Captive executive sentenced to prison in fraud trial
Captive executive Peter J. Strauss of Hilton Head has been sentenced to nine months in federal prison for knowingly transferring, and aiding and abetting the transfer of, $3 million to prevent the lawful seizure of the funds in a case in South Carolina.
Strauss pleaded guilty to the charges more than a year ago and the judge then announced that he was awaiting a sentencing report prepared by the US Probation Office.
According to the United States Attorney’s office of South Carolina, evidence obtained in the investigation revealed that Strauss directed and aided and abetted the transfer of $3 million for Jeff and Paulette Carpoff following the execution of federal search and seizure warrants in California. Strauss directed the transfer of $3 million from an account in the Bahamas to his trust account, thereafter, combining the funds for his personal use, according to prosecutors.
Jeff and Paulette Carpoff owned and operated DC Solar Solutions and DC Solar Distribution (DC Solar), California corporations that designed, manufactured, and leased renewable energy products, specialising predominantly in the production of mobile solar generators.
On December 18, 2018, the FBI and other federal law enforcement agencies executed numerous search warrants on the businesses associated with DC Solar, as well as the personal residences of Jeff and Paulette Carpoff. Several seizure warrants were also executed on bank accounts and assets associated with DC Solar and its principals. The search warrants were conducted in conjunction with a large-scale investigation regarding an investment fraud and money laundering scheme being operated by the principals of DC Solar.
Following the execution of search and seizure warrants related to an investigation into the Carpoffs’ company, Strauss received $11 million from the Carpoffs. On December 19, 2018, prosecutors said, the first $5 million was transferred into Strauss’ trust account and thereafter distributed to various criminal defence attorneys and bankruptcy counsel and to Carpoffs’ captive insurance funds, managed by Strauss’ captive insurance management company.
Thereafter, on December 28, 2018, Strauss received an additional $3 million, largely used to pay for the Carpoffs’ captive insurance fund premiums. Finally, on January 15, 2019, the Carpoffs wired Strauss $3 million into Strauss’ trust account. The combined funds in Strauss’ trust account were completely spent over the next few months, prosecutors claimed.
Jeff Carpoff pleaded guilty in California to money laundering and wire fraud in January 2020 and was sentenced to 30 years in prison. In November 2021, Paulette Carpoff pleaded guilty to conspiracy to commit an offense against the United States and money laundering. Paulette was sentenced to 11 years and three months.
Strauss pleaded guilty in November 2023 to removal of property to prevent seizure, admitting that by the time of the $3 million transfer in January 2019, he knowingly transferred and aided and abetted the transfer of funds from Carpoff to prevent and impair the government’s lawful authority to take the property into its custody and control.
United States District Richard M. Gergel sentenced Strauss to nine months imprisonment, to be followed by a two-year term of court-ordered supervision. There is no parole in the federal system. Strauss was ordered to pay $2.7 million in restitution, which Strauss previously paid in compliance with the terms of his plea agreement.
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