Jeff Carpoff is a mechanic, who repairs cars duped the world’s richest investors of 1 billion US dollars. He dared to do this openly while living in a country like America. He neither ran away with a loan nor did he rob a bank, rather he earned all this money by selling solar panels. His planning was so dangerous that even the world’s big industrialists got trapped in his trap. But what did he do? Who was that person who trapped even the big investors in his trap and how did his secret come out? I will tell you in this article. So let’s begin.
5) Idea
36-year-old Jeff Carpoff of California started a car repair business with his wife. In which both of them used to earn a living for their children as mechanics, but after some time their business came to a halt and now it had become difficult for them to feed their children. Jeff was obsessed with wealth, so he kept doing something or the other to fulfill his dream, but failure was always his fate.
When his financial condition became very bad, he started selling drugs so that he could feed his children. Slowly, he started getting into debt and it became difficult to pay the house rent and other bills. He did not find selling drugs to be a good option to do all this. Now he started trying to find a job and finally he got a job as a solar panel salesman. He used to hold meetings with people all day to sell solar panels and because of this he kept getting a chance to know people’s feedback.
After some time, he realised that people are interested in buying solar panels but they are afraid that their solar panels may get stolen. Jeff Carpoff could make a lot of money by eliminating people’s fear. Because now he had got a solid idea. He thought why not do something that can keep people’s solar panels safe. If these panels are fixed on a truck and after using them for the whole day, those trucks are taken to a safe place at night, then this can be a good option.
4) Plan Set Up
The plan was very good but there was one issue that Jeff Carpoff was uneducated. That is, he did not have the technical knowledge of how to make this plan successful. So he contacted his brother in law who was a mechanic. After some time of hard work, both of them prepared a mobile solar generator. It was composed of a frame. Underneath which tires were attached and on top of this frame solar panels were fixed. After using the solar panels, they could be locked again and taken to a safe place.
On the other hand, portable diesel generators were also available in the market. These generators worked like Jeff’s mobile solar generator. The only difference was that Jeff was using solar energy. The market for portable generators was 3 billion US dollars. Neither Jeff nor his brother-in-law had any idea about how to compete in this market or how to attract people from diesel generators to solar generators.
Luck was kind to them. A customer named Watson used to come to their car repair shop. Who himself was a software professional. When Watson came to know about Jeff’s invention, he offered him to form a company. The company was named DC Solar. Watson and his team also joined it. Who started handling the marketing department.
3) Success
First of all, instead of targeting the general public, he thought of doing something bigger. He first targeted Hollywood. Because at that time diesel generators were used on movie sets. Which used to create a lot of noise. In this condition, DC Solar Company’s mobile solar generators could have been a good option. His plan was succeeding and his solar panels started being used on the sets of many big films. In 2009, a famous American actor and film producer shared the picture of these solar panels on Facebook, which promoted his business.
On the other hand, Jeff Carpoff started meeting big businessmen and started building his own network. He never left without telling about his company in public gatherings. Soon Jeff joined hands with the world famous law firm Nixon Peabody. During this time, the American Congress passed a law in which the tax credit on the value of investment was tripled. Which meant that any business that buys solar panels for itself will get 30% of the money back. That is, if any company invests to buy solar technology, the government will pay 30% of it.
This was a double profit for the companies. They could save the cost of electricity with solar panels and could also get 30% from the government. Along with this amazing offer from the government, Jeff’s company DC Solar also brought a new package in the market. In which it was said that now any company can buy solar panels from them by paying only 30% advance and the remaining 70% can be paid in installments. DC Solar’s offer was so amazing that no one could refuse it.
In this offer, customers had to pay only 30% to buy solar panels, which they would get back later in the form of cashback from the government. The remaining 70% had to be given to DC Solar in installments, which they could easily pay by saving electricity bills. That is, people could install solar panels with 0 down payment. This was a good offer due to which the network of DC Solar started growing rapidly.
2) Fraud
In 2011, Jeff Carpoff was present in the stadium to watch a baseball match. When suddenly he got a message that the famous paint company Sherwin Williams has ordered 192 mobile solar generators. This was Jeff’s biggest order. The total amount of which was 29 million dollars. Apart from this, an American bank was working on tax reduction and job creation and it wanted to work together with DC Solar. Jeff prepared fake documents and through fake statistics, convinced the American bank that the demand for solar generators is increasing a lot. Due to which he became the first financial partner of American Bank DC Solar.
