Billionaire Warren Buffet can comfortably lead a lavish life and no one would raise an eyebrow. However, the magnate is known for living frugal, and he has always believed in not increasing your income simply because of an increase in your earning.
The same, however, cannot be said for the Carpoffs. The couple owned an energy company, DC Solar, which the authorities claim is akin to a Ponzi scheme. Warren Buffet had invested in the company, unknowingly funding the lavish life that Jeff and Paulette led.
$340 Million Investment
According to company filings, Berkshire Hathaway (Buffett’s company) invested around $340 million in DC Solar, a company that manufactured and sold solar generators.
Reports coming from Bloomberg indicate that other renowned investors into the business included Progressive, Sherwin-Williams, and a number of regional banks.
Despite the Carpoffs’ lawyer maintaining that the couple ran a legitimate business, the FBI has accused DC Solar of defrauding its investors.
Having been privy to the examination of the company’s generators, the attorney feels that the allegations against the company don’t hold any water.
However, the Carpoffs increased and uncontrolled spending during the time their company was in operation raised some red flags. The FBI got interested, finding enough to warrant a raid at the couple’s home.
Unsurprisingly, the partners had piles of cash lying around – $19,000 was in Paulette’s purse, over $40,000 was in the couple’s master suite, $9,200 was found in a work bag, and $8,650 was in one of their vehicles.
The initial amount found in the master bedroom had been locked away in a safe, but agents also found an additional $19,000 in the room.
A raid at the company’s headquarters also had a similar result, with $1.7 million in one safe, $151,000 in another one, and over $17,000 hidden in different locations within the company’s offices.
Questionable Habits
Bloomberg, quoting reliable sources, reports that Jeff Carpoff’s financial habits were highly questionable. To put it simply, he was behaving like one who stumbles upon cash they haven’t worked for.
During staff meetings, he would regularly pull out notes worth up to $2,000, asking his employees to correctly guess the exact amount he was holding. The person to first guess the amount within a $50 error margin got to take home the loot.
As a couple, the Carpoffs also went big in terms of purchases. They acquired a baseball team for an unknown price, bought two vehicles for $105,682 and $192,550, spent $500,000 on jewelry and watches, rented out a stadium box for $783,000, in addition to buying NetJets shares.
According to the authorities, the Carpoffs had strategic arrangements to make DC Solar look successful, while in truth they were only paying off their early investors using cash brought in by more investors.
Bloomberg reports that the company had only manufactured between 3,000-5,000 generators, but claimed to have over 12,000 of them in use. The Carpoffs apparently had their employees fix GPS devices in areas without generators, to give the illusion that they had sold that huge number of them.