Lafayette Attorney Indicted on 23 Counts of Fraud in Connection with $1 Billion Ponzi Scheme

Lafayette Attorney Indicted on 23 Counts of Fraud in Connection with  Billion Ponzi Scheme

A Lafayette attorney, Ari Lauer, has been indicted on 23 federal counts of fraud for his involvement in what prosecutors are calling the largest criminal fraud scheme in the history of the Eastern District of California. The scheme, associated with DC Solar, a company involved in a $1 billion Ponzi scheme, was orchestrated by Paulette and Jeff Carpoff. The couple used the illicit gains to fund luxury real estate, luxury cars, a private jet service, and extravagant jewelry.

Lauer, a licensed California attorney, served as outside counsel for DC Solar and provided legal and business advice to the company. DC Solar enticed investors by claiming that their mobile solar generators (MSGs) could provide emergency power to cellphone towers and lighting at large events. The company also highlighted the generous federal tax credits available for investing in green energy.

Investors would purchase the MSGs without taking possession of them, paying a percentage of the sale price and financing the balance with DC Solar. The investors would then lease the MSGs back to the company, which purported to lease them to third parties. However, the scheme operated as a Ponzi scheme, with early investors being paid with funds contributed by later investors.

Prosecutors discovered that approximately 94 percent of the revenue claimed by DC Solar actually came from new investor cash. False financial statements and lease contracts were created to maintain the illusion of a legitimate business operation. Lauer is accused of creating sublease agreements with concealed addendums that were used to defraud investors.

In June 2012, Lauer and Jeff Carpoff allegedly conspired to conceal the lack of third-party lease revenue by implementing a circular payment system known as “re-rent.” This system involved shuffling funds around to deceive current and prospective investors.

Jeff Carpoff has already been sentenced to 30 years in federal prison and ordered to pay $790.6 million in restitution. Paulette Carpoff received a sentence of 11 years and three months. Other co-conspirators, including Joseph Bayless, Robert Karmann, Alan Hansen, Ryan Guidry, and Ronald Roach, have also been sentenced to prison terms and fines.

CrimeDoor
Author: CrimeDoor

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