is John's first day as a communications director of a buzzy green energy startup called DC Solar. They've only been around for a couple of years, but they already have deals with big clients like the paint company Sherwin Williams. And their portable solar power generators have been used on the sets of Hollywood movies like Inception. John is passionate about fighting climate change,

and he believes in DC's solar's mission. He pulls up to the company's parking lot in Benisha, California, a suburb of San Francisco. But he's surprised by what he sees. An office worker is changing the oil of a muscle car parked in a handicap spot. And he's surprised by what he sees. An office worker is changing the oil of a muscle car, parked in a handicap spot. And he's especially surprised later, when he learns that car belongs to his new boss, DC Solar CEO, Jeff Karpoff. That's right, the head of a renewable energy company

drives a gas guzzler. Jeff looks and acts like a Danny McBride character. He's tall and hefty, with hair he pushes up at the front, and one of those goatee-type beards that goes all the way around his mouth. Sachi, take a look at this photo of him. Uh, yeah. Nine to five guy Fiatty. I see it. Yeah. Jeff's the kind of guy who swallows his chewing tobacco instead of spitting it. He loves NASCAR and the American flag. But more than anything, he loves classic cars. He has a whole collection,

including a Dodge Charger painted like the General Lee from the Dukes of Hazard and a 70s trans-am that was once owned by Bert Reynolds. At first, John tries to shrug off all the contradictions, but eventually, the cognitive dissonance becomes too hard to ignore. One day, the company is filming a promotional video, and Jeff can barely say his lines. So, he takes a shot of tequila to loosen up, but it doesn't help much. Actually, it probably makes things worse. Sachi, can you read what he says? Yeah, he says,

we strive for a healthier planet by offering unique solar products that... Fuck! I can't remember! What the son of a bitch? Okay, I'm sorry. I am immediately on board. He's like, wait, what does my company do? And as John watches his boss struggle to explain his company's mission,

he starts to realize that this guy might not care about the environment at all. He just likes being rich and in charge. From the outside, DC Solar looks like a billion dollar company committed to clean energy. But its business is based on a lie. For one thing, the generators don't really work. For another, the company has been also writing checks they literally can't cash. DC Solar claims to be creating eco-friendly power,

but it turns out the only thing they care about is generating power for themselves. Hello, I'm Alice Levine, and I am one of the hosts of British Scandal. So I want you to imagine that you're being offered £500,000 to introduce someone to your ex. I mean the answer is still no. So you shake hands and agree to do it. But it's all about to get a hell of a lot more complicated because the you in this story is Fergie, the Duchess of York, XY for Prince Andrew and the person who's offered you half a million pounds is an undercover tabloid reporter who's recorded the whole conversation. Oh and just one more thing, promise last one, it's all about to appear on the front page

of the news of the world. In the later season of British Scandal we take you inside the story of the so-called fake shake, the investigative journalist Mazem Amoud, and the series of explosive sting operations he used to con public figures. From Fergie to singer Tleesa and former England football coach Sven Grøren Ericsson. Follow British Scandal wherever you listen to podcasts, or listen early and ad-free on Wondry Plus, on Apple podcasts or the Wondry app. Honestly, a million pounds and I still wouldn't introduce you to him. And that's for your sake.

Wondery's new podcast, Dis and Tell, wades into the glorious mess of celebrity beef. Each episode explores a different iconic celebrity feud and asks, what does our obsession with these feuds say about us? Follow Dis and Tell wherever you get your podcasts. You can listen ad-free on the Amazon Music or Wondery app. From Wondery, I'm Sarah Haggy Turn my speakers to a love and I feel like a legend If things hadn't gone horribly off the rails, Jeff Karpov might still be running a multi-million dollar business

For a while, he had plenty of help Not just from his buddies, but from loopholes in the American tax code To me, the wildest part of the scam is how much of it was legal until it wasn't, and how many huge companies were willing to go along with it, even when the truth was staring them right in the face. I'm calling this one the solar-powered scammer. Jeff Carpoff is born in 1971 and grows up in Martinez, California, a sleepy Bay Area city. He later describes it as where, the sewer meets the sea.

He lives a mile from a shell oil refinery and later claims his bedroom overlooks a biker bar where he watches late night brawls. His dad isn't in the picture and his mom works three jobs to support him and his older sister. Money is always tight. He claims he feels obligated to get a job so he can afford to pay for basic things, like his own bed. As a teenager, he polishes used tires and restock shelves at a liquor store, even though he's still too young to drink. He's floundering, jumping from one after-school job to the next. But when he joins an auto repair program in high school, he finally finds his calling. Around this time, when Jeff is 17,

he finds himself drawn to something besides cars, a girl named Paulette Amato. She's just 14 years old, but Jeff later recalls that he's instantly attracted to her. And she's more grown up than anyone he's ever dated. She lives at her grandma's house and essentially has to parent her two younger brothers and her own parents who are going through some hard times. Okay, for the sake of your story, I'm not going to dwell on their ages, but it is stressing

me out a little bit. Well after Jeff graduates in 1989, he spends a few years working as a mechanic at auto shops and used car lots. He's determined to rise up the ranks and make a decent living. He takes on freelance clients, fixing up cars in his own driveway,

and eventually saves enough to open his own garage. Jeff and Paulette marry in 1994 when she's 20 and he's 23. She's short with a round face and auburn hair that falls around her shoulders. She looks tiny next to Jeff, who's hulking and broad-chested, but she has a powerful presence.

Finally, Jeff has the kind of life he's always wanted. He's got a partner he can count on and a stable job doing something he loves. But things go downhill when Jeff and Paulette get approached by someone who wants to buy their auto repair business. They think it's a good deal, and they hand over the business

after just a single down payment. But when the buyer defaults on his payments, Jeff and Paulette are stuck holding the bag. They fall deep into debt and file for bankruptcy in 1998. Over the next few years, Jeff and Paulette tried to rebuild their lives together. By the early 2000s, they have a son and a daughter, and they've also given birth to a new auto shop. They call it Rover Land USA. Jeff becomes known around the Bay Area

as the go-to Land Rover guy. But after just a few years, Jeff gets tangled up in some bad business dealings once again. He and a friend decide to spend all their money buying up cheap car parts from Mexico. They plan to start a business reselling them, but it turns out the parts are so bad that even one of Jeff's

own employees won't use them. Again, Jeff can't recoup his investment on the car parts, and his business goes under. Pretty soon after, he and Paulette default on their mortgage. It doesn't sound like Jeff is great at business, despite doing it a lot. It seems like he's good at running the day-to-day, but not really making choices, I guess. Yeah, it's like he's making bad investments over and over again. Things are pretty rough for a while.

But then one day in 2007, Jeff has a conversation that changes his life. He's talking to his neighbor who's building a vacation house. The neighbor wants to power his new place with solar panels, but he's worried that someone might steal them off the roof when he's not there. So Jeff has an idea. What if there was a trailer covered in solar panels

powering the house instead? That way, his neighbor could roll it into the garage or hitch it to his truck and drive it home with him. Jeff draws a simple trailer design on a napkin. He doesn't know it yet, but this little sketch is going to make him incredibly rich. It's 2008, about a year after Jeff comes up with this trailer idea. By now, Jeff actually has a prototype and he's ready to show it off to potential investors, like Dave Watson. He's a Silicon Valley software consultant,

the type of guy who wears a fleece vest everywhere he goes. He and his friends are looking for new technology to invest in, which means they're used to getting pitches in stuffy boardrooms. But today, they're huddled in a parking lot to see something different, an invention by the guy who used to fix Dave's car. Dave and Jeff met a while back when he got his car repaired at Rover Land, and they've kept in touch even after the shop closed.

The last time they talked, Jeff told Dave about his mobile solar powered generator. Dave thinks it's a compelling idea. They could be used in places where there's no other way to get power like remote disaster relief areas or movie sets. Most generators are diesel powered. They burp out ugly black smoke, and they're awful for the environment.

Dave knows that if someone could actually build a workable solar power generator, they could turn a serious profit. The U.S. government is offering all kinds of money to green energy companies, and he wants an on it. Despite being a nihilist, this does sound like a really good invention if they can get one that doesn't spew out black tar every time you use it. Yeah, I mean, it actually is a good idea. And when David and his friends see Jeff's new gadget in the parking lot,

it looks pretty straightforward. It's a trailer with some solar panels on it. Fun fact, when Jeff eventually files a patent for this thing, he literally calls it trailer with solar panels. But it also has a few bells and whistles. Like he's attached the panels to rotating beams, which means he can catch the sun as it moves. Dave and his buddies talk for a few minutes.

