The Securities and Exchange Commission has brought charges against a couple for orchestrating a $1 billion ponzi scheme involving alternative energy tax credits.
Unfortunately, that couple isn't Elon Musk and Grimes.
Instead, it's California based Jeffrey and Paulette Carpoff. The SEC alleges that the couple raised about $910 million from 17 investors between 2011 and 2018 by offering securities in the form of investment contracts through their two solar generator companies, C Solar Solutions and DC Solar Distribution.
The couple is also being charged in a parallel criminal case by the U.S. Attorney’s Office for Eastern District of California.
The SEC complaint states that "The Carpoffs allegedly promised investors tax credits, lease payments, and profits from the operation of mobile solar generators. In reality, the complaint alleges, most of the generators were never manufactured, and the vast majority of the purported lease revenue paid to investors in fact came from new investor funds."
It is also alleged that the Carpoffs "arranged for investors to receive false documents, including financial statements, lease arrangements, and generator certifications" and that "throughout the scheme, the Carpoffs siphoned off investor funds and used at least $140 million of investor money to fund their lavish lifestyle, which included 150 luxury and sports cars, dozens of properties, and a share in a private jet service."
Daniel Michael, Chief of the Enforcement Division's Complex Financial Instruments Unit said: "While the Carpoffs' pitch to investors seemed new and innovative, their alleged fraud was old and simple. This case is a reminder that fraudsters often try to lure investors by associating themselves with trendy technologies."
Like electric powered cars?
Regardless, the SEC charges the couple with violating the antifraud provisions of the federal securities laws and seeks injunctive relief, disgorgement, and civil penalties
We highlighted this couple back in summer of 2019, noting that among those ripped off was Warren Buffett, who was taken for a cool $300 million. In 2016, new investor money accounted for $50 million of the company's claim of $55 million in revenue, according to a former employee.
“Within a short time, we were doing over $60 million in sales,” Jeff had told Inc. magazine in a December 2018 interview.
It's also worth noting that in addition to interviewing Carpoff, Inc. magazine has also recently featured both Elon Musk and Elizabeth Holmes on its cover.