Former California exec sentenced to prison for $1 billion fraud

Warren Buffett's Berkshire Hathaway Inc. was one of the companies suckered into the scheme

Former California exec sentenced to prison for $1 billion fraud

Six years in federal prison and $624 million in restitution.

That’s what a former energy executive in California was sentenced to serve on Tuesday, after participating in a $1 billion solar power fraud, The Associated Press reported.

Robert A. Karmann was the chief financial officer for DC Solar, a company based in the San Francisco Bay Area that sold mobile solar generator units mounted on trailers. Between 2011 and 2018, the company advertised the generators as being able to provide emergency power for cellphone companies or to provide lighting at sporting and entertainment events.

However, DC Solar executives told investors they could benefit from federal tax credits by buying the generators and leasing them back to the company, which would then provide them to other companies for their use, prosecutors said. The company ran a Ponzi scheme, in which early investors were paid with funds from later investors, prosecutors said. Furthermore, at least half the company’s claimed 17,000 generators didn’t really exist, prosecutors said.

Read more: Ex-Amazon employee sentenced to prison for involvement in bribery scheme

Among the victims of the scheme was Warren Buffett’s Berkshire Hathaway Inc.

DC Solar founder Jeff Carpoff was sentenced in November 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 has pleaded guilty to federal charges and will be sentenced in May.

Prosecutors said the Carpoffs used the money to buy and invest in 32 properties, more than 150 luxury cars, a subscription to a private jet service, a semipro baseball team, a NASCAR racecar sponsorship and a suite at the new Las Vegas Raiders stadium.

There has been a string of fraudulent activity among company leaders in recent months.

The former operations manager of Networks 2000, a San Diego-based tech support firm, was recently sentenced to two years in federal prison for embezzling more than $350,000 from the company. In August 2021, Matthew P. Hernandez pled guilty to four counts of wire fraud after stealing hundreds of thousands of dollars in cash and luxury gifts, including international flights, tickets to Coachella and a hot tub, with the company’s credit card, then attempting to cover up the purchases, The San Diego Union-Tribune reported.

In February, the United States Attorney for the Southern District of New York and the New York office of the Federal Bureau of Investigation (FBI) announced federal court charges against a former director of accounting and HR who allegedly stole more than $500,000 from her former employer.

That same month, California resident Rohit Kadimisetty was sentenced to 10 months in prison and fined $50,000 after pleading guilty to conspiracy in September 2021. He was one of six people indicted for fraud and the first to be sentenced in an international scheme to manipulate the Amazon Marketplace, according to the Department of Justice (DOJ). The group allegedly bribed Amazon employees to gain an advantage on Amazon Marketplace.

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