Then they give Jeff the good news. They want to invest. They lend Jeff almost $400,000 and set up a company to help sell his new invention. Dave even comes on as VP of sales. With this seed money, Jeff is ready to grow his new business and get his life back on track. And he's about to meet someone whose vision is bigger than anything

he could have imagined. It's 2010, two years after the parking lot meeting. A lawyer named Forrest Milder is sitting in his office in Boston. Forrest is a middle-aged guy with a ginger beard and professor vibes. He kind of looks like Walter White before he breaks bad. He's a big-time tax lawyer who's been working in the field for 30 years. He's got degrees from Boston University,

Harvard, and MIT. He also practices a very specific type of law at his firm, Nixon Peabody, helping corporations maximize tax credits. And he's really good at what he does. He bills clients $900 an hour just for advice, or at least he used to. Since the recession, Nixon Peabody has been struggling. Forrest Sposs has started telling his employees to try new strategies for drumming up business,

like offering free consultations to potential clients. So when one of Forrest's friends offers to hook him up with a small business owner named Jeff Karpoff, Forrest is immediately interested. And when he looks up Jeff's company, which is now called DC Solar, he's impressed by what he sees. Their solar-powered generators have made their way onto Hollywood film sets.

Leonardo DiCaprio is a huge fan and has been talking about them in interviews. He says he's pushing the CEO of Warner Brothers to use more solar power, which could mean more trailers and more business. Forrest also knows there are huge tax incentives for businesses to invest in green technology. They can get back a full 30% of the money they spend on things like solar generators. Together, Forrest and Jeff figure out a strategy for attracting big corporate buyers. They know that these buyers are primarily looking for tax breaks and don't necessarily even need the generators. So DC Solar decides to offer them a deal.

If a corporate buyer puts up the initial funding to order and build generators, DC Solar can then lease them out to people who actually want to use them. At sporting events, film sets, and anywhere else, the money they make off the rentals will get split between DC Solar and the corporate buyers. That sounds a little convoluted to me. Yeah, it's a confusing plan, but corporate investors aren't asking a lot of questions. All they need to know is that they'll break in a lot of money, and it's nearly risk-free. Companies that buy these generators don't even need to use them if they don't want to.

They just pay for the generators, let DC solar rent them out, and when their loan is paid off, sit back and collect money. And all the while, they get to brag about their investment in renewable energy. Obviously, Jeff loves the idea. He even tells Forrest that they should value the generators

at $150,000 each, which is 50% higher than the price he initially proposed and more than 10 times what the generators are actually worth. He thinks clients will be attracted to the higher price tag because it means they'll get a bigger tax credit. Forrest is skeptical about this at first, but eventually gives in. And Sachi, it actually works. They start pitching the deal around to different companies, like the insurance company Progressive and East West Bank. And a lot of them are very interested.

Between Jeff's great invention and Forrest's brilliant tax scheme, this unlikely duo is about to launch DC Solar into the stratosphere. But Jeff is about to learn that even at a solar energy company, you can fly too close to the sun. A short while later, in March of 2011, Jeff's at a baseball game, at least according to his retelling of this fateful day. He's singing his favorite song, The National Anthem,

when Forrest confirms they've just closed their biggest deal yet. The paint company Sherwin-Williams is going to buy 192 generators from DC Solar for $29 million. Jeff is over the moon. Forrest sales pitch worked even better than he expected. for $29 million. Jeff is over the moon. Forest sales pitch worked even better than he expected. When they were working out the details, Forest emailed Jeff to tell him that executives

at Sherwin-Williams were super pumped about the deal. He wrote that they seemed to not care whether there was any due diligence. By the way, Sherwin-Williams denied this characterization to the Atlantic, saying that it relied on purported experts on green energy tax credits. The company warned against, quote, blaming the victims rather than the professionals who enabled this fraud.

Anyway, this deal brings in a ton of money for Jeff, and he adjusts his lifestyle to match pretty much immediately. Like, he pays more than a million dollars in cash for a mansion on the tallest hill in his hometown of Martinez. I always feel worried when real estate is a metaphor. And I feel like this is a metaphor. Yeah, all through the spring and summer,

Jeff pulls up to work in his bright red pickup truck, blasted in a bitching version of, you guessed it, the national anthem. He parks it in a spot at the office that's marked with a sign reading, J-M-F-C. It stands for Jeff Motherfucking Carpoff. And in a very sweet gesture, he has a separate PMFC sign made for his wife, Paulette,

aka Paulette Motherfucking Carpoff. Ugh, that's so romantic. I can't even get a text back. Ladies, if he's not making a custom sign for your parking spot, it's not love. That's a beautiful adage. I'm going to put that on a pillow. Well, everything is going amazing for Jeff, except for one tiny little detail. The generators don't actually exist.

