From staff reports
Peter J. Strauss, 45, of Beaufort, has pleaded guilty to removal of property to prevent seizure.
Strauss was the founder and managing partner of the Strauss Law Firm, LLC, located in Hilton Head. The Strauss Law Firm specialized in estate and tax planning, asset protection and the implementation of captive insurance solutions for clients. Strauss also served as principal of Hamilton Captive Management (HCM), a captive insurance management company that provides management services to his clients’ captive insurance funds.
According to a release from Adair Ford Boroughs, U.S. Attorney for the District of South Carolina, evidence obtained in the investigation revealed that 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 largest criminal fraud scheme in the Eastern District of California.
Jeff and Paulette Carpoff owned and operated DC Solar Solutions, Inc. and DC Solar Distribution, Inc., (DC Solar), California corporations that designed, manufactured and leased renewable energy products, specializing predominantly in the production of mobile solar generators.
On Dec. 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.
At the time, federal authorities alleged that the Carpoffs committed wire fraud and tax fraud and diverted investors’ money for personal use. Federal authorities further 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.
Following the execution of search and seizure warrants related to an investigation into the Carpoffs’ company, Strauss received $11 million from the Carpoffs. On Dec. 19, 2018, the first $5 million was transferred into Strauss’ interest on Lawyers’ Trust Account (IOLTA) and thereafter distributed to various criminal defense attorneys and bankruptcy counsel and to Carpoffs’ captive insurance funds, managed by Strauss’ captive insurance management company. Thereafter, on Dec. 28, 2018, Strauss received an additional $3 million, used to pay for the Carpoffs’ captive insurance fund premiums.
Finally, on Jan. 15, 2019, the Carpoffs wired Strauss $3 million into Strauss’ IOLTA account. Thereafter, the funds were co-mingled in Strauss’ IOLTA account and completely spent over the next few months. By pleading guilty, Strauss admitted that by the time of the $3 million transfer on Jan. 15, 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 such property into its custody and control. The defendant has agreed to pay $2,700,000 in restitution to the Federal Clerk of Court at or before the sentencing.
On Jan. 24, 2020, Jeff Carpoff pleaded guilty in California to money laundering and wire fraud and was thereafter sentenced to 30 years in prison. On Nov. 9, 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 on June 28, 2022.
Strauss faces a maximum penalty of five years in federal prison. He also faces a fine of up to $250,000, restitution, and three of supervision to follow the term of imprisonment. United States District Judge Richard M. Gergel accepted the guilty plea and will sentence Strauss after receiving and reviewing a sentencing report prepared by the U.S. Probation Office.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Emily Limehouse is prosecuting the case.
