The opinion
11 McGREGOR W. SCOTT
United States Attorney
22 ANDRE M. ESPINOZA
KEVIN C. KHASIGIAN
33 Assistant U.S. Attorney
501 I Street, Suite 10-100
44 Sacramento, CA 95814
Telephone: (916) 554-2700
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Attorneys for the United States
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88 IN THE UNITED STATES DISTRICT COURT
99 EASTERN DISTRICT OF CALIFORNIA
1100
1111 UNITED STATES OF AMERICA, 2:19-CV-00636-JAM-DB
1122 Plaintiff,
UNITED STATES’ REQUEST TO
1133 v. EXTEND THE DEADLINE TO
SUBMIT A JOINT STATUS REPORT
1144 REAL PROPERTY LOCATED AT 5383 FROM JANUARY 9, 2020 TO MARCH
STONEHURST DRIVE, MARTINEZ, 11, 2020
1155 CALIFORNIA CONTRA COSTA COUNTY,
APN: 367-230-018-7, INCLUDING ALL
1166 APPURTENANCES AND IMPROVEMENTS
THERETO, et al.,
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Defendants.
1188
1199 The United States submits the following Request to Extend the Deadline to file a Joint Status
2200 Report from January 9, 2020 to March 11, 2020.
2211 Introduction
2222 On April 15, 2019, the United States filed a civil forfeiture complaint in rem against fourteen real
2233 properties (“In Rem Defendants”) connected to fraud and money laundering crimes in the Eastern
2244 District of California and other areas. All known potential claimants to the In Rem Defendants were
2255 served in a manner consistent with Dusenbery v. United States, 534 U.S. 161, 168 (2002) and the
2266 applicable statutory authority. Furthermore, public notice on the official internet government forfeiture
2277 site, www.forfeiture.gov, began on May 4, 2019, and ran for thirty consecutive days, as required by Rule
11 See ECF No. 4. A Declaration of Publication was filed on July 12, 2019, which set forth, among other
22 items, that publication on the government’s forfeiture website was complete on June 2, 2019. See Dkt.
33 40.
44 This case is related to four other cases filed in the Eastern District of California: two civil cases,
55 United States v. 725 Main Street, Martinez, California, et al., Case 2:19−CV−00247-JAM-DB and
66 United States v. Approximately $6,567,897.50 Seized From CTBC Bank, Account Number 3800191916,
77 et al., Case 2:19-cv-00485-JAM-DB; and two recently filed criminal cases, United States v. Ronald
88 Roach, et al., 2:19-cr-00182-JAM and United States v. Robert Karmann, 2:19-cr-00222-JAM. A notice
99 of related case was also filed this week in another criminal case involving the DC Solar fraud, United
1100 States v. Ryan Guidry, 2:20-cr-00003-KJM.1
1111 The United States has also lodged the complaint on the bankruptcy docket for DC Solar’s parent
1122 company, In re Double Jump Inc., Case 19-bk-50102, a bankruptcy case filed in Reno, Nevada after the
1133 United States executed federal search and seizure warrants at DC Solar’s business and other locations in
1144 California associated with the company and its founders. The United States and the Chapter 7 Trustees
1155 for the entities related to DC Solar and its principals have since entered a Coordination Agreement
1166 concerning the In Rem Defendants and other assets connected to DC Solar and its principals. An order
1177 approving the Coordination Agreement was entered in late November 2019, resulting in the dismissal of
1188 two In Rem Defendants from this case.2 See Dkt. 49, 51.
1199 Good Cause
2200 The United States has provided notice to all potential claimants pursuant to law. Specifically,
2211 the In Rem Defendants are collectively owned by Jeffrey and Paulette Carpoff personally and through
2222 several LLCs, Dora Dog Properties, LLC, Dog Blue Properties, LLC, 475 Channel Road, LLC, 2750
2233 Maxwell Way, LLC, Fou Dog, LLC, Antioch Mini Storage, LLC, and 4021 Pike Lane, LLC. The
2244 government served copies of the complaint documents on the above LLCs through their registered agent
2255
2266
1 The Securities and Exchange Commission (“SEC”) has filed a notice of related cases to relate this case (and others) with
their civil enforcement against criminal defendants Ronald Roach and Joe Bayliss, SEC v. Bayliss, et al., Case No. 2:19-CV-
2140-MCE-AC.
2277
11 for service of process, as listed on the California Secretary of State’s website. Further, the government
22 served copies of the complaint on the principals of each respective LLC, Jeffrey and Paulette Carpoff.