Despite the sudden infusion of millions of dollars, DC Solar is way behind on production. They're still a small company, and they're punching way above their weight with this deal. Jeff later claims that he's just a mechanic in over his head, trying to keep up with the staggering demand for the trailers. His lawyers describe it as a leasing deficiency. But here's the thing. Executives from Sherwin-Williams are supposed to visit DC's solar office in the fall to

take a look at all the new equipment they bought. And instead of coming clean about the leasing deficiency and figuring out how to scale up production, Jeff starts lying. He lines up the generators they do have so that the finished ones are right at the front. All the unfinished ones are hidden in the back. And you know what? This bold strategy also pays off. Even though nearly two-thirds of the generators Jeff puts on display for this visit are broken

or unfinished, the deal goes right on through. DC Solar might have come a long way from something Jeff drew on the back of a napkin, but the company is still pretty sketchy. They've been hiding their broken machines, broken promises, and a huge mess that no one is ready to fix. Hi, I'm Anna. And I'm Emily. We're the hosts of Wanderer's podcast Terribly Famous, a show where we bring you outrageous true stories about our most famous celebrities. Our latest season is all about the catwalk queen Naomi Campbell. The years Naomi had to fight to be treated fairly in an industry that was overwhelmingly white.

That drive saw her break down barriers and reach the pinnacle of high fashion. But it also got her into some dangerous situations when it spilled over into an anger she couldn't control. In our new season Naomi Campbell's Model Behavior we tell the story of how a young girl from South London became a trailblazing black icon but had some very public falls of how she stood up to the British tabloids and won and the lengths she had to go to to be the first black woman in history to make the cover of French Vogue. But she risks losing it all when her explosive behavior lands her in court.

Follow Terribly Famous Wherever You Listen to podcasts or listen early and ad free on Wondery Plus on Apple Podcasts or the Wondery App. I'm Afua Hirsh and I'm Peter Frank-Apen and in our new podcast Legacy we explore the lives of some of the biggest characters in history. This season, we delve into the life of Pablo Picasso. The ultimate giant of modern art, everyone has heard of or seen a Picasso work, or the Picasso brand on something. But a man with a complicated, difficult,

personal side too that makes us look at his art in a different way. He was a genius, and he was very problematic. Follow Legacy Now wherever you get your podcasts. You can binge entire seasons of Legacy ad-free on Amazon Music or by subscribing to Wondery Plus on Apple Podcasts or the Wondery app. And I feel like a legend.

It's been about a year since Jeff and Forrest closed the big Sherwin-Williams deal. DC Solar managed to make it past that first inspection without anyone realizing they didn't have enough generators. But now, Jeff's got a whole new problem. The generators that he does have kind of suck. They short out all the time. A group of entrepreneurs thinks about using them at disaster relief sites. Then they test a generator and it trips the circuit breaker after plugging in a single hair dryer.

So Jeff comes up with another brilliant solution. He starts attaching backup diesel generators to some of the trailers. They cough out huge clouds of smoke just like the old generators they're supposed to be replacing. It's not exactly the eco-friendly image that renters are paying for. Yeah, this sounds like the opposite of what everybody wanted. Well, word starts getting around and pretty soon, no one wants to rent the generators, which means DC Solar isn't making enough money to pay back their corporate buyers.

Jeff and Forrest are on the hook for millions of dollars. They've promised huge returns to the clients who bought their generators, and that money is going to come due really soon. They need to come up with a solution fast. So in the summer of 2012, they call in DC Solars outside council, a lawyer named Ari Lauer and their accountant,

Ronald Roach. Ari runs his own law firm in the Bay Area and has been working with DC Solar for the past three years. Ronald, meanwhile, is a new recruit to the team. He's a tall, unassuming guy with a gawky frame and mousy brown hair that's graying at the edges. Honestly, he looks way more normal than his name would suggest. Together, Jeff, Ari, and Ronald come up with a new plan.

