Peter Strauss, a captive insurance author, lawyer and principal of South Carolina-based Hamilton Captive Management (HCM), has pleaded guilty to aiding and abetting the transfer of funds from the owners of a renewable energy company, to prevent the government from taking the funds into its control.
Strauss was also the owner of law firm, Strauss Law Firm, that specialised in estate and tax planning, asset protection and the implementation of captive solutions.
He has published several books on captive insurance, including Captive Insurance Companies for the Small Business Owner, and The Definitive Guide to Captive Insurance Companies.
On 9 February, the U.S. Attorney’s Office in the District of South Carolina published a statement stating that evidence had revealed Strauss knowingly transferred millions of dollars for Jeff and Paulette Carpoff, two individuals who have since been convicted and sentenced for their roles in the large criminal fraud scheme.
The Carpoffs owned California-based renewable energy products company, DC Solar Solutions, and DC Solar Distribution.
Following the execution of search and seizure warrants related to an investigation into the Carpoffs’ company, Strauss received $11m from the Carpoffs.
The first $5m was transferred into Strauss’ interest on lawyers’ trust account (IOLTA) and distributed to various criminal defence attorneys and bankruptcy counsel, as well as to Carpoffs’ captive insurance funds, managed by Strauss’ captive management company.
On 28 December, Strauss received an additional $3m, used to pay the Carpoffs’ captive premiums.
On 15 January 2019, the Carpoffs wired Strauss $3m into Strauss’ IOLTA account, and the funds were comingled in Strauss’ IOLTA account and spent over the next few months.
By pleading guilty, Strauss admitted that by the time of the $3m transfer, he knowingly transferred and aided and abetted the transfer of funds from Carpoff to prevent the government’s authority to take such property into its control.
Strauss has agreed to pay $2.7m in restitution to the Federal Clerk of Court at or before the sentencing.
On 24 January 2020, Jeff Carpoff pleaded guilty in California to money laundering and wire fraud and was sentenced to 30 years in prison, while Paulette Carpoff pleaded guilty to conspiracy to commit an offense against the US and money laundering.
She was sentenced to 11 years and three months on 28 June 2022.
US District Judge Richard Gergel accepted Strauss’ guilty plea and will sentence him after reviewing a sentencing report.
Strauss faces a maximum penalty of five years in federal prison. He also faces a fine of up to $250,000, restitution, and three years of supervision to follow the term of imprisonment.
On 18 December 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 the Carpoff’s.
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.
At the time, federal authorities alleged that the Carpoff’s committed wire fraud and tax fraud and diverted investors’ money for personal use.
The Federal authorities also alleged that DC Solar manufactured only a small percentage of the mobile solar generators and created fictitious lease agreements to show their investors in order to obtain investments.
