CA lawyer should serve nearly 25 years in prison for role in solar scam, feds say
AI-generated summary reviewed by our newsroom.
- Prosecutors seek 294-month sentence for lawyer tied to $1B DC Solar fraud.
- Lauer pleaded guilty to 23 counts; prosecutors call him a key legal player.
- DC Solar resold the same generators and misrepresented leases, sparking fallout.
A disbarred lawyer who helped run a $1 billion solar energy scam that snagged investors as sophisticated as Warren Buffett should serve nearly 25 years in prison, federal prosecutors in Sacramento say.
Ari Lauer is set to be sentenced Monday for assisting high-flying East Bay fraudsters Jeff and Paulette Carpoff and their company, DC Solar, pull off what the government says amounted to the largest criminal fraud scheme ever within the sprawling federal court district that includes Sacramento.
Lauer pleaded guilty in October to 23 counts of fraud. He was the last of eight defendants to admit guilt in the scheme, which involved selling phony investments in solar generators to companies and prominent individuals, as well as a tax fraud scheme through the Benicia-based company.
Lauer’s license to practice law was revoked Dec. 29, California Bar Association records show, and an out-of-office message from his email account says his Walnut Creek law firm was closed that day.
“Ari Lauer brought extraordinary skill as a sophisticated corporate lawyer in a sophisticated tax scheme to facilitate an extraordinary crime, the largest criminal fraud case in Eastern District of California history,” prosecutors Audrey Hemesath and Nicholas M. Fogg said in a sentencing memorandum filed late Wednesday. “Without the participation of Lauer, the DC Solar fraud scheme would never have gotten off the ground.”
DC Solar started out with a real business idea, but when that went sour, its leaders resorted to deception to keep it afloat, with prosecutors referring to the scam as a Ponzi scheme.
Along the way, DC Solar’s owners accumulated more than 150 exotic sports cars, a now-defunct Minor League Baseball team and multiple vacation homes. The company also served as a major sponsor for a NASCAR team, resulting in its name and logo being featured on several of its drivers’ cars, and secured naming rights for a NASCAR Xfinity Series race at Las Vegas Motor Speedway: the “2018 DC Solar 300.”
The company did make some solar generators, which were supposed to be mounted on trailers for use in a variety of locations. But they essentially sold the same generators repeatedly to companies that were then led to believe the equipment was being leased out for use by subcontractors.
When the scam fell apart amid regulatory and legal scrutiny late last decade, the resulting scandal rocked the nascent green energy sector, coming several years after another California firm, Solyndra, collapsed after receiving a half-billion-dollar loan guarantee from the federal government.
Seven other defendants have already pleaded guilty in the case, including the Carpoffs. Jeff Carpoff, 55, who admitted guilt in 2020, is serving a 30-year sentence in the Victorville Federal Correctional Complex, records show. Paulette Carpoff, 51, is serving 11 years in the women’s prison there.
‘The last person to acknowledge guilt’
Only Lauer refused to plead guilty early on, a decision prosecutors highlighted in their memorandum. As a result, he was the only one to be formally indicted in the case, and was set to go to trial before he pleaded guilty to all allegations against him.
“As the only attorney on the inside, he should have been the first person to say that the conduct was fraud and put a stop to it,” Hemesath and Fogg said in the memorandum. “Instead, he is the last person to acknowledge guilt, only doing so on the eve of trial, and disputing the magnitude of his conduct in these sentencing proceedings.”
Lauer, who has been out of custody on his own recognizance awaiting trial, did not participate in all criminal elements of the scheme, but was nonetheless a key player, Hemesath and Fogg said. He was in near-daily contact with Carpoff and Ron Roach, an accountant who is set to be sentenced next month.
The memorandum also details two former employees who came to Lauer with concerns about the company’s ethics and operations, only to be rebuffed.
“From early on, Lauer had a complete understanding of the DC Solar business model, including the lack of third-party lease revenue at the heart of the fraud scheme,” the prosecutors wrote. “He also had intimate knowledge of the terms of each of the individual deals.”
In one situation, DC Solar had just closed a tax equity deal with the paint company Sherwin Williams. But the company had not built the generators it had offered as part of the deal, Hemesath and Fogg said.
Instead, Carpoff told an employee to rearrange the generators so that it looked like there were more of them. The employee “confronted Caproff, told him he would end up in prison if he continued doing what he was doing, and quit.”
Lauer, the memorandum alleged, negotiated a severance package with the employee, during which he accused the employee of extortion, the memorandum said. He ignored the warning about fraud, the prosecutors said.
Feds recommend 24 years in prison
Lauer, who was 59 when he was indicted in October 2023, faces up to 30 years in prison and fines ranging from $250,000 to $1 million for each of the 23 counts in the indictment.
Prosecutors are recommending that the Lafayette resident serve a total of 294 months, or 24 years and six months.
Lauer, who did not immediately respond to The Sacramento Bee’s request for comment, plans to dispute elements of the prosecution’s arguments as well as the lengthy proposed sentence, the memorandum indicates.
“The government acknowledges that this is a very long sentence, particularly in light of Lauer’s age,” they wrote.
Hemesath and Fogg, though, said a long sentence was necessary given the magnitude of the fraud.