According to court documents, they decide to make it look like their generators are in high demand, even though, again, they decide to make it look like their generators are in high demand. Even though, again, nobody wants to rent them. They do stuff like shuffle money around from one bank account to another and pretend it's a payment from an investor. All of their make-believe actually pays off yet again.

They keep selling generators to corporations who are impressed by all their supposed rentals. Then they say that the money is coming from new leases and use it to pay back what they owe on their older deals. They call it re-renting the generators. But Sachi, if this plan sounds familiar, that's because it's basically a Ponzi scheme with a twist. As long as they can pull it off, DC Solar's biggest clients will still get

those huge tax credits and the American taxpayer will keep footing the bill. This sounds like Enron but dumber. This is like stupid Enron. You know what? It sure does. And for about a year, the scheme seems to work. But then DC Solar gets an ominous letter from the IRS. They want to audit the Sherwin-Williams deal. Forrest and Jeff are completely shaken. For some reason, they seem to think that their scam is too new for the government to have taken notice. Forrest, the professional tax lawyer, actually sends Jeff an email asking, is this even old enough to be audited?

Apparently the answer is yes. So they thought that because they were only doing fraud for a little bit of time, they couldn't be audited. Yeah, and what they were gonna do by the time their business was old enough to get audited, I do not know. But a government investigation still isn't enough to keep DC solar from pulling new tricks. In February 2014, about seven months after they get hit

with their audit, Ari emails Jeff and Ronald with a genius idea. He says that they should use doctored screenshots to show potential investors that their generators are in high demand. Can you read what he writes them in an email? Yeah, he writes them in an email? Yeah, he writes,

even if the data isn't real, the screenshots would look more real. Um, okay, I guess that math checks out. Okay. And Ari goes on to tell one of DC's Solar's clients that quote, the demand far exceeds what we can build between now and 2016.

We believe the market will bear another 10,000 units based upon existing demand. Again, this is total bullshit, and the client, which is a bank, can smell it. So they ask to see specifics on DC Solar's leasing information. Ari doesn't have it, so he emails Ronald and Ronald sends him back a report showing their leases payment history over the past two years. This report does not look good. It shows that just 5% of DC's solar's generators have been leased out. It's pathetic, especially considering that Jeff has been telling his investors that 80 to 90% of them are leased. I always think it's interesting

when the fraud is just lying. It's like so unimaginative, you know? Well, the boys of DC Solar are all freaking out. If their investors find out how badly they've been failing, it could torpedo everything. And even worse, if the government finds out, DC Solar could lose its tax credit eligibility, the key to this whole scam.

In his email to Ari, Ronald literally refers to their predicament as a high wire act. And that act is only going to get tougher to pull off. A few months later, Jeff hires a new guide to oversee the company's books. His name is Rob Carman, and he actually went to high school with Ronald. He's been struggling with alcohol, and he's been having a hard time holding down a steady job. But what Rob lacks in experience, he makes up for it in enthusiasm. Over the course of his time at the company, he becomes a guy in charge of creating documents with, let's say, less than truthful numbers about how many generators

the company's leased out. Jeff rewards his loyalty. He keeps promoting Rob until he's literally the company's CFO. At a DC solar holiday party, Jeff reportedly even makes a toast to him, calling him a guy who, quote, gets shit done. Which is true, like if an investor wants to know where their generators are, Rob tells the accounting department to, quote, make it up. At this point, he's still in full denial

about all the fraud he's participating in. When he later gives an interview to a website called whitecollaradvice.com, he says... I wasn't ready to accept full responsibility. I wasn't ready to understand my role and I was making excuses then and justified things. Rob isn't the only one doing criminal shit for Jeff. When clients want to come see the generators in person, Jeff's employees

literally sand the old VIN numbers off the generators they do have. These acetone to remove the old residue, then they put on new fake stickers. And if a really nosy client wants to track the generators they've bought, Jeff has his employees go out and put GPS devices in remote locations. Then he gives his data to his clients and tells them the trailers are way out in some hard toreach place. If all that still doesn't work and someone really insists on seeing a generator in real life, employees have to pull all-nighters, basically making sure the generators work

and delivering them to their owners. Another example of the scam actually being a lot of work. Yeah, it's a lot of effort to keep up the scam, but the corporations making money off it don't ask a lot of questions. The deal is still too good for most clients to pass up. And Jeff's about to land one of his biggest deals yet. All he has to do is not screw it up.

