Robert A. Karmann, 55, a certified public accountant, was hired by DC Solar, a company based in Benicia in the San Francisco Bay Area that manufactured mobile solar generator (MSG) units—solar panels mounted on trailers—as its controller in 2014. He later became the company’s chief financial officer.
According to the Justice Department, the MSGs were sold to investors who were “given generous federal tax credits” and who were falsely made to believe that the demand from third parties to lease the MSGs was huge and would create a fortune.
Instead, DC Solar was a fraud scheme that used money from new investors to pay off older investors, and the Ponzi scheme utilized “circular transactions that were fraudulently disguised to look like real third-party lease revenue,” the DOJ stated.
According to court documents, Karmann and his co-conspirators, which included company founder Jeff Carpoff, took part in the scheme, lying to investors about the demand for DC Solar’s MSGs and its revenue from leasing to third parties. From 2016 to 2018, they used false financial statements, false operation reports, and false written summaries of the supposed revenue from leasing MSGs to third parties to cover up their lies, according to prosecutors.
“Karmann also directed others in DC Solar’s accounting department, including one subordinate whom Karmann told to ’make it up' when responding to a customer request for location reports on their MSGs,” prosecutors said.
During the three-year scheme in which Karmann had “knowingly joined in the fraud,” DC Solar raked in more than $600 million in investor funds, according to the DOJ.
In November 2021, 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, also pleaded guilty to conspiracy to commit an offense against the United States and money laundering. She’s scheduled to be sentenced on May 10 and faces a maximum of 15 years behind bars if found guilty.
Another man, Joseph W. Bayliss, was sentenced in November 2021 to three years in prison and ordered to pay $481.3 million in restitution for securities fraud and conspiracy in connection with the Ponzi scheme.
Other defendants living in California—Alan Hansen, 50, of Vacaville; Ronald J. Roach, 54, of Walnut Creek; and Ryan Guidry, 44, of Pleasant Hill—have pleaded guilty to criminal offenses related to the fraud scheme and are scheduled for sentencing at various dates between April and July.
Hansen and Guidry each face a maximum statutory penalty of 15 years in prison, while Roach faces 10 years behind bars.
