Congressman George Santos' work history is under increasing scrutiny this morning. The Wall Street Journal reports the New York Republican raised money for a company the U.S. Security and Exchange Commission (SEC) called a “classic Ponzi scheme.”
Before winning a seat in Congress, Santos worked for Harbor City Capital, an internet marketing company, from 2020-2021.
The SEC charged Harbor City Capital with securities fraud and froze its assets in April 2021. A court order placed the Florida company under receivership.
Santos claimed he didn't know about the fraud. However, Journalist Andrew Kaczynski reported that Santos was alerted to potential fraud at Harbor City more than a year before the SEC filed an emergency action to shut down the alleged Ponzi scheme.
During his employment, Santos — who went by the name George Devolder at the time — was confronted by a potential customer who found a Standby Letter of Credit from Harbor City fraudulent.
The Wall Street Journal (WSJ) reviewed documents showing Santos persuaded at least one investor to make a six-figure investment in the company.
When Harbor City failed to deliver its promised returns, Santos attempted to reassure one anxious investor, claiming that he had personally raised $100 million for the company.
WSJ has more on the fallout:
The SEC declined to comment on Mr. Santos's role at Harbor City. Mr. Santos has denied wrongdoing and previously said in interviews that he wasn't named as a defendant in the SEC's lawsuit against the company. A spokesperson for Mr. Santos didn't respond to a request for comment for this article.
People who raise money from investors and are paid in the form of commissions generally have to be brokers and be registered to work with a licensed brokerage firm. The SEC routinely brings civil-enforcement actions against people who conduct the work of brokers but aren't licensed to do so; it has filed no such action against Mr. Santos. A search of a database maintained by the Financial Industry Regulatory Authority, or Finra, doesn't show Mr. Santos registered as a broker. The terms under which Mr. Santos was paid for his work at Harbor City couldn't be determined.
Those raising money for smaller businesses or investment managers are sometimes called “finders,” and they are often paid for recruiting investors. Since the companies seeking the capital are private, the deals often don't involve audited financial statements or other disclosures that investors in the public markets rely upon.
Mr. Santos didn't disclose any income from Harbor City on the financial-disclosure forms that federal candidates are required to file when running for office, as earlier reported by the Washington Post.
Besides referring to himself as George Devolder, a clip from 2019 that's trending today shows Santos calling himself Anthony Devolder.
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Santos lies in his campaign were only the tip of the ice berg. It is a rare thing for a liar to have only one misstep/crime/sin.
You’re so right. Look at old Joe Biden and his history of lying about EVERYTHING.
What the problem? Biden took millions from the Communist Chinese and no one is doing anything about it.. So a little Ponzi scheme shouldn’t be an issue. It’s not like he lied about being a Cherokee Indian to get a job or said he fought in Viet Nam. If he did, he would be qualified to be a Democrat Senator.