DC Solar's re-renting scheme has gotten so vague and the team so thirsty that lots of new clients can tell something's off. At one point, Jeff almost blows a massive deal with Geico for nearly 8,000 generators, which would net them hundreds of millions of dollars that DC Solar desperately needs by asking if they can fast-track their payments.

GeicoCFO later says this is the moment he knows something's up. He actually tells his execs if there's a way out of this deal, take it. Yeah, I mean, I would also want to get out of a deal if it started to seem like the company I made a deal with didn't have any money. But there's still clearly enough incentive for lots of other new clients to come on, like Berkshire Hathaway, which is owned by billionaire Warren Buffett. They start investing with DC Solar in 2015 and eventually sink $340 million into the company.

But it doesn't seem like DC Solar has enough cash to pay back all their big investors, because Jeff makes a drastic move. He offers one of his employees a million dollars to drop a fake deal with T-Mobile along with another million dollars for any employee willing to sign it. They find a disgruntled former manager willing to do it. That guy quits his job and starts working at DC Solar where he makes 60% more than what he made at T-Mobile. And guess what? Even though almost none of the generators actually exist, the guy code deal actually goes

through too. We don't know if Jeff succeeds in making the company look legit or if the tax credit money is just too good to pass up. Jeff is making money and he's making waves. The only thing he isn't making is real generators, or at least not enough to dig him out of his hole. And pretty soon, at least one branch of the US government is going to figure that out. In April of 2016, Forrest gets a draft of the IRS audit report, and the findings are not good. The IRS literally calls DC Solar a sham.

Sachi, can you read this quote from the report? It's about one of the deals DC Solar set up with a corporate client. I would love to. It says, upon examination, the IRS determined that the loan was a mere circular movement of money used to prop up a vastly overstated purchase price in order to impermissibly maximize the energy credit. Wow, what a formal and yet very mean thing to say about this completely fake business and so precise and exact.

That's exactly it. In other words, they know the only thing this company actually makes is bullshit. But DC Solar's corporate investors still have no idea about any of this. And the thing that happens next, Sachi, is almost unbelievable. Just a few weeks later,

the Obama White House selects the company to join something they're calling the Smart City Challenge. It's a program where the federal government picks companies to send new, eco-friendly technology to struggling American cities. DC Solar pledges $1.5 million worth of generators and equipment. In a press release, U.S. Transportation Secretary Anthony Fox calls it, quote, an exciting new partnership.

I feel like now is the time for one of those thanks Obama jokes, but like a sincere one. Truly it is. It is. Somehow DC Solar has managed to partner with the literal government of the United States, while a different part of the same government has realized they're pulling off an enormous scam. It's pretty amazing that Jeff has been able to manage this balancing act for as long as he has. But things at DC Solar are about to get even crazier.

And like the exhaust from the back of a diesel fuel generator, Jeff's empire is going to go up in smoke. The BedMGM app is your go-to for Super Bowl excitement. Watch Super Bowl 58 with a Vegas vibe you'll only find at BedMGM Sportsbook. Visit bedmgm.com for terms and conditions. Must be 19 years of age or older to wager. Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex, Ontario at 1-866-531-2600

to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario. And I feel like a legend. In 2017, DC Solar reports record-breaking sales. The company tells their investors and employees they've sold over 5,000 generators and made nearly $750 million.

They've also got new digs to prove it. About a year earlier, DC Solar moves into a brand new office just across the bay from Martinez. The office is lined with security cameras. Jeff's wife, Paulette, walks around with two Belgian melanoids. They're named Diesel and Foo.

Here's a picture of Foo with Paulette. He's trained to attack people on command. He looks like he's being held hostage. This dog is a man in a dog costume. He's so big. Yeah, he's the size of a small horse and he looks like he just wants to be set free. Yeah. By this time, DC Solar has also started sponsoring NASCAR races and leasing out equipment to

its race tracks. The optics are great. DC Solar's generators are so popular that they're being used by race car drivers. Jeff uses a steel to drum up more business for DC Solar. But he hides the fact that this contract is a joke. It says that NASCAR only has to pay for the generators if DC Solar dumps tons of money into sponsoring and advertising for them.

