Federal Deposit Insurance Corporation - Office of Inspector General

Second DC Solar Defendant Sentenced to 3 Years in Prison for Billion Dollar Ponzi Scheme

PRESS RELEASE

FOR IMMEDIATE RELEASE

Tuesday, November 16, 2021

Second DC Solar Defendant Sentenced to 3 Years in Prison for Billion Dollar Ponzi Scheme

SACRAMENTO, Calif. — Joseph W. Bayliss, 46, of Martinez, was sentenced today to three years in prison and ordered to pay $481.3 million in restitution for participating in a billion-dollar Ponzi scheme involving DC Solar, Acting U.S. Attorney Phillip A. Talbert announced.

According to court documents, Bayliss was an electrician that DC Solar hired to pose as a licensed engineer who inspected newly constructed mobile solar generator units (MSG) that were mounted on trailers and were promoted as able to provide emergency power to cellphone towers and lighting at sporting events. The MSGs were sold to investors who were given generous federal tax credits. But in fact, DC Solar had become a fraud scheme that took new investor money to pay older investors. As DC Solar lost vast sums of money with this fraudulent model, the owner of DC Solar, Jeff Carpoff, and other conspirators stopped building the MSGs altogether, selling thousands of MSGs that did not even exist to investors.

According to court documents, Bayliss played a key role in the fraud scheme orchestrated by Carpoff and others. To cover up the fact that no new MSGs were being built, Carpoff provided false reports that newly constructed MSGs had been inspected and tested. In reality, at least half of the approximately 17,000 mobile solar generators claimed to have been manufactured by DC Solar did not exist. From 2016 to 2018, Bayliss personally signed thousands of reports stating that new units had been inspected and tested. He knew the reports were false and he knew they would be used to induce millions upon millions of investor payments. In turn, Carpoff paid Bayliss approximately $1 million. In addition to the reports, Bayliss helped to deceive investors by removing and replacing vehicle identification number (VIN) stickers that were affixed to the MSGs. Finally, after the 2018 search warrants executed at DC Solar, at Carpoff’s direction, Bayliss traveled to a DC Solar warehouse in Nevada and scraped off approximately 200 replacement VIN stickers and destroyed at least 1,000 VIN stickers stored in boxes in the warehouse.

On Nov. 9, 2021, Jeff 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, has pleaded guilty to conspiracy to commit an offense against the United States and money laundering, and is scheduled to be sentenced on March 22, 2022.

Other defendants have pleaded guilty to criminal offenses related to the fraud scheme and are scheduled for sentencing: Ronald J. Roach, 54, of Walnut Creek, is scheduled for sentencing on Feb. 15, 2022. Robert A. Karmann, 54, of Clayton; Ryan Guidry, 44, of Pleasant Hill; and Alan Hansen, 50, of Vacaville, are scheduled to be sentenced on Dec. 14, 2021.

This case is the product of an investigation by the Federal Bureau of Investigation, IRS Criminal Investigation, and the Federal Deposit Insurance Corporation Office of Inspector General. Assistant U.S. Attorneys Christopher S. Hales and Kevin C. Khasigian are prosecuting the case.

Paulette Carpoff, Hansen, Karmann, and Guidry face a maximum statutory penalty of 15 years in prison. Roach faces a maximum statutory penalty of 10 years prison. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

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