Owners of DC Solar Accept Plea Deal, Once a Headache for Berkshire Hathaway
Posted on 08/08/2020
The U.S. Department of Justice has accepted a plea deal from the owners of Northern California’s DC Solar. Jeff Carpoff and Paulette Carpoff pleaded guilty to money laundering and conspiracy for running a Ponzi scheme that cost investors US$ 912 million. Warren Buffet’s Berkshire Hathaway had to write down US$ 377 million due to its investment in a tax credit equity fund that included the scam. Mr. Carpoff could see a 30 year sentence, and his wife, up to 15 years, causing their suite at the new Las Vegas Raiders stadium to go to waste.
Over 7 years beginning in 2011, DC Solar misrepresented the number of solar generators it had, along with other financial information. The couple used their ill-gotten gains to live the lifestyle of the rich and the famous. Mr. Carpoff managed a collection of 150 cars as well as several homes. At one point, DC Solar was a legitimate company, but it ran afoul of the law when it began trying to take advantage of tax credits and paying investors with later investors’ money. Buffet wouldn’t be particularly concerned about the charge, which has already been paid for, since his stake in just one stock, Apple, has returned US$ 35 billion in 2020. Buffet apparently has room to improve when it comes to his picks, though. Investor’s Business Daily notes that Buffet has lost billions in Bank of America (down US$ 10 billion), American Express (down US$ 4 billion), and Coca-Cola (down US$ 5 billion). Apple makes up 45.8% of Berkshire Hathaway’s portfolio.