Even though Jeff is effectively losing money on these generators, he's still throwing tons of cash around, literally. Employees say he pulls stacks of $100 bills out of his pockets during meetings and gives it to whoever can guess how much money he's carrying. He and Paulette buy a box at the Raiders Stadium in Vegas and invest in a winery in Napa Valley. They buy real estate in places like the Caribbean in Mexico

and the subscription to a private jet service. And Jeff returns to his childhood roots. He buys a baseball team and an ice skating rink for his hometown of Martinez. He also pours huge amounts of money into his first love, cars. By now, he's got roughly 150 of them, including a handful of Chevy pickups from the 1970s, a bunch of gangster era Cadillacs, and for some weird reason, nearly two dozen Dodge Rams. In the middle of all this crazy spending, Jeff and his inner circle are clearly getting nervous. They've started moving millions of dollars into offshore bank accounts, and they buy a $5 million house

in the tax haven of St. Kitts and Nevis. They call it the Sea Grape Villa. The sale happens to make them eligible for a government program that grants citizenship to homeowners. They reportedly even asked their office manager to take photos for new passports that they want to have fast-tracked.

And they're right to be paranoid. They don't know it yet, but one of their former employees went to the SEC in July. And there aren't enough attack dogs in the world that can protect them from what's coming next. In December, 2018, about four months after Jeff and Paulette purchased Sea Grape Villa, they throw a huge company party, and they even hire Pitbull to perform.

The day after that, Jeff goes on Twitter and posts a photo from the holiday concert, calling it epic. He writes, quote, Thank you to all the people that work hard to make my dreams a reality. Had a fantastic time celebrating with my team. But the good times are about to come to an end. Because two days after that, DC Solar is rated by the FBI, the IRS, and the US Marshall Service.

One team ransacks DC Solar's headquarters. When Jeff calls the office and hears that the agents have taken his and Paulette's brand new passports, he yells, oh fuck, and hangs up. Agents find almost $2 million in cash in the office. When they search Paulet's purse, they find another $18 grand. Sarah, is it a crime to have $18,000 in your purse that you stole. Is that really a crime?

No, it's in cash. How do they know where she got it from, right? If it's in cash, it doesn't count. That's girl math. Exactly. And the other team goes to Jeff's house and finds, among other things, a warehouse filled with his massive car collection.

About nine months later, the US attorney films a video of Jeff's car collection. Here he is listing out types of cars. Big work trucks, muscle cars, small little putt putt cars, an amazing collection that should prove a great value to people interested in purchasing them. But when they try to start them, the agents learn that almost none of the cars have any battery power. Those cars aren't the only things that are totally out of juice. Jeff may have managed to keep this crazy scheme going for years,

but he's finally run out of road. Just a couple days after the FBI raid, Jeff calls a high school buddy turned employee named Joseph Bayless. Joseph has been writing all those fake vehicle inspection reports. Jeff tells Joseph to meet him in a Burger King parking lot. Nothing good ever happens in a Burger King anywhere. Well, when they meet, Jeff tells Joseph to buy a burner phone, head to the warehouse where DC Solar has been keeping all their fake

vinn stickers, and destroy everything. He also tells him to keep his mouth shut when the feds come calling. But that plan only works for so long. Eventually, there's too much evidence for even Joseph to deny. In October 2019, he pleads guilty to conspiracy to commit an offense against the federal government, Soda's Ronald Roach, who slapped with an additional charge of securities fraud. Two months later, Rob, DC Solar's CFO, pleads guilty to the same conspiracy charge,

plus a charge of aiding and abetting money laundering. Finally, in January 2020, the carpoughs themselves fessed up to their crimes. They both plead guilty to money laundering, among other charges. When all is said and done, the SEC says that DC Solar made almost $3 billion from deals and took in more than $900 million

from investors. And the US attorney says that the government was robbed of $1 billion in tax revenue. Even actual billionaires were swindled. Warren Buffett's investment firm, Berkshire Hathaway, blamed DC Solar for a $377 million loss in the first quarter of 2019. At his sentencing hearing,

Jeff tries to defend himself by saying, he could have never come up with a tax evasion scheme on his own. He actually tells a judge that DC Solar was just on the verge of being able to pay its clients back. I believe him. I believe him. Okay, sure.

Yeah, he could have paid them back a million times with all that money. And the judge snaps back that Jeff is selling air. He's sentenced to 30 years in a medium security prison in Victorville, California. He's also ordered to pay almost $800 million back to his clients.

The government ends up recouping $8.2 million just by selling Jeff's precious car collection. Paulette gets 11 years and three months in prison. Despite the letter Jeff writes to the judge pleading for a softer sentence. It ends with the words sent for my iPhone. Ronald and Rob each get sentenced to about six years in prison.

