this video is brought to you by incog, a Northern California couple pleading guilty to a massive Ponzi scheme. Prosecutors say Jeff and Pette Kpof defrauded investors out of 1 billion. The stories of inventors are usually filled with inspiration and ingenuity, a story of humble and sometimes downright tragic circumstances that can turn around in the most majestic of ways. At first glance, this appears to be the story of Jeff Kpof. He was a 36-year-old jobless ex-mechanic who lived in a rundown house with his wife and kids. He was at rock bottom because all of his previous attempts to find financial stability had failed. But then, out of desperation and sheer happenstance, he invents a groundbreaking product, or at least he thinks so anyway. His invention gains incredible momentum, and within a few short years, he's transformed from being broke to a millionaire. The invention? A mobile solar generator. Even without formal education, investors poured millions into his company. Even a US bank and Warren Buffett's Berkshire Hathaway got involved. But

beneath the surface, it was all a scam. In the end, the scheme reached over $1 billion. That's right, billion with a B. This is the story of Jeff Kpo and how he orchestrated one of California's most significant frauds in its history. You are watching T Fusion TV. [Music] Jeff Kpo wouldn't be described as your typical visionary. He was an ordinary guy who enjoyed watching motor racing and baseball games. His goals were simple: make a decent living and provide a comfortable life for his family. He grew up poor in the gritty town of Martinez, California. It was a bleak backdrop: oil refineries billowed smoke, and crime was rampant. Kpo would later describe the town as, where the sewer meets the sea. This description may have been a bit of a stretch, but it captured the essence of the place. From an early age, Jeff learned to fend for himself, and he dabbled in various odd jobs. He floated around life on the edge of society: brushes with addiction, petty crimes, and

Drug dealings were his early adult years. His marriage to his high school girlfriend, Pette, offered a glimmer of hope. Together, they started a successful Land Rover Repair shop. This showcased Jeff's talent for fixing cars and attracting loyal customers. However, a disastrous business decision led to the shop's closure in 2007. After that, financial desperation pushed him back to selling drugs again to make ends meet. Perhaps these early struggles set the stage for Jeff Kof's journey towards a fraudulent path. Jeff, now 36 years old, had lost his business. He had no money, mounting debt, and a mortgage to pay. Peddling drugs forever was not a feasible option. He needed a fresh start, and he got one when he landed a job as a solar panel salesman. He then realized something: people were interested in solar, but they were worried about their panels getting stolen. And this gave him an idea. What if he could make panels mobile and versatile? He imagined hooking them up to a trailer that could be moved and parked.

anywhere. Having never gone to college, Jeff Kpof knew nothing about engineering, but he was a skilled mechanic, and he did like to tinker with things. So, he drew up a plan on the back of a napkin and called in his car mechanic brother-in-law. Through trial and error, they hacked together a contraption with two rows of five solar panels mounted on a rotating beam. The entire apparatus was constructed in a way that could be locked and tilted for easy transportation and sun exposure. One could say that it was nothing special, maybe even something a couple of blockheads could have come up with. But as fate would have it, this tinker project would make history, and well, not in a good way. Meanwhile, the portable generator market was huge and growing. It was worth nearly $3 billion a year. The potential was massive, although Jeff and his brother-in-law had no clue of this. They didn't know how big the market was or even how to tap into it. But as time wore on, Jeff didn't think much of the initial

idea at first, however, an old customer from back in his car shop days, da Watson, saw the potential. Watson was a software consultant in the affluent Bay Area, and he knew a thing or two about investment, so he offered to help kpof and his wife start their company, DC solar, and it was to launch in 2008 by making solar mobile. We've redefined energy independence with that. We can provide solar light towers, solar power electric vehicle charging stations. The possibilities are endless. At the same time, Watson and his associates would handle marketing, and this is where things really got cooking. The initial plan of attack was to aim sales at Hollywood. At the time, movie sets were powered by noisy diesel generators. Portable solar panels could be a perfect quiet alternative. The initial feedback was positive. Some big movies like Inception and Valentine's Day gave them a shot, and the idea caught on. Even famous environmentalist actor Leonardo DiCaprio showcased the panels on his Facebook page. It was the perfect organic promotion. This was 2009, after all. Back then, the public could basically

lap up practically anything that a celebrity would. [Music] endorse. Jeff may not have been a Visionary, but he understood the power of networking, and he went all out from posing as a big shot entrepreneur to attending cocktail parties, and even telling his Underdog personal story to win people over. Jeff was just one of those guys who could talk his way into anything. He would embellish stories and outright lie. Oh, wow, you saw shootings and stabbings growing up? That's crazy. That makes it even more amazing that you turned out to be such a brilliant entrepreneur. But Jeff's mother would later tell the publication The Atlantic that Jeff always made stories up about his upbringing to make people feel sorry for him or just for a laugh. His attempts paid off, and he managed to make some important connections among top-tier business professionals. The most significant breakthrough came when KPOF connected with a law firm called Nixon Peabody. The firm was renowned for its expertise in getting special tax benefits for industries, including

