fbpx

Buffett Company Victim Of Ponzi Scheme

Buffett Company Victim Of Ponzi Scheme

Buffett
Warren E. Buffett, Chairman of the Board and Chief Executive Officer, Berkshire Hathaway Inc., participates in a NADA Automotive forum happening in conjunction with the New York International Auto Show, Tuesday, March 31, 2015, in New York. (AP Photo/Mary Altaffer)

A company owned by billionaire Warren Buffett was recently hit by a major Ponzi scheme.

Buffett’s Berkshire Hathaway, the multinational corporation, reported $377 million first-quarter investment losses related to a solar Ponzi scheme. This was revealed in a regulatory filing during its recent annual shareholders meeting. In the filing, the company said that it was the victim of a massive Ponzi scheme.

“In December 2018 and during the first quarter of 2019, we learned of allegations by federal authorities of fraudulent income conduct by the sponsor of these funds,” the filings read. “We now believe that it is more likely than not that the income tax benefits that we recognized are not valid.”

Listen to GHOGH with Jamarlin Martin | Episode 23: Everette Taylor Jamarlin talks to serial entrepreneur and marketing whiz, Everette Taylor, about building GrowthHackers, PopSocial and other companies. Everette shares what he learned from selling his first tech business at age 21 and working with Snapchat on a new startup accelerator.

Berkshire Hathaway had invested $340 million in tax-equity investment funds tied to a California company called DC Solar. According to federal authorities, the fake mobile solar generator company boasted it could offer “very favorable tax consequences” for its investors and this was all a lie.


Are you interested in getting smart on Life Insurance?
Click here to take the next step

Berkshire said it had a $190-billion stock portfolio at the end of the first quarter.

DC Solar filed for bankruptcy in February 2019 following an FBI raid on the company’s offices and the home of its co-owners, Jeff and Paulette Carpoff, CNN reported.

So it seems even an investment whiz like Buffett can be scammed.

But other companies were also caught up in this particular scheme.

“Companies including Progressive Corp. and East West Bancorp Inc. also say they’ve been hurt by tax-related investments involving DC Solar, which allegedly promoted its ability to provide ‘very favorable tax consequences,’” Bloomberg reported.

Tax benefits are common in renewable-energy tax-equity investments and often banks and insurers will “passively invest” in clean-power projects so they can benefit from federal tax credits that offset their own tax liabilities.