Robert A. Karmann, DC Solar CFO Sentenced to 6 Years in Prison for Billion
Dollar Ponzi Scheme
April 13, 2022
Robert A. Karmann, 55, of Clayton, was sentenced today to six years in prison
and ordered to pay $624 million in restitution for participating in a
billion-dollar Ponzi scheme involving DC Solar, U.S. Attorney Phillip A. Talbert
According to court documents, Karmann was a certified public accountant (CPA)
that DC Solar hired first as its Controller in 2014, and later as its Chief
Financial Officer. DC Solar manufactured mobile solar generator units (MSG),
which were solar generators that were mounted on trailers. The MSGs were sold to
investors who were given generous federal tax credits, and who were falsely led
to believe that there was extensive demand from third parties to lease these
MSGs to create a revenue stream. In fact, that demand was virtually
non-existent. DC Solar had instead become a fraud scheme that took new investor
money to pay older investors, using circular transactions that were fraudulently
disguised to look like real third-party lease revenue.
According to court documents, Karmann and the other co-conspirators, including
company founder Jeff Carpoff, carried out an accounting and lease revenue fraud
using the Ponzi-like circular payments. Carpoff and others lied to investors
about the market demand for DC Solarís MSGs and its revenue from leasing to
third parties. Then Karmann, Carpoff, and others covered up these lies with
techniques including false financial statements, false operation reports, and
false written summaries of the supposed revenue from leasing MSGs to third
parties. In 2016, 2017, and 2018, Karmann oversaw the hidden circular transfers
of funds, delivered false financial information to another co-conspirator for
use in tax returns and tax documents, provided false compiled financial
statements to an investor representative for multiple funds, and provided other
false information to investor representatives about DC Solarís third-party
leasing. Karmann also directed others in DC Solarís accounting department,
including one subordinate whom Karmann told to ďmake it upĒ when responding to a
customer request for location reports on their MSGs. During these years that
Karmann knowingly joined in the fraud, DC Solar pulled in over $600 million in
investor funds as a result of this scheme.
On Nov. 9, 2021, Jeff Carpoff was sentenced to 30 years in prison and ordered to
pay $790.6 million in restitution for conspiracy to commit wire fraud and money
laundering. His wife, Paulette Carpoff, 47, has pleaded guilty to conspiracy to
commit an offense against the United States and money laundering, and is
scheduled to be sentenced on May 10, 2022.
On Nov. 16, 2021, Joseph W. Bayliss was sentenced to three years in prison and
ordered to pay $481.3 million in restitution for securities fraud and conspiracy
in connection with the DC Solar scheme.
defendants have pleaded guilty to criminal offenses related to the fraud scheme
and are scheduled for sentencing: Alan Hansen, 50, of Vacaville, is scheduled to
be sentenced on April 26, 2022; Ronald J. Roach, 54, of Walnut Creek, is
scheduled to be sentenced on May 3, 2022; and Ryan Guidry, 44, of Pleasant Hill
is scheduled to be sentenced on June 7, 2022.
This case is the product of an investigation by the Federal Bureau of
Investigation, IRS Criminal Investigation, and the Federal Deposit Insurance
Corporation Office of Inspector General. Assistant U.S. Attorneys Christopher S.
Hales and Kevin C. Khasigian are prosecuting the case.
Paulette Carpoff, Hansen, and Guidry face a maximum statutory penalty of 15
years in prison. Roach faces a maximum statutory penalty of 10 years prison. The
actual sentences, however, will be determined at the discretion of the court
after consideration of any applicable statutory factors and the Federal
Sentencing Guidelines, which take into account a number of variables.