Renewable Power. It was all falling into place. The game-changing factor was that Congress tripled the value of investment tax credits in 2005. Businesses could now get a whopping 30% of their federal income taxes back as a credit on any money they spent buying and installing solar equipment. That means for every dollar spent, they got 30 cents back from the government, effectively an intrinsic 30% discount. The DC solar trailers were a lucrative option for companies that just wanted to cut back on their tax bills and go green. He set up a special fund that let buyers purchase the number of generators that align with the desired tax savings. They only had to pay a 30% price UPF front and then take that exact amount off their taxes. So basically, they got their money back right away. But what about the rest of the money? DC solar promised to loan the remaining 70% to buyers. The buyers would pay it back by leasing the generators on DC solar's behalf. Jeff even guaranteed loan

payments and offered cash payouts from the leasing Revenue. It was an incredible deal for the companies. On top of that, they didn't have to worry about using, maintaining, or even laying eyes on their own generators. As you're probably studying together, these deals have very little to do with kof's product. It was primarily based on exploiting the tax credit and the other perks that came with it. That's why so many big companies fell for it. The Allure of the benefits was so strong that parties often overlooked the necessity of comprehensive due diligence. In all of this, one crucial question was overlooked: did the generator business model actually work well? We'll soon find [Music] out. It was March of 2011, and Jeff was attending a baseball game. Just as he was singing the National Anthem, his phone buzzed with a text. He had done it. It was his first major deal. The paint company Sherwin Williams purchased 192 generators for $29 million. He couldn't believe it. The ball was really rolling.

now with this major deal Jeff's eyes were opened. Such a partnership could draw in more investors, and not long after, US Bank would join the party. The bank believed that joining DC Solar would align with its goals of promoting sustainability, reducing tax, and creating local jobs. Unfortunately for them, they were unaware that Jeff had used fake documents and fraudulent transactions to inflate the demand for solar generators. Without verifying the facts, the US Bank would become one of the first financial backers for DC Solar. The plan was to purchase and lease thousands of generators over the next 7 years. Despite the initial success, questions began to appear about the real usefulness of Jeff's generators. The lack of solar expertise was evident. Some movie sets began to experience power outages due to faulty generators. Jeff's brother-in-law, Bobby Amo, who was the builder of the Solar Generator products now called the Solar Eclipse, would state, I had no idea how solar worked. Good thing they had Google and all that. Imagine using Google to build something that would net your company hundreds of millions of dollars.

problems with the solar generators became so frequent that it wasn't uncommon for DC Solar to use backup diesel generators to kick in after a power failure. There would be smoke pouring from behind a solar generator, the ultimate ironic imagery. Furthermore, in preparation for the upcoming sale of equipment to Sherwin-Williams, the paint company, DC Solar was to present their fleet of panels. A DC Solar employee went to the production facility to see how things were going. It wasn't good. The clients were soon due to inspect the whole fleet, but only the first row of panels were complete. The rest were just cobbled together to give the illusion that things were progressing faster than they actually were. The employee pressed Jeff, who remarked, Eh, don't worry about it. So, was Jeff worried? Not really. He was busy enjoying his new $1.3 million home, paid in cash. It had a pool and enough car space for six vehicles. A bigger problem was brewing, however. Almost nobody wanted to lease these things for 5 to 10 years, and without these long-term leases, DC

solar couldn't finance the buyer's massive purchase loans or meet the demand for returns. Additionally, the IRS would prevent buyers from claiming solar tax credits if generators were left unused. Without those credits, DC solar would lose its most appealing feature. What on Earth was Jeff and his team going to do now? Faced with these challenges, DC solar was financially toast, but Jeff wasn't done yet. He decided to get crafty. A new idea emerged around June 2012. It was during a meeting between Jeff and two of his close associates at the company. They devised a scheme to use the purchase money from new buyers to pay, quote, lease money to previous ones. The trick was to manipulate accounting so that the company's cash from new generator sales appeared as lease payments from existing renters. The whole plan seemed eerily like a classic Ponzi scheme, but with an added layer. DC solar didn't just defraud new buyers to pay off earlier ones. It used the facade as a legitimate solar company to drain millions in tax credits from the US Treasury. This meant that