33 Lastly, the government has provided notice of this action to the lienholders who are identified on chain-
44 of-title documents and may have a security interest in the In Rem Defendants.
55 Four parties have so far appeared in the case.3 First, the only parties who have asserted an
66 ownership interest, Jeff and Paulette Carpoff, filed claims as to each property in their personal capacity
77 and through their LLCs. See Dkt. 27-28. Second, a bank filed claims concerning outstanding loans as
88 relates to two In Rem Defendants (2750 Maxwell Way and 4021 Pike Lane) being sold by the U.S.
99 Marshals Service, as discussed below. Dkt. 6-7. Third, a construction company filed a claim and
1100 answer associated with labor/materials supplied in connection with retaining walls installed at one of the
1111 In Rem Defendants. Dkt. 37. Lastly, the California Franchise Tax Board (“FTB”) filed a claim to
1122 several of the In Rem Defendants based on alleged taxes owed to the FTB by Jeff and Paulette Carpoff.
1133 Dkt. 35. The FTB and Daysh Development filed answers.
1144 No other party has filed an answer in this case. However, based on the claimants’ requests for
1155 additional time to review the allegations—in the civil complaint as well as the four recently filed
1166 criminal informations and plea agreements—and potential privilege issues and other defenses, and given
1177 the lengthy facts and complicated issues in this case, the United States has agreed to their requests for
1188 more time. The answers are currently due on January 15, 2020.
1199 Furthermore, several potential tax equity investor-victims and those associated with the Dc Solar
2200 tax equity deals have requested extensions of time to file claims in this case. For similar reasons
2211 underlying the agreement to extend the time to file answers, the United States granted each request for
2222 an extension and those entities currently have until January 15, 2020 to file a claim.
2233 To allow the above individuals, entities, investors, and trustees sufficient time to file a claim and
2244 research the issues raised by the facts alleged in the Complaint and recently filed criminal pleadings, the
2255 United States seeks to continue the deadline to file a Joint Status Report from January 9, 2020 to March
2266 11, 2020 (or to another date the Court deems appropriate).
2277
11 Accordingly, there is good cause to extend the deadline to file a joint status report in this case
22 from January 9, 2020 to March 11, 2020, or to a date the Court deems appropriate.
33
U.S. Marshals’ Efforts to Manage and Sell In Rem Defendants
44 2750 Maxwell Way and 4021 Pike Lane
55 As explained in the United States’ application for a restraining order, 2750 Maxwell Way and
66 4021 Pike Lane were purchased using a combination of alleged fraud proceeds and millions of dollars in
77 bank loans, the latter which went into default status some months ago. To preserve the availability
88 equity, the United States requested and this Court ordered, the U.S. Marshals to maintain and sell each
99 property, and the U.S. Marshals started those efforts in following the entry of the May 2019 order.
1100 Particularly, the U.S. Marshals have secured each property, changed the locks and alarm codes,
1111 entered occupancy agreements with existing tenants, and taken other actions to ensure the properties are
1122 safe and properly monitored by professional custodians. The U.S. Marshals have also obtained
1133 appraisals and title reports for each property, designated a point person for any property issues that arise
1144 from tenants and/or other interested parties, and engaged an experienced commercial broker to market
1155 and sell the properties. As to 4021 Pike Lane, several offers were submitted and the strongest offer was
1166 accepted after a subsequent “best and final” round. The property recently sold for approximately
1177 $6,980,000. As to 2750 Maxwell Way, an offer was accepted in July 2019, but that buyer pulled out of
1188 escrow prior to waiving due diligence. The property returned to the market in September 2019 and
1199 recently went into contract with a local owner-user buyer. Escrow is anticipated to close in late January
2200 2020.
2211
2222 Dated: 1/8/2020 McGREGOR W. SCOTT
United States Attorney
2233
2244
/s/ Kevin C. Khasigian
2255 ANDRE M. ESPINOZA
KEVIN C. KHASIGIAN
2266 Assistant U.S. Attorney
2277
11 ORDER
22 Pursuant to the United States’ request and good cause appearing, the Court makes the following
33 order:
44 The deadline to file a Joint Status Report is extended from January 9, 2020 to March 11, 2020.
55 IT IS SO ORDERED.
66
Dated: 1/8/2020 /s/ John A. Mendez_____________
77 JOHN A. MENDEZ
United States District Court Judge
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