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149 cars including Teslas and classic muscle cars were seized by the FBI in an investigation into an alleged 'Ponzi-type' scheme. Now they're up for auction.
149 cars including Teslas and classic muscle cars were seized by the FBI in an investigation into an alleged 'Ponzi-type' scheme. Now they're up for auction.
Brittany ChangOct 19, 2019, 18:58 IST
Apple Auctioneering Co.
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A collection of cars seized by the FBI in an investigation is going up for auction on Saturday, October 26.
The 149-car collection includes two Teslas, eleven Plymouth Road Runners, a dozen Chevrolet Camaros, nine Dodge Challengers, and a Pontiac owned by Burt Reynolds.
Victims of the alleged Ponzi scheme include Warren Buffet's Berkshire Hathaway and insurance giant Progressive.
The 149 cars were seized from DC Solar founder Jeff Carpoff and his wife Paulette's home and business in California and Las Vegas in December 2018. The company filed for bankruptcy shortly after, the San Francisco Chronicle reported.
The vehicles are being auctioned off by the United States Marshals Service and Apple Auctioneering Co., a family-owned auction company that "specializes in the liquidation of seized assets for government agencies," according to its Facebook page.
"It is rare for the U.S. Marshals to hold an auction of such a stunning collection of vehicles," Chief Deputy U.S. Marshal Lasha Boyden said in a prepared statement.
The proceeds of the sale will be deposited into the USMS's seized asset account while awaiting further Court orders.
Keep scrolling to learn more about the collection of cars and its history:
...and this 1978 Pontiac Trans Am that Burt Reynolds owned as a memento of the car he drove in the 1977 film “Smokey and the Bandit.”
There will also be nine Dodge Challengers up for auction, including this 1968 Dodge Challenger Super Bee.
And this 1967 Ford Mustang GT500 SE- by Riley Performance M is among seven other Ford Mustangs up for sale.
The FBI originally seized over 160 cars, boats, and motorcycles from the Carpoff couple, as well as millions of dollars in cash from their personal belongings and the DC Solar headquarters.
The couple used the money to splurge on properties such as a Las Vegas mansion, condos in Lake Tahoe, a vacation home in Scottsdale, and cars that are now up for auction.
DC Solar was accused of running an $800 million “Ponzi-type” scheme selling mobile solar generators.
This 1969 Dodge Daytona will also be up for auction. Another example was auctioned off in 2015 for a record-setting $900,000.
Investors included Warren Buffet’s Berkshire Hathaway conglomerate, which invested $340 million in DC Solar.
“In December 2018 and during the first quarter of 2019, we learned of allegations by federal authorities of fraudulent income conduct by the sponsor of these funds,” Berkshire Hathaway stated in its quarterly report to the Securities and Exchange Commission.
“As a result of our investigation into these allegations, we now believe that it is more likely than not that the income tax benefits that we recognized are not valid,” it continued.
Other investors also include Progressive, Sherwin-Williams, and multiple regional banks, Bloomberg reported.
Progressive recorded a $156 million loss in the first quarter, while Southern Californian bank East West Bancorp. took a $7 million hit, the Observer reported.
DC Solar claimed they were making money by leasing the solar generators to end-users and paying investors back with the proceeds.
However, investigators said that more than 90% of the funds DC Solar claimed to be lease revenue was actually money from other investors.
This made the company "appear successful, and the leases appear legitimate, when, in reality, leasing the equipment generated little income and early investors were paid from funds contributed by later investors," according to a federal complaint.
The company claimed it had 12,000 generators in use. In reality, only 3,000 to 5,000 units were actually built, according to the complaint.
Each unit had an up-front price of $150,000. However, federal investigators said the investors typically paid $45,000, and then claimed $45,000 in tax credits on their investments and tax deductions for its depreciation.
"While we completely disagree with the FBI agent's claim that DC Solar was a Ponzi scheme and with any assertion that Jeff Carpoff acted improperly, we have been working closely with the government attorneys to provide resources to reimburse investor companies and banks to try to see that they do not suffer a loss," Malcolm Segal, the Carpoffs' attorney, said in an email to Business Insider in June.