The plan of the American bank was that it would buy solar generators from DC Solar and lease them to people. Due to which the pressure of tax and electricity bills on people would be reduced. Till here everything was going well but from here onwards the situation started getting worse. The solar generators that were installed on the movie sets started having problems and they would stop repeatedly. Because Jeff and his brother-in-law had prepared these without any knowledge and the surprising thing was that they used Google for information. Now gradually complaints from customers started coming.
When Jeff Carpoff started earning so much money, he started having fun and his attention was diverted from work. Now he started talking lie to customers. Preparations for 192 panels of paint company Sherwin Williams were also going on carelessly. Jeff was busy in his fun and enjoyment, he also bought a new house and a new car. When people did not start getting orders on time, no company was ready to lease these generators for 5 to 10 years and without long leases, DC Solar could not pay returns and lease payments to its old investors.
Jeff and his team made another plan. They secretly made a new scheme that the lease payments of new buyers would be used to give returns to old investors. Apart from this, by declaring itself a solar company, he was also taking millions of dollars from the government treasury in the guise of tax credit. That is, DC Solar was taking the tax money of the American people through fake documents and data. Now it was the turn to make this scheme practical. For this, Jeff was looking for new investors. So that money could be taken from the new investors and given to the old ones.
Jeff Carpoff would show fake data to every investor to make it appear that generators are being sold in large numbers. For this work, he would send generators from one place to another without any reason. So that investors would feel that the demand for generators is very high and some delivery or the other is happening all the time. In this way, investors would consider this work profitable and would be ready to invest in it. By doing such acts, Jeff also cheated the Shell company and grabbed 76 million dollars from them.
Now the company had become a scammer to satisfy the investors. Actually, the generators were not being sold and the company was not receiving cash from the public. But money was being taken from investors continuously. Jeff was looking for more big investors. He was lucky that Valley National Bank wanted to buy a solar generator worth 76 million dollars and had asked for a list of such companies which provide solar generators on lease or rent. DC Solar Company’s name was also in that list. It was written about which they give 80% of their generators on rent. Whereas in reality this number was only 5%.
Valley National Bank also became a victim of this fraud. Similarly, Jeff Carpoff also trapped the famous insurance company Geico in his clutches. This company is a branch of Berkshire Hathaway. Whose owner Warren Buffett is counted among the richest people in the world. But here the question arises that how did such a big company get deceived. For this also Jeff used great cleverness. He bribed an employee of America’s largest telecommunication company T-Mobile and got him to sign a fake document. In which it was said that T-Mobile is taking 1000 generators on lease from DC Solar for the next 10 years.
When you have companies like T-Mobile in your portfolio, it becomes easy for other companies to trust you. Geico also signed a 3-year agreement. In which 8000 generators were to be purchased and its cost was 1.2 billion dollars. Geico also benefited from this deal initially because they were saving 30% i.e. 377 million dollars in tax. But in reality, their money was being used to give returns and lease payments to old investors. Whereas Jeff’s enjoyment was at its peak. He had also bought many villas, cars and private jets.
1) Investigation
In 2014, for the first time, IRS Internal Revenue Service tried to investigate the company, then DC Solar’s legal representative convinced IRS in every way and saved DC Solar. After a few years, an employee of DC Solar exposed the company. Due to which the Security Exchange Commission and Federal Bureau of Investigation started investigating the matter and Jeff Carpoff was arrested when the fraud was proved.
In the investigation, it was found that Jeff Carpoff was running a Ponzi scheme under the guise of selling generators. That is, he was taking money from new investors and giving it to old ones. Such Ponzi schemes run only for the first few years. But as soon as the number of new investors decreases, then the problem begins. In this condition, the owners of the company run away overnight or the owners of the company are caught. Jeff ran a Ponzi scheme worth millions of dollars in a country like America.
He had made a total of 17000 solar generators but only on paper and investors were shown fake GPS trackers to show that so many of our solar generators are running in the market. Whereas in investigation it was found that those GPS trackers were actually not on the generators but were buried in the ground at different locations. On 9th November 2021 Jeff Carpoff was sentenced to 30 years and sent to jail. Along with this, his wife and five more people were also sentenced for being associated with this scheme.
List Points of Jeff Carpoff’s Story
- Idea
- Plan Set Up
- Success
- Fraud
- Investigation
