US attorney in Sacramento wins 2 guilty pleas in $1B fraud

A Sacramento prosecution by U.S. Attorney McGregor W. Scott's office resulted in two men pleading guilty Tuesday to participating in a mobile solar generator scheme that defrauded investors of about $1 billion, according to a press announcement.

Assistant U.S. Attorneys André M. Espinosa and Kevin C. Khasigian prosecuted the case against the two Contra Costa County men. Ronald J. Roach, a certified public accountant, faces a maximum statutory penalty of 10 years in prison, while Joseph W. Bayliss, a general contractor and electrician, faces a maximum sentence of five years. However, the actual sentences will be decided at the discretion of U.S. District Judge John A. Mendez on Jan. 28, 2020.

Between 2011 and 2018, according to court documents, a Benicia company that Roach and Bayliss were both involved with manufactured mobile solar generator units, claiming investors would be eligible for federal tax benefits.

Roach provided accounting and tax services to the company, producing years' worth of financial statements that falsely characterized how the company was using the money of investors, according to the Department of Justice. The company gave early investors money that it framed as a return on their investment, but it was actually provided by later investors.

In addition participating in this scheme, Roach also pled guilty to securities violations.

Bayliss meanwhile produced thousands of fake reports that certified the existence and operating specifications of mobile solar generator units, even though he knew they did not exist, according to the charges. He additionally flew to Las Vegas to destroy evidence after search warrants were executed at the company's headquarters and other locations in December, the DOJ said.

-- Jessica Mach