Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.
Help support the publication of case reports on MoreLaw
Date: 10-23-2019
Case Style:
United States of America v. Ronald J. Roach and Joseph W. Bayliss
Case Number: 2:19-cr-00182-JAM
Judge: John A. Mendez
Court: United States District Court for the Eastern District of California (Sacramento County)
Plaintiff's Attorney: André M. Espinosa and Kevin C. Khasigian
Defendant's Attorney:
Call 888-354-4529 if you need help finding a Ponzi Scheme securities fraud criminal defense lawyer in Sacramento, California
Description:
Sacramento, CA - Two plead guilty to participation in a Ponzi scheme involving $2.5 billion in transactions and $1 billion in loss
Two defendants pleaded guilty to their participation in a massive fraud scheme involving a solar energy company in Benicia, that defrauded investors of approximately $1 billion. Those losses resulted from investment transactions in solar energy hardware valued at approximately $2.5 billion.
According to court documents, between 2011 and 2018, the solar energy company manufactured mobile solar generator units (MSG), solar generators that were mounted on trailers. The company touted the versatility and environmental sustainability of the MSGs and claimed that they were used by cellphone companies to provide emergency power to cell towers in the case of a power failure. They were also claimed to be used to power lights at sporting and other events.
The company solicited investors by claiming that there were very favorable federal tax benefits associated with investments in alternative energy. The company structured the transactions in order to maximize the tax benefits to the investors. Investors would buy the MSGs without ever taking possession of them. They would pay a percentage of the sales price and finance the balance with the company. Then the investors would lease the MSGs back to the company, which in turn leased them to third parties. A portion of the lease revenue would be used to pay the investors’ debts to the company and to the investors. The third‑party leases, however, generated little income and the company paid early investors with funds contributed by later investors.
According to court documents, Ronald J. Roach, 53, of Walnut Creek, a certified public accountant, provided accounting and tax services to the solar energy company. To trick investors, Roach prepared years of financial statements that falsely characterized investments to purchase MSGs as revenue earned from the rental of those MSGs. Roach and his co-conspirators used those fraudulent financial statements to hide from investors the company’s use of later investor payments to pay financial obligations the company made to earlier investors—in a classic, Ponzi-like scheme. Roach also pleaded guilty to securities violations associated with the same investment fraud scheme.
Joseph W. Bayliss, 44, of Martinez, a general contractor and electrician who provided services to the solar energy company, pleaded guilty to conspiring with Roach and others in connection with the same scheme to defraud investors. Bayliss admitted to preparing thousands of false reports certifying the existence and operating specifications of thousands of MSGs sold to investors. Bayliss admitted that, for at least two years, he signed many of those false reports knowing that the MSGs associated with them did not exist, and knowing investors would rely on those false reports. Bayliss also admitted that, at the direction of a co-conspirator, he flew to Las Vegas to destroy evidence after the execution of search warrants at the company’s headquarters and other locations in December 2018.
This case is the product of an investigation by the Federal Bureau of Investigation, IRS‑Criminal Investigation, and the Federal Deposit Insurance Corporation Office of Inspector General.
The investigation is ongoing. Roach and Bayliss are schedule to be sentenced by U.S. District Judge John A. Mendez on Jan. 28, 2020. Roach faces a maximum statutory penalty of 10 years in prison. Bayliss faces a maximum statutory penalty of five years in prison. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Charges:
CONSPIRACY TO COMMIT AN OFFENSE AGAINST THE UNITED STATES
(1)
SECURITIES FRAUD
(2)
Outcome: 10/22/2019 8 MINUTES (Text Only) for proceedings before District Judge John A. Mendez: MINUTES (Text Only) for proceedings before District Judge John A. Mendez: STATUS CONFERENCE as to Ronald J. Roach, Joseph W. Bayliss held on 10/22/2019. Defendant Ronald Roach entered a guilty plea to Cts. 1 & 2. Defendant Joseph Bayliss entered a guilt plea to Ct. 1. In Court Hearing set for 10/22/2019 at 02:00 PM in Courtroom 8 (EFB) before Magistrate Judge Edmund F. Brennan for advisement on release. PSR ordered. Sentencing set for 1/28/2020 at 09:15 AM in Courtroom 6 (JAM) before District Judge John A. Mendez. Government Counsel: A. Espinosa; K. Khasigian present. Defense Counsel: C. Picone; T. A. Johnson present. Court Reporter: K Barajas. (Vine, H) (Entered: 10/22/2019)
10/22/2019 9 MINUTES (Text Only) for DETENTION HEARING as to Ronald J. Roach Joseph W. Bayliss held on 10/22/2019 before Magistrate Judge Edmund F. Brennan: All parties present. The Govt did not move for the detention of either deft, however requested the Court impose a $25,000 co-signed unsecured bond as to each deft. After consideration and for the reasons as stated on the record, the Court ordered both defts to remain released O/R under the conditions as recommended by Pretrial Services. Additionally, the Court imposed a $25,000 co-signed unsecured bond as to each deft. Both defense counsel requested until 10/29/2019 to file the unsecured bond. So ordered. Defense counsel for deft Bayliss requested until 10/29/2019 to surrender his passport. So ordered. Government Counsel: Andre Espinosa present. Defense Counsel: Christian Picone and Thomas Johnson present. Custody Status: out of custody. Court Reporter/CD Number: Jonathan Anderson. (Cannarozzi, N) (Entered: 10/22/2019)
Plaintiff's Experts:
Defendant's Experts:
Comments: