New York man pleads guilty in $115M Ponzi scheme

The Morning Call - - LOCAL NEWS - By Morn­ing Call Staff —Chris­tine Schi­avo

A New York man has pleaded guilty in fed­eral court to a $115 mil­lion Ponzi scheme that in­volved about 1,000 in­vestors, in­clud­ing some in the Po­conos, the U.S. At­tor­neys Of­fice said.

Perry San­tillo, 39, of Rochester, pleaded guilty Mon­day in the Western Dis­trict of New York to con­spir­acy to com­mit mail fraud, mail fraud and con­spir­acy to laun­der money, and has agreed to plead guilty to mail fraud in the Mid­dle Dis­trict of Penn­syl­va­nia, ac­cord­ing to a news re­lease from the U.S. At­tor­neys Of­fice of the Western Dis­trict.

When the scheme col­lapsed in late 2017, it had re­turned $44.8 mil­lion to in­vestors but owed about $70.7 mil­lion in prin­ci­pal, the re­lease notes.

“De­fen­dants like Perry San­tillo lure in­no­cent in­vestors by tak­ing full ad­van­tage of their trust and hopes for a bet­ter fi­nan­cial fu­ture,” Michael T. Harp­ster, spe­cial agent-in­charge of the FBI’s Philadel­phia Di­vi­sion, said in the re­lease. “As vic­tims en­vi­sion their nest eggs grow­ing, these scam­mers are di­vert­ing, even pock­et­ing, that hard-earned money.”

Be­tween 2008 and 2018, San­tillo and a man iden­ti­fied as C.P. launched an in­vest­ment fraud known as a Ponzi scheme, af­ter ac­quir­ing the as­sets and debts of a failed cor­po­ra­tion for which they con­tin­ued so­lic­it­ing in­vest­ments, pros­e­cu­tors say.

The in­vest­ment of­fer­ings they pitched mainly were un­se­cured prom­is­sory notes and stock is­sued by en­ti­ties they con­trolled, ac­cord­ing to court records.

They con­tin­ued the scheme with the pur­chases of es­tab­lished busi­nesses in a dozen states, in­clud­ing Penn­syl­va­nia, where they set up a fraud­u­lent firm in Scotrun un­der the names Ad­vice and Life Group, Po­conos In­vest­ments, First Amer­i­can Se­cu­ri­ties, and Fi­nan­cial Plan­ners Group of Amer­ica, pros­e­cu­tors say. Through the busi­nesses, they were able to raise $3 mil­lion from 30 in­vestors, pros­e­cu­tors say.

“This mas­sive na­tion­wide fraud was com­mit­ted for one sim­ple rea­son — to en­rich San­tillo and his con­fed­er­ates,” Mid­dle Dis­trict U.S. At­tor­ney David J. Freed said in the re­lease. “This was a scam from day one, and San­tillo and the oth­ers knew it.”

Over the years, money from new in­vestors was used to make pay­ments to early in­vestors, pros­e­cu­tors said in the re­lease, ad­ding that much of it sup­ported a lav­ish life­style for those or­ga­niz­ing the scheme. They said San­tillo spent about $1 mil­lion on suits and par­ties.

San­tillo will be sen­tenced in New York in March. He is not yet sched­uled for ar­raign­ment in Penn­syl­va­nia.

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