New York man pleads guilty in $115M Ponzi scheme
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.