American taxpayers ended up subsidizing the fraud. Jeff pitched it as a temporary measure just to make ends meet, a typical fake-it-to-you-make-it approach. As we'll later see, Jeff's lies began to spiral out of control, and the disaster that was to follow was nothing short of [Music] Spectacular. Now the problem for Jeff was he had to keep fooling more investors to keep the scheme going. That's just the nature of a Ponzi scheme. It relies on constantly bringing in money from new investors to pay off the old ones. It's like building a house of cards with a small base and a very wide top. So to maintain the illusion of success, Jeff had to get creative. When prospective buyers inquired, he'd say that his generators were leased to different customers. The truth was he moved a few around to make it seem like there was demand. He'd jack up their value and create fake lease agreements with made-up renters. He even roped in a former IRS agent and a shell company to help close

a $76 million deal. Now you might be wondering, how did nobody catch on? Where were the authorities? Well, the IRS did try to investigate in 2014, but DC Solar's legal representative, Forest Milder, took every step to suppress it, at least for the time being. Some investors were getting suspicious at the time. To mitigate the damage, the team at DC Solar had to become expert scammers. Remember, barely anyone was leasing these things, so there wasn't enough money coming in to make the payments to the old buyers. The heat was being turned up, and Jeff needed bigger clients. Valley National Bank, who was going to purchase $76.8 million of solar equipment, asked for the list of companies renting out DC Solar generators. After all, Jeff said over 80% of the generators were being rented out. The truth was only 5% were, and this was a problem. In the end, they deployed DC Solar CFO Rob Carman, a former alcoholic who couldn't hold a job and was only employed by the company because he was

an old high school buddy of the accountant at DC Solar, Rob Wood, forged a bunch of documents and leasing figures to make the problem go away, and the scam continued. Fates would later catch DC Solar, but for now, the coast was clear. The participation of Geico, which is a subsidiary of Warren Buffett's Berkshire Hathaway, added a massive layer of credibility. The question is, how did such an esteemed company get into the mix? By Jeff lying to them, of course. Jeff wanted to play with the big players, and to do that, he needed to make his business seem even bigger. So, he set up a fake lease deal agreement with the telecom giant T-Mobile. One of his henchmen got a T-Mobile employee on board by offering a huge salary and bonus. All this employee had to do was sign some forged papers. What he didn't know was that he was unwittingly binding T-Mobile to a lease agreement of a thousand generators for a decade at a yearly cost of $13 million. Just think about the absurdity.

of that situation. But anyway, it did give Jeff and DC Solar some reputation to approach Geo. Warren Buffett had always been keen on solar. In fact, he's even gone on the record saying, If somebody walks in with a solar project tomorrow and it takes a billion dollars or it takes 3 billion, we're ready to do it, and the more the better. Geo would ultimately purchase almost 8,000 generators for almost $1.2 billion over a period of 3 years. This was like the ultimate stamp of approval for Jeff's business. Geico also benefited hugely as they saved approximately $377 million in taxes as a result of the deal. But the manipulation didn't stop there. As the facade grew, Jeff used even more devious tactics to deceive buyers. When potential investors insisted on personally inspecting the generators at DC Solar's warehouses, Jeff and his team would manually remove the VIN numbers from generators owned by earlier buyers. Then they would apply these VIN stickers to units that visiting buyers wanted to count. This crafty switch gave the

illusion that generators were present despite not [Music] existing. Jeff continued to defraud investors and rack up more sales. Most of the generators sold were either non-existent or nonfunctional. The money gained was used to pay off earlier investors and fund Jeff's lavish lifestyle. He splurged on opulent parties, luxury homes, more than a 100 cars, a private jet, and a minor baseball team. Jeff's love for car racing also influenced his marketing strategy. One of his major customers was the International Speedway Corporation. They leased 1,500 generators for its NASCAR tracks. His company also sponsored NASCAR. DC Solar even plastered the name across race cars and tracks. The showmanship was ironic given that this company was supposed to be environmentally responsible. The thing is, Jeff didn't really care about green energy at all. He just stumbled upon this opportunity by chance. He simply GED the system to his advantage to earn as much money as he could. But the House of Cards had to fall at some

