Auction Of Luxury Cars Seized During Benicia Solar Scam Investigation Nets $8.2 Million
WOODLAND (CBS SF/AP) -- A U.S. Marshals auction of a collection of 148 classic, performance and luxury vehicles seized during the investigation of a $1 billion Benicia solar energy investment scam sold for a combined $8.2 million, federal officials said Monday.
A Marshals' Service spokesperson said a 2018 Prevost Motor coach brought in the highest bid at more than $1 million with a 2015 Honda dirt bike garnering the lowest bid at $400.
A 1978 Firebird previously owned by Burt Reynolds and the replica of the car the late actor drove in "Smokey and the Bandit" sold for $181,000.
The two employees of a Benicia solar energy company -- certified public accountant Ronald Roach and general contractor Joseph Bayliss -- have pleaded guilty to participating in what federal prosecutors say was a massive scheme that defrauded investors of $1 billion.
While the company's owners have not been charged in the case, they agreed to let the government auction their car collection of classic.
It was the largest single-owner car collection ever auctioned by the Marshals Service. Chief Deputy U.S. Marshal Lasha Boyden of the Sacramento office called it "a stunning collection of vehicles" that also includes classic 1960s Ford Mustangs, 1990s Humvees and a 1960 Austin-Healey.
Roach and Bayliss admitted to providing false reports that misled investors of DC Solar, owned by Jeffrey and Paulette Carpoff of Martinez.
The owners have not been charged with any crime, but their vehicles and numerous other assets were seized by the federal government as part of the investigation.
Lauren Horwood, a spokeswoman for the U.S. Attorney's Office in Sacramento, said the Carpoffs agreed to allow the vehicles to be auctioned off because it was expensive to store them and they lose value the longer they sit idle.
The auction proceeds will go back to them if they are never convicted, but the proceeds will go to the victims if they are convicted and forfeit their belongings.
The Carpoffs' attorney, Malcolm Segal, said the couple have been cooperating with prosecutors.
"Mr. and Mrs. Carpoff have authorized the government to sell well over $75 million of their personal real estate, automobiles and other assets in the interest of the investors who may come up short when in time things settle," Segal said.
Prosecutors alleged that the company engaged in $2.5 billion in investment transactions between 2011 and 2018, costing investors $1 billion in a classic Ponzi scheme.
The company based in Benicia, northeast of San Francisco, made solar generators mounted on trailers and marketed them as able to provide emergency power for cellphone companies or to provide lighting at sporting and other events.
However, purportedly to improve tax benefits, the investors never actually took possession of the generators, authorities said. Instead, they would lease the generators back to DC Solar, which would then provide them to other companies for their use.
The investors were supposed to be paid with the profits, but authorities say the generators never provided much income. Instead, prosecutors say early investors were paid with funds from later investors.
Roach, of Walnut Creek, admitted preparing financial documents to hide the pyramid scheme, and faces up to 10 years in prison when he is sentenced in January. He also pleaded guilty to securities violations.
Bayliss, of Martinez, admitted to preparing false reports showing thousands of solar generators that were sold to investors on paper but in fact did not exist.
He also admitted flying to Las Vegas to destroy evidence after federal investigators served search warrants at the company's headquarters and other locations in December. He faces up to five years in prison.
© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report
