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Thu Oct 10, 2019, 02:59 AM

Rochester Man Pleads Guilty To Fraud, Conspiracy, And Money Laundering In Rochester Federal Court

Rochester Man Pleads Guilty To Fraud, Conspiracy, And Money Laundering In Rochester Federal Court; Charged in Federal Court in Pennsylvania As A Result Of His Role In Masterminding A Nationwide Multi-Million Dollar Ponzi Scheme

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr., of the Western District of New York, together with David J. Freed, U.S. Attorney for the Middle District of Pennsylvania, announced today that Perry Santillo, 39, of Rochester, NY, pleaded guilty, before Chief U.S. District Judge Frank P. Geraci, Jr. for the Western District of New York, to conspiracy to commit mail fraud, mail fraud, and conspiracy to launder money. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine. As part of his plea in the Western District of New York, Santillo has also agreed to plead guilty to a mail fraud charge, which is also relating to his Ponzi scheme activities, that is currently pending against him in the Middle District of Pennsylvania. That charge carries a maximum penalty of 20 years and a $500,000 fine.

Assistant U.S. Attorney John J. Field, who is handling the case in the Western District of New York, and Assistant U.S. Attorney Sean A. Camoni, who is handling the case in the Middle District of Pennsylvania, stated that between January 2008 and June 2018, the defendant conspired with an individual identified as C.P., and others, to obtain money through an investment fraud commonly known as a Ponzi scheme. Specifically, in 2007, Santillo and C.P., as equal partners, formed a business known as Lucian Development in Rochester. Prior to approximately July 2007, Lucian Development raised millions of dollars from investors in Rochester, and elsewhere, by soliciting investments for City Capital Corporation, a business operated by Ephren Taylor. In July 2007, Santillo and C.P. were advised by Ephren Taylor that their investors’ money had been lost. In response, in August 2007, Santillo and C.P. agreed to acquire the assets and debts of City Capital Corporation. The acquisition proved financially ruinous, with the amount of the acquired debt far exceeding the value of the acquired assets. Taylor was later prosecuted and convicted of operating a Ponzi scheme.

Subsequently, Santillo and C.P. chose not to disclose the truth to investors that their money, entrusted to Lucian Development for investment in City Capital Corporation, was gone. Instead, the defendant and C.P. continued to solicit ever-increasing amounts of money from new investors in an unsuccessful attempt to recoup the losses. In order to find potential investors to solicit and defraud, Santillo and C.P. purchased businesses from established investment advisors or brokers who were looking to exit their businesses. Between approximately 2008 and September 2017, Santillo and C.P., using money obtained from prior investors, purchased the businesses of at least 15 investment advisors or brokers, located in Tennessee, Ohio, Minnesota, Nevada, California (5 businesses), Florida, South Carolina (2 businesses), Texas, Pennsylvania, Maryland, and Indiana.

The investment offerings pitched by Santillo and C.P. consisted principally of unsecured promissory notes and preferred stock issued by various entities controlled by Santillo and C.P. Potential investors were offered an apparent array of investment options to create the illusion of a diversified investment portfolio. Those investment options included products issued by purported issuers such as First Nationle Solutions (FNS), Percipience Global Corporation, United RL Capital Services, Boyles America, Middlebury Development Corporation, and NexMedical Solutions, among others. None of these issuers had substantial bona fide business operations or used investor money in the manner and for the purposes represented to investors. To the extent that an issuer may have had some minor legitimate business activities, it was not profitable and insufficient revenues were generated to pay investors any returns (let alone return the principal amounts of their investments). Santillo, and others, sold fraudulent investments from these issuers to investors who were told that the money received would be used to conduct the purported business of each respective issuer. In fact, however, such issuers were the defendant’s various Ponzi schemes. Santillo, and others working with him, fraudulently induced investors to invest at least $46,000,000 in the First Nationle offering since February 2012, $22,000,000 in the Percipience offering since July 2012, and $25,000,000 in the United RL offering since March 2015.

Read more: https://www.justice.gov/usao-mdpa/pr/rochester-man-pleads-guilty-fraud-conspiracy-and-money-laundering-rochester-federal

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