Last year, Phoenix deployed about 90 solar lights and generators in parking lots and near dog parks throughout the city. It had gotten the units for free from a solar company in California.
This month, the companies that free-leased those generators to Phoenix filed for bankruptcy. Court documents also contain claims that DC Solar Freedom and a slew of its corporate affiliates were perpetrating a massive fraud scheme.
What that means for the fate of Phoenix’s dog-park lights and electric-vehicle charging units, which are still scattered around the city, is not clear. The city says it is waiting to see what happens before making any decisions.
Mark Hartman, Phoenix’s chief sustainability officer, who oversaw the rollout of DC Solar Freedom’s trailers, said that the city had no comment on the allegations against DC Solar.
Other than a license agreement stipulating that DC Solar pay Phoenix a nominal fee of $10 to operate its trailers on city property, Phoenix does not have any financial ties to DC Solar, Hartman said.
The city hasn’t sent an invoice to DC Solar for that $10, Hartman said. Nor has the company asked for the trailers to be returned.
“They provide energy at no cost to the city and the public,” he added.
So far, criminal charges have not been filed against the DC Solar companies. Bankruptcy documents lay out a complex web of business operations and relationships among the companies, as well as millions in debt owed to NASCAR-related businesses, insurance companies, manufacturers, investment funds, and other businesses.
Those documents contain a declaration, too, from an FBI agent, that the companies were operating a “Ponzi-type investment fraud scheme.”
The problems first came to light on December 20, when the FBI raided DC Solar’s offices in Benicia, California, and the Martinez, California, home of its owners, NASCAR enthusiasts Jeff and Paulette Carpoff, who had a history of troubles with the IRS. The company also laid off about 100 employees, who made up nearly the entirety of its work force, according to court documents.
Jeff Carpoff did not respond to a voice message left on his cellphone.
Gina Swankie, a spokesperson for the FBI in Sacramento, said the FBI could not comment for this story.
DC Solar Freedom’s website still promises to provide mobile solar generators to communities “for use at no cost,” explaining that it provides the $150,000 units “through a strategic partner lease” with one of its sister companies.
According to bankruptcy documents, DC Solar Solutions designed and manufactured solar generators. Typically, it sold them to investment funds, which could claim investment tax credits worth 30 percent of the cost of those units.
In some cases, those investment funds leased the generators back to sister company DC Solar Distribution, which in turn occasionally partnered with DC Solar Freedom to donate trailers. Its primary target was college campuses — DC Solar Freedom has given units to colleges and universities in California and Ohio — but it looked to cities as well.
The intent behind DC Solar Freedom was to exploit those generators to power video monitors “as a new source of revenue from digital advertising, security, and data analytics,” bankruptcy documents said. The company does not appear to have generated any of this revenue, given that before the FBI raid, it ordered 250 video monitors that were supposed to be delivered this month.
DC Solar approached Phoenix in summer 2017 with the offer of free solar lights and electric-vehicle chargers. The city was happy to accept, even as it unwittingly lent a patina of legitimacy to an imploding company facing potential allegations of fraud.
“It’s going to be free energy,” Hartman told Phoenix New Times last October. “We don’t have to pay anything for it.”
While Phoenix hasn’t been directly affected from the fallout in this bizarre saga of California solar-energy companies gone awry, ISM Raceway in Avondale hasn’t fared as well.
In 2016, it signed DC Solar to be the title sponsor of a spring NASCAR series in 2017 and 2018. According to bankruptcy documents, DC Solar owes ISM Raceway $750,000.
Rodney Searce, a spokesperson for the track, said, “Due to the ongoing legal proceedings, we are unable to provide any comments at this time.”