United States District Court, E.D. California
McGREGOR W. SCOTT United States Attorney.
M. ESPINOZA KEVIN C. KHASIGIAN Assistant U.S. Attorney.
UNITED STATES' REQUEST TO EXTEND THE DEADLINE TO
SUBMIT A JOINT STATUS REPORT FROM JANUARY 9, 2020 TO MARCH
A. MENDEZ UNITED STATES DISTRICT COURT JUDGE.
United States submits the following Request to Extend the
Deadline to file a Joint Status Report from January 9, 2020
to March 11, 2020.
March 18, 2019, the United States filed a civil forfeiture
complaint in rem against more than sixty bank accounts, over
$1.8 million in U.S. currency, prepaid flight hours with a
private jet company, a luxury box with a professional sports
team, and various items of jewelry (“defendant
assets” or “In Rem Defendants”) connected
to fraud and money laundering crimes in the Eastern District
of California and other areas. As described below, the bank
accounts are associated with DC Solar and its related
investment funds, which the United States alleges are
involved in, and contained proceeds of, a Ponzi scheme
orchestrated through a tax equity investment fraud. All known
potential claimants to the defendant assets were served in a
manner consistent with Dusenbery v. United States,
534 U.S. 161, 168 (2002) and the applicable statutory
authority. Furthermore, public notice on the official
internet government forfeiture site, www.forfeiture.gov,
began on May 4, 2019, and ran for thirty consecutive days, as
required by Rule G(4)(a)(iv)(C) of Supplemental Rules for
Admiralty or Maritime Claims and Asset Forfeiture Actions.
See Dkt. 4. A Declaration of Publication was filed on June 6,
2019, which set forth, among other items, that publication on
the government's forfeiture website was complete on June
2, 2019. See Dkt. 9.
case is related to four other cases filed in the Eastern
District of California: two civil cases, United States v. 725
Main Street, Martinez, California, et al., Case
2:19-CV-00247-JAM-DB and United States v. 5383 Stonehurst
Drive, Martinez, California, et al., Case
2:19-cv-00636-JAM-DB; and two recently filed criminal cases,
United States v. Ronald Roach, et al.,
2:19-cr-00182-JAM and United States v. Robert
Karmann, 2:19-cr-00222-JAM. A notice of related case was
also filed this week in another criminal case involving the
DC Solar fraud, United States v. Ryan Guidry,
United States has provided notice to all potential claimants
pursuant to law. The United States served copies of the
complaint documents on all interested parties, including
financial institutions, a professional sports franchise, a
private jet operator, investors in the tax equity funds, and
the LLCs and individuals listed as signors on the seized bank
accounts. The United States specifically served copies of the
complaint documents on the LLCs through their registered
agent for service of process, as listed on the California
Secretary of State's website. Further, the government
served copies of the complaint on the principals of DC Solar,
Jeffrey and Paulette Carpoff. Lastly, the government has
provided notice of this action to any entities or individuals
that may have a security interest in the accounts, such as a
certificate of deposit required as part of a larger financial
loan package extended to DC Solar.
parties have so far appeared in the case. First, the
principals of DC Solar and the LLCs associated with many of
the In Rem Defendants, Jeff and Paulette Carpoff, filed
claims as to each of the eighty-seven In Rem Defendants. See
Dkt. 6-7. Second, NetJets, through their wholly-owned
subsidiaries,  filed claims concerning the prepaid flight
shares purchased by the Carpoffs with alleged fraud proceeds.
Dkt. 12-14. Third, East West Bank and Solar Eclipse
Investment Fund XXXV, LLC filed claims to In Rem Defendant
Approximately $9, 004, 531.62, which was seized from the
Investment Fund's bank account during the
government's law enforcement operation on December 18,
2018. Dkt. 15-16. East West Bank states that it was an
investor in Solar Eclipse Investment Fund XXXV, LLC. Dkt. 15.
The Solar Eclipse Fund and East West Bank filed answers.
other party has filed an answer in this case. However, based
on the claimants' requests for additional time to review
the allegations-in the civil complaint as well as the
recently filed criminal informations and plea agreements-and
potential privilege issues and other defenses, and given the
lengthy facts and complicated issues in this case, the United
States has agreed to their requests for more time. The
answers are currently due on January 15, 2019.
several potential tax equity investor-victims and financial
institutions have requested extensions of time to file claims
in this case. For similar reasons underlying the agreement to
extend the time to file an answer, the United States granted
each request for an extension of time and those entities and
institutions currently have until January 15, 2020 to file a
claim in the case.
allow the above individuals, entities, and investors
sufficient time to file claims and/or answers, the United
States seeks to continue the deadline to file a Joint Status
Report from January 9, 2020 to March 11, 2020 (or to another
date the Court deems appropriate).
there is good cause to extend the deadline to file a joint
status report in this case from January 9, 2020 to March 11,