SCRANTON - The United States Attorney’s Office for the
Middle District of Pennsylvania announced that Perry Santillo, age 39, of
Rochester, New York, pleaded guilty on November 4, 2019, to mail fraud.
According to United States Attorney David J. Freed, Santillo
admitted to defrauding investors around the country as part of a Ponzi scheme
that included victims in the Middle District of Pennsylvania. Santillo 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 was a founder, member, manager, and CEO of
First Nationle Solution, LLC. Santillo
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.
In fact, First Nationle, Percipience Global and United RL
did not conduct their purported businesses.
Rather, Santillo and others working with him operated each business
primarily as a Ponzi scheme by issuing securities in the form of promissory
notes, soliciting and then misappropriating substantial amounts of investor
funds, and using some remaining investor funds to pay off redeeming investors.
As part of the scheme, Santillo and others travelled the
country and bought books of business from investment professionals such as
registered representatives and investment advisors.
In the Middle District of Pennsylvania, Santillo and those
who aided and abetted 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, using various business 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 controlled
those issuers.
Through offering documents, company websites, and in-person
pitches, Santillo and his confederates 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 confederates 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. Santillo and others 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 victim investors defrauded in the Middle District
of Pennsylvania was an individual with the initials “JP.” Victim JP first invested $159,000 in First
Nationle in September 2015, and invested another $380,000 in June 2016. In 2017, JP also invested twice in United RL,
the first an investment of $20,000 and the second $52,000. Santillo and confederates 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.
“As he did in districts throughout the country, Perry
Santillo came to the Middle District of Pennsylvania and purchased a business
from a trusted investment advisor for the sole purpose of finding new victims
to exploit,” said U.S. Attorney Freed. “This massive nationwide fraud was
committed for one simple reason – to enrich Santillo and his confederates. This
was a scam from day one, and Santillo and the others knew it. Thankfully,
federal law enforcement was on the case. I want to particularly thank my friend
and colleague U.S. Attorney J.P. Kennedy and his team for their hard work on
this case and commend all of the federal agencies involved for their industry
and cooperative efforts.”
Santillo had previously pled guilty in the Western District
of New York to a three-count information in a related case in October 2019. The
investigation is continuing in the Middle District of Pennsylvania, as well as,
the Western District of New York with respect to others who may have
participated in the scheme.
The case was investigated by the U.S. Federal Bureau of
Investigations; the Securities and Exchange Commission; United States Postal
Inspection Service; the Internal Revenue Service, Criminal Investigation
Division; the U.S. Department of Labor, Office of Inspector General, Office of
Investigations – Labor Racketeering and Fraud; the New York State Department of
Financial Services; and the Harrisburg Police Department. Assistant U.S. Attorney Sean A. Camoni in
Scranton, and Assistant United States Attorney John Field in Rochester are
prosecuting the case.
A sentence following a finding of guilt is imposed by the
Judge after consideration of the applicable federal sentencing statutes and the
Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 20
years of imprisonment, a term of supervised release following imprisonment, and
a fine. Under the Federal Sentencing
Guidelines, the Judge is also required to consider and weigh a number of
factors, including the nature, circumstances and seriousness of the offense; the
history and characteristics of the defendant; and the need to punish the
defendant, protect the public and provide for the defendant's educational,
vocational and medical needs. For these reasons, the statutory maximum penalty
for the offense is not an accurate indicator of the potential sentence for a
specific defendant.
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