Key figure in DC Solar fraud case gets 3-year sentence after spilling to investigators

After the FBI raided the DC Solar offices in Benicia in December 2018 in what would turn out to be the largest federal fraud case in the Sacramento region’s history, company owner Jeff Carpoff called an old friend he first met in an auto shop class in high school.

Carpoff’s instructions to Joseph Bayliss were clear: buy a burner phone, and get to DC Solar’s warehouse in Nevada to destroy 1,000 vehicle identification stickers, evidence there that could show the company was selling mobile solar generators that had already been sold to other customers.

“Bayliss did as Carpoff instructed, scraping off approximately 200 replacement VIN stickers and destroying at least another 1,000 VIN stickers stored in boxes in the warehouse,” court documents say.

By October 2019, Bayliss agreed to plead guilty to a single count of conspiracy to commit an offense against the U.S. government and cooperate with prosecutors.

And, on Tuesday morning in a federal courtroom in downtown Sacramento, Bayliss, 46, learned the price for helping his old friend: a 3-year sentence and an order to pay more than $481 million in restitution.

Carpoff was sentenced last week to a 30-year sentence in the case, which prosecutors say cost investors nearly $1 billion as the company sold the same mobile solar generators over and over again to investors because it could not keep up with demand for the devices, which were used to supply electricity at concerts, racetracks and elsewhere and which provided lucrative tax credits to investors.

His wife, Paulette, was scheduled to face sentencing this week in a case that could net her up to 15 years, but that has been pushed back to March.

Meanwhile, the smaller fish in the scam are getting their days in court, and U.S. District Judge John A. Mendez was left asking Tuesday why there was such a great disparity between what he gave Carpoff and the three years prosecutors were recommending for Bayliss.

“He’s in the middle of this fraud, couldn’t have been done without him,” the judge said to Assistant U.S. Attorney Christopher Hales.

Hales answered that of the seven DC Solar defendants who have pleaded guilty, Bayliss was the first to step forward and offer to tell investigators everything about the rogue company.

“Though it’s a big disparity, it’s not unwarranted,” Hales said.

Bayliss is an electrician, although DC Solar passed him off as a licensed engineer who completed reports claiming he had tested and inspected mobile solar generators that actually never existed, eventually being paid $1 million for the work, court records say.

Bayliss attorney Tom Johnson told the judge his client was a key figure in exposing the DC Solar fraud.

“It is true that sometimes a single stone, if removed from a dam, causes the dam to breach and flood, and that’s exactly what Mr. Bayliss was, the single stone,” Johnson said.

He described his client as a “mope from Pinole” who went from fixing lights at DC Solar to being a key figure and finding himself consorting with the ultra-wealthy Carpoffs, who had a collection of 150 exotic vehicles and a NASCAR sponsorship.

“He was perfect for Carpoff,” Johnson said. “All of a sudden he was made to feel important... Yes, there’s a disparity.

“One’s an electrician, a mope from Pinole, and one’s a NASCAR owner.”

Before he was sentenced, Bayliss apologized to the judge and the victims, calling himself a “despicable human being” who believed Carpoff’s promises that if they kept the business going - which by then was a Ponzi scheme - the investors could be made whole.

“I’m really sorry for all the things I’ve done along the way...,” he said. “He made it sound like they were going to make it.”

In addition to Bayliss and the Carpoffs, four other defendants have pleaded guilty in the scam and await sentencing.

This story was originally published November 16, 2021 at 11:51 AM.