“Having that pot of money incentivizes this type of behavior,” said Nicolas Loris, an economist at the conservative-leaning Heritage Foundation think tank, commenting generally on tax credits. “Sometimes it’s difficult to catch this behavior because of the intricacy of the way these policies are woven into our energy markets.”
Carpoff didn’t respond to inquiries seeking comment.
“DC Solar Solutions was an innovative, substantial and credible solar-energy business. It manufactured thousands of mobile solar generators, which were examined and physically delivered,” Carpoff’s attorney, Malcolm Segal, said in a statement. “Any allegation that there was a Ponzi scheme or anything illegal about the operation of the business is without merit.”
The FBI and Securities & Exchange Commission have said they were investigating, according to separate February filings. Representatives for the FBI and SEC declined to comment.
Berkshire said it was “more likely than not” that the tax benefits it received from certain investments from 2015 to 2018 were invalid, according to a May filing that didn’t name the sponsor. It later identified that sponsor as DC Solar. The company took a $377 million charge in the first quarter to reverse the tax benefit.
Progressive spokesman Jeff Sibel said the company believes it was defrauded after investing in three funds with DC Solar. The goal was to earn “attractive investment returns” and to support the environment, he said. It also took a writedown of $24.3 million primarily because of the DC Solar investments. Valley National said in a regulatory filing last month it’s coordinating with 10 other investors to investigate the allegations.
Unlikely Background
Jeff Carpoff had come from an unlikely background to end up hobnobbing with financiers. For years he had been an auto mechanic, eventually running a car-repair company, servicing Land Rover and Jaguar vehicles, according to his LinkedIn page. Intrigued by solar, he founded DC Solar more than a decade ago, building a line of generators and light towers. Veering from the usual bets on panels scattered across large farms or atop homes, Carpoff offered portable units rather than diesel generators that could be placed on wheeled trailers.
Among the “early adapters” of the company’s products, Carpoff claimed on LinkedIn, were AT&T Inc. and T-Mobile US Inc. (AT&T said DC Solar was never one of its vendors.)
“Within a short time, we were doing over $60 million in sales,” he told Inc. magazine, in an interview published before reports emerged about the federal raids. And the key was the investment tax credit. It “helped us create a financial model that enabled us to keep growing.”