California lawyer indicted in huge DC Solar fraud scheme

A Bay Area lawyer who served as outside counsel to the scandal-plagued DC Solar company has been indicted by a federal grand jury in Sacramento on charges that he conspired in the firm’s massive Ponzi scheme to lie to banks and investors.

Ari Lauer, 59, of Lafayette, faces charges of conspiracy to commit wire and bank fraud, bank fraud, and wire fraud affecting a financial institution, according to the 18-page indictment unsealed Tuesday.

Lauer was scheduled to be arraigned Tuesday afternoon. Martha Boersch, the attorney listed in court records as representing him, did not immediately respond to a request for comment.

Lauer already is facing a lawsuit filed in September 2022 by the Securities and Exchange Commission alleging that he engaged in fraud and aided and abetted DC Solar owners Jeffrey and Paulette Carpoff in their scheme, which officials say cost investors nearly $1 billion.

DC Solar, based in Benicia, touted its ability to make solar powdered mobile generators that could be leased by major firms to gain huge tax incentives.

But federal officials say the company was part of a massive Ponzi scheme that led to the conviction of the Carpoffs and other company officials and the seizure and auction of a huge exotic automobile collection and numerous properties from Jeffrey Carpoff, a former auto mechanic.

Prosecutors say Carpoff used money from the scheme to buy a fleet of 150 exotic sports and antique cars, a collection of vacation homes that included a $5.3 million Caribbean villa, an interest in a Napa Valley winery and the Martinez Clippers baseball team.

Jeffrey Carpoff, 51, was sentenced in November 2021 to 30 years in prison — the maximum possible — and ordered to pay more than $790 million in restitution.

His wife, Paulette, 48, was sentenced to 11 years and three months.

The indictment unsealed Tuesday says Lauer worked for DC Solar from 2009 through January 2019 and conspired with the Carpoffs and other company employees to deceive banks and investors about the true state of DC Solar’s finances.

The indictment says that in February 2014 Lauer suggested in an email to Carpoff and another official that they could use screenshots of financial data to fool a bank into believing demand for the generators was higher than in reality, the indictment says.

“Even if this data isn’t real, the screenshots would make it look more real,” the indictment says Lauer wrote in the email.

Officials say the DC Solar fraud was the largest fraud case in the history of the Sacramento-based Eastern District of California.

“Between March 2011 and Dec. 18, 2018, investors collectively invested approximately $759,400,000 and several financial institutions and other investors transferred collectively $152,700,000 to DC Solar as part of related transactions for the purchase and lease of generators,” U.S. Attorney Phil Talbert’s office said. “In total, DC Solar closed transactions with investors that contributed an aggregate of more than $912 million to purchase generators.

“Those transactions purportedly involved approximately 17,000 generators, at approximately $2.5 billion in purported value. During the conspiracy, approximately 94% to 95% of the supposed lease revenue on the books was actually inter-company transfers disguised as new investor money.”

In reality, Talbert’s office said, “demand for generators never exceeded 5% of the revenue that was claimed.”