SCRANTON, Pa. — A Pennsylvania court has sentenced a New York man to 240 months in prison for a nationwide investment fraud scheme.
The United States Attorney's Office for the Middle District of Pennsylvania announced Thursday that a judge sentenced Perry Santillo, 42, of Rochester, to the statutory maximum sentence.
According to United States Attorney General Gerard M. Karam, Santillo previously pleaded guilty to a felony information charging mail fraud. At the time of his guilty plea, Santillo admitted to defrauding investors around the county as part of a Ponzi scheme that included victims in Pennsylvania.
Santillo reportedly admitted as part of his plea that the scheme took in approximately $115 million in fraudulent investments and resulted in a total loss to investors of $70.7 million.
“Perry Santillo came to the Middle District of Pennsylvania for one purpose, to steal the hard-earned money of innocent victims,” said U.S. Attorney Karam. “Most of the victims were retirees, and many of them lost everything they had saved.
According to court documents, Santillo was a founder, member, manager and CEO of First Nationle Solution, LLC. He offered and sold securities in First Nationle, Percipience Global Corporation, United RL Capital Services LLC, and other issuers to investors.
Santillo also provided investment advice to those same investors. However, First Nationle, Percipience Global Corporation and United RL did not conduct their purported businesses.
Instead, Santillo and others working with him operated each business as a Ponzi scheme by issuing securities in promissory notes, soliciting and then misappropriating large amounts of investor funds. The remaining investor funds were then used to pay off redeeming investors.
According to court documents, in Pennsylvania Santillo and those who helped him purchased a book of business from an investment advisor and conducted their fraud scheme under the guise of an investment business located in Scotrun, Monroe County.
The business reportedly used several names including Advice and Life Group, Poconos Investments, First American Securities and Financial Planners Group of America.
Santillo, with the help of others, then solicited investors from within those acquired books of business to withdraw money from traditional investments such as annuities and reinvest the funds in issuers controlled by Santillo and others, including First Nationle, Percipience, and United RL, sometimes without disclosing that Santillo and his confederates owned those issuers.
Through offering documents, company websites, and in-person pitches, Santillo and his partners falsely indicated that investments would be used to fund legitimate businesses.
However, rather than use investors’ funds for purported legitimate business purposes, Santillo and his partners misappropriated vast amounts of the funds for their personal use and used some of the funds to pay redeeming investors to perpetuate the Ponzi scheme.
Santillo and his associates also misrepresented the ongoing performance, or lack thereof, of investors’ investments. He reportedly provided account statements to investors falsely stating that investor funds were invested, falsely stating investment returns, and in some cases falsely stating that a bonus had been credited to investor accounts.
In certain instances, Santillo and others provided investors with bonus funds or interest payments, and in other cases, Santillo and others provided redeeming investors with all or part of their funds, at times with returns.
These were Ponzi payments derived from new investor funds rather than actual investment returns. In other cases, Santillo and others failed to fulfill the requests of investors to redeem their investments.
Among the victims in the Middle District of Pennsylvania was an individual with the initials “JP.”
JP reportedly invested $159,000 in First Nationle in September of 2015, and invested another $380,000 in June of 2016.
In 2017, JP also invested twice in United RL, the first an investment of $20,000 and the second $52,000. Santillo and his partners also induced JP to invest $325,000 in a third fraudulent issuer.
JP was repaid only $15,000 and was defrauded of the remainder of the $936,000 total investment. The specific charge in the information to which Santillo pled guilty related to a mailing sent in relation to the fraudulent investments JP was sold by Santillo and his confederates.
Santillo has been ordered to pay restitution to all victims.