point, the IRS finally began digging into DC Solar's activities properly in 2016. The generators were sold for $150,000 but only worth around $13,000, so the taxes saved were $45,000 per generator. So companies were saving 300% of the generator's value, not 30%. No wonder everyone wanted a piece. The IRS was slowly building their case. They'd found that the dealings with companies like Shaw and Williams and Aaron Burr LLC were fraudulent attempts to manipulate energy credits and bypass regulations. But the funny thing was on the surface, things still looked like they were going great. Around the same time, DC Solar joined forces with the Obama Administration Smart City Challenge. They didn't win, but there was still a large presence back at the company. Employees witnessed the paranoia grow. Jeff's interactions with his staff were a mix of control and unpredictability. His wife, Paulette, was also deeply involved and assumed an authoritative demeanor. She often responded to the employees' questions with a firm stay in your lane. As suspicions mounted, more surveillance

cameras were installed, and access to critical documents was restricted. Then came the paper shredding. It looked like the illusion of success was finally crumbling. In early 2018, the SEC received a tip-off from a whistleblower. It was later revealed to be from the inside, Sebastian Jano, the director of Project Finance at DC Solar. He exposed the whole scheme. The reason behind his actions is still unclear to this day, but the SEC soon got involved, and later the FBI stepped in. On a side note, it's amazing to see how far Jeff got and would have gone unnoticed if it wasn't for an internal whistleblower. In December 2018, Federal agents closed in on Jeff. Despite his attempt to flee, he was arrested. His substantial wealth, including an extensive collection of cars and offshore accounts, were seized. It was Game Over. The husband and wife team from Martinez accused of lying to investors about federal tax credits they could earn if they leased generators from their Solar Company. One of the victims, Warren Buffett's Berkshire Hathaway, lost

$340 million. Jeff is now facing up to 30 years behind bars, while pette is facing up to 15. Prosecutors have been seizing the couple's assets, including 149 vehicles that were auctioned off last fall in Woodland. It was the biggest single owner auction ever in the history of the US Marshal service. Wow! In January of 2020, Jeff and polet kpof pleaded guilty to various charges, including fraud and money laundering. The trial started in November 2020 and lasted several months. The prosecution presented overwhelming evidence of their scheme. In 2020, they were both sentenced to prison. Jeff received 30 years and pette 11 years and 3 months. Other accomplices were also charged, and they received varying degrees of sentencing, ranging from 2 to 8 years in prison and millions of dollars in restitution. The downfall of DC solar laid bare a ponzi scheme that defrauded various companies of nearly $1 billion. Some of the biggest names included US Bank, Berkshire Hathaway, Geo.

and Progressive Insurance. During Jeff Kof's trial, a quote by a judge summed up the whole saga perfectly: You were selling air. Jeff Kof's invention had people convinced that he was offering the ultimate green solution. However, in their enthusiasm and hunger for tax credits, everyone seemingly overlooked the most important thing: due diligence. This case serves as a cautionary tale about hype and how it can influence our decisions, even the decisions of powerful companies. Building non-existent and broken solar generators is one kind of scam, but in the world today, there's plenty of others. You've probably come into contact with them: scam calls, text messages, and various phishing attempts. But why does this happen to you? Well, the main reason is because your personal information is being sold online without you even knowing it. This information can be used to send unsolicited scams and advertisements, sell your browsing habits, or even commit identity theft. That's where today's sponsor, Incog, can help. They can delete your information from the records of data brokers on your

behalf. Simply just create an account, then Incog can contact the data Breakers, and then you can sit back and let them take care of the rest, complete with updates on how the task is going. To protect yourself online, use the code cold fusion in the link below to get 60% off an annual Incognito plan. Go to incognito.com/fusion to get started. Thanks to Incog for supporting the channel. Now back to the video. Overall, Jeff was just a regular guy who stumbled across an infinite money glitch, and then he got greedy. He kept lying to keep the gravy train going, and it worked until the truth caught up with him. It always does. So, that is the story of the billion-dollar solar fraud. So, what are your thoughts on this? Let me know in the comment section below. Also, a side note, if it's a bit echoey, let me know. I've just moved house, and I haven't treated the room yet. Let me know if it sounded okay. All right, so that's about it from

me my name is toogo and You' been watching cold fusion and I'll catch you again soon for the next episode all right see [Music] you here we go [Music] again Fusion it's new thinking

How This Man Pulled Off a Billion-Dollar Solar Scam

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How This Man Pulled Off a Billion-Dollar Solar Scam

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