The Billion-Dollar Ponzi Scheme That Hooked Warren Buffett and the U.S. Treasury

Illustrations by Maxime Mouysset

Updated at 10:01 a.m. ET on May 11, 2023

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Jeff Carpoff was a good mechanic. But as a businessman, he struggled. In the two decades since high school, he’d lost one repair shop after another, filed for personal bankruptcy, and watched a lender foreclose on the small house in a California refinery town where he’d lived with his wife and two young kids. By 2007, he was 36, jobless, and adrift.

Yet there, at his life’s lowest, the remarkable happened. A contraption he’d rigged up in his driveway—a car trailer decked with solar panels and a heavy battery—got the attention of people with real money. Carpoff could scarcely have imagined it. He’d never gone to college and had no experience in green technology. His invention, he thought, was “crazy, harebrained.” But investors saw the makings of a clean-energy revolution.

For decades, there was basically one way to rush power to places without electricity: the portable diesel generator. It kept equipment running and lights on at construction sites, outdoor events, movie sets, disaster zones. But diesel generators ate the ozone layer; warmed the planet; and caused smog, acid rain, and possibly cancer, on top of their noise, smell, and fuel cost.

Carpoff’s machine—a solar generator on wheels—was a sun-fueled alternative. He called it the Solar Eclipse. The design was so simple that it was a wonder no one seemed to have thought of it before.

Carpoff was a paunchy man with blue eyes and apple cheeks—a “big chipmunk,” as a colleague called him—who gulped rather than spit his chewing tobacco and spent Sundays watching NASCAR. In March 2011, he was singing the national anthem at a local baseball game when he got a text that he’d made his first major sale: The paint company Sherwin-Williams had bought 192 of his generators, for nearly $29 million. Twenty-nine frickin’ million. It reduced him to tears.

That’s how Carpoff told the story of the day his life changed.

The millions of dollars in that first deal were like the drips before a downpour. Over the next eight years, blue-chip corporations such as U.S. Bank, Progressive Insurance, and Geico would buy thousands of Carpoff’s generators. Inc. magazine would call his company, DC Solar, a “renewable energy powerhouse” with a product “people clearly needed.” The Obama administration would make DC Solar a partner—alongside Amazon, Alphabet, and AT&T—in a national program to enlist tech in the fight against climate change.

Sales would eventually top $2.5 billion, enough for Carpoff to fly by private jet and purchase a baseball team, more than a dozen houses, and a collection of muscle cars looked after by a guy named Bubba.

Onstage at a company Christmas party, as he neared the peak of his spectacular ascent, Carpoff celebrated the way he often did: with another tequila. “Fill that fucker up,” he said as an executive poured him a glass of Herradura Silver, with a stack of limes on the side. “All the way to the top.”

Carpoff had lived almost his whole life in the small city of Martinez, on Northern California’s industrial Carquinez Strait—“the place,” he liked to joke, “where the sewer meets the sea.” His childhood home, about a mile from the city’s Shell Oil refinery, overlooked a biker bar, which Carpoff described as a hangout for marauding Hell’s Angels. “We seen things as a kid that a kid just shouldn’t see,” he recalled in footage that DC Solar’s videographer, Steve Beal, played for me. “Fights, stabbings, shootings, prostitution—all kinds of just really crazy stuff.” Jeff’s mother, Rosalie, remembered the bar as at worst a little noisy. But her son was always a storyteller, she told me, prone to embellishment “to make people feel sorry for him or laugh.”

Rosalie worked three jobs to support Jeff and his older sister. (She and his dad, Ken, divorced when Jeff was 3.) But Jeff couldn’t wait to make money of his own. As a boy, he polished used tires for 10 cents apiece, fixed junk cars, and stocked shelves at the corner liquor mart. For fun, he popped wheelies in his truck in the Alhambra High School parking lot, splattering mud on teachers’ cars.

After graduation, state officials rapped him for mishandling hazardous materials at a garage he’d opened, his father said. Jeff had a meth addiction, which made things worse, and soon he was selling the drug to pay debts to dealers, he told people. “I was getting phone calls threatening me because he owed money,” Rosalie said.

His luck seemed to turn after he married Paulette Amato, his high-school sweetheart. She had helped him get clean, and around 2002, in