Joseph, who cooperated with the feds, gets off with a three year sentence. Ari, the outside counsel, is indicted on federal charges in October of 2023. He pleads not guilty. A bunch of DC Solars former clients also get together to sue everyone involved in the scheme, including Nixon Peabody.

They deny wrongdoing and settle for an undisclosed amount. Forrest was never charged. And actually he's still giving out tax advice. He writes a monthly column about renewable energy for a journal about tax credits. Sachi, at the end of the day, no two Ponzi schemes are really alike, you know? A Pon reflection from this entire story,

it just sounds like they had a bit of an idea. They saw how maybe it could work. Instead of doing it, they didn't do it, but they did lie to everybody about doing it, and then they got caught. It's really so simple in how dumb it is. Honestly, I do feel like we both believe this could have worked if they had more time maybe. Yeah.

Or weren't scammers. And I feel that there are kind of a few scams where I'm like, you know what, if they just had a bit more time, could have figured it out. Actually, one of my former coworkers really believed that Theranos could have worked if they just gave her like 10 more years. I mean, I don't know that that's true, Sarah. I think it's like these are nice ideas and they're good concepts and they would be wonderful if they worked, but then they didn't do it.

If my grandmother had wheels, she'd be a bike. I believe that with time, anything can be possible. That is not true. It has not borne out for most things that we talk about needing time. The reality of the situation is that, like this should have been another one of Jeff's failures. I mean, it is.

It wasn't for a very long time. He, like, you know what? The way I see it, it's like, he had years of living a life that very few people on earth get to experience. And his payment for that is 30 years in prison. Yeah, man. If you live well on the backs of others, you will live poorly later. Yeah. And you know what? Maybe the trade-off was worth it for Jeff. Who knows?

Would it be worth it for you? No, absolutely not. I'm all about being okay forever. Yeah, I just want things to be like a C plus forever. I'm good with that. Yeah, things don't need to be amazing, but I don't need, you know, tragedy either. I'm able to take a walk, get a coffee. Like that's enough for me, you know? I'm a simple girl. It seems like today's lesson is people should be happy with the mediocrity that they already have.

Yeah, like you lived where the sea met the sewer in your own words, but you have the sea. You have the sea. Why don't I appreciate the sea in front of you? Must you dwell on the sewer? I'm gonna put that on a poster. That's our new merch. Don't dwell on the sewer when the sea is in front of you. add free on Amazon Music. Download the Amazon Music app today,

or you can listen ad-free with Wondery Plus and Apple Podcasts. Before you go, tell us about yourself by completing a short survey at wondery.com slash survey. This is the Solar Scammer. I'm Sarah Hagee, and I'm Saachi Cole. If you have a tip for us on a story that you think we should cover,

please email us at scamflincers.wondery.com. We use many sources in our research. A few that were particularly helpful were the billion-dollar Ponzi scheme that hooked Warren Buffett and the U.S. Treasury by Ariel Sabar in The Atlantic, The Dream Was Empty, Green Energy Scams, Target Celebrities, Seniors and Do-Gooders by Margie Lundstrom for Fair Warning and NBC News, and Sam Stanton's reporting for the Sacramento Bee. Emma Healy wrote this episode. Additional writing by us, Sacha Cole and Sarah Hagee. Sarah Eni is our story editor and producer,

and Eric Thurm is our story editor. Backchecking by Gabrielle Drolet. Sound design by James Morgan. Additional audio assistance provided by Adrian Tapia. Our music supervisor is Scott Velazquez for Freesong Sync. Our coordinating producer is Desi Blalock, and our managing producer is Matt Gant. Jeanne Cornelow and Stephanie Jens

are our development producers. Our associate producers are Charlotte Miller and Lexie Peary. Our producers are John Reed, Yasmin Ward, and Kate Young. Our senior producers are Ginny Bloom and Jen Swan. Our executive producers are Jenny Lauer-Beckman, Marshall Louie, and Erin O'Flaherty for Wondery. You're getting closer. You can feel it in your whole body. The fear. Calculating every detail. Heart racing as you move to the front of the line and tap to pay. We understand. When you're in debt, everything looks different, like the fear of the cost of buying anything.

At Farber Debt Solutions, we can help you see things the way you did before you were in debt. Farber Debt Solutions, licensed in Solvency Trustees, get the truth about debt.