George Santos scrutinized over ties to investment firm accused of ‘Ponzi scheme’

Embattled Rep. George Santos (R-NY) is dealing with questions on his ties to an funding agency accused of working a “traditional Ponzi scheme.”

Santos, who flipped his district from blue to purple in November, has largely saved a low profile since a report within the New York Occasions final month revealed that he had lied through the marketing campaign about his household, faith, schooling, work expertise, sexuality, and maybe even an animal rescue charity he allegedly based. On prime of bipartisan condemnation for his string of lies, Santos additionally faces a number of investigations, together with one into discrepancies on monetary disclosure kinds.

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It seems that Santos was sincere in presenting one portion of his resume. The reality-challenged lawmaker served as a director on the funding agency Harbor Metropolis Capital Corp. from January 2020 to April 2021. The corporate, in line with a Securities and Alternate Fee grievance from the identical month Santos left, bilked thousands and thousands of {dollars} from its clients in what the company described as a “traditional Ponzi scheme.”

The grievance alleged that Harbor Metropolis promised buyers annual returns of 10% to 60% and instructed buyers their funds can be used to finance “buyer lead technology campaigns,” and that reselling results in different companies would herald money. In actuality, nonetheless, the cash went towards firm proprietor Jonathan Maroney’s private bills.

Santos was employed to lift capital for the agency, and landed not less than one vital funding from a rich investor, in line with a Saturday report from the Wall Road Journal.

“When the funding didn’t ship on the promised returns, in line with one of many folks, Mr. Santos sought to reassure the investor by saying he had personally raised practically $100 million and had invested his family’s cash in Harbor Metropolis,” the report learn.

Santos was not named within the SEC grievance, although he maintains shut ties with a variety of people from the agency, which has since shut down. A court-appointed legal professional reviewing the corporate’s belongings instructed the Washington Put up in an interview revealed Wednesday that Santos obtained funds from the agency not less than a month after his April 2021 departure.

These funds have been made weeks earlier than Santos would register a enterprise referred to as the Devolder Group, an organization that he would declare in marketing campaign monetary disclosure kinds as the idea for his wealth. The New York lawmaker has beforehand passed by George Devolder-Santos to incorporate his mom’s maiden title.

Joseph Murray, a lawyer for the scandal-plagued congressman, instructed CNN on Thursday that Santos was unaware of wrongdoing at firm, saying in an announcement: “As to any questions on Harbor Metropolis Capital, in gentle of the continued investigation, and for the advantage of the victims, it will be inappropriate to reply apart from to say that Congressman Santos was fully unaware of any criminality happening at Harbor Metropolis Capital.”

Requested in regards to the matter for an April 2022 piece by The Each day Beast, previous to being uncovered for mendacity about his background, Santos stated he was “as distraught and disturbed as everybody else” to be taught of the allegations towards his former employer. Santos was questioned in that very same interview about incorporating the Devolder Group with the assistance of Harbor Metropolis’s ex-chief monetary officer and going into enterprise with others from the shuttered firm, none of whom have been singled out within the SEC grievance.

“That firm too was all of the individuals who have been left adrift I attempted to assist,” Santos defined. “All of us acquired collectively to begin a enterprise, however that was dissolved as properly, already.”

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Along with launching the Devolder Group, he seems to be behind the creation of RedStone Methods LLC, a political group that the Federal Election Fee says was by no means registered with their company. Santos and his lawyer declined to reply questions from the New York Occasions about RedStone’s fundraising efforts in previous election cycles, regardless of the agency itemizing the Devolder Group as one in every of its managing officers in incorporation paperwork.

The outlet reviewed the restricted marketing campaign finance information related to the group, and located that RedStone was paid $6,000 in April 2022 by a PAC referred to as Rise NY, which is run by Santos’s sister Tiffany. The report additionally claimed that Santos was immediately concerned in not less than one donor solicitation for RedStone, which might be a violation of legal guidelines barring candidates or their campaigns from coordinating with such organizations.