A Rochester, N.Y.–based man will spend more than 17 years in prison after being convicted in federal court for his role in a Ponzi scheme that defrauded about 1,000 investors of more than $100 million, the Department of Justice announced Friday.
Perry Santillo was found guilty of conspiracy to commit mail fraud, mail fraud and conspiracy to launder money, and was sentenced to 210 months in prison for conspiring to run the scheme along with Christopher Parris (who also was convicted but is yet to be sentenced), as well as others, according to the DOJ.
The Securities and Exchange Commission filed charges to shut down the duo’s Ponzi scheme in June 2018, alleging that they’d defrauded investors from around the country over a period of more than six years. According to the SEC, Santillo was registered with the Financial Industry Regulatory Authority (FINRA) between 2003 and 2007 (including short stints with NYLIFE Securities and Nationwide Securities, according to his BrokerCheck profile).
Beginning in 2007, Santillo and Parris formed Lucian Development as a means to solicit investors in a separate business called City Capital Corporation, owned and operated by Ephren Taylor, but that year Taylor told the duo that investors’ money was depleted (Taylor was later convicted for running his own Ponzi scheme). Santillo and Parris responded by acquiring City Capital’s assets and debts, the latter of which quickly and drastically exceeded the amount of available assets.
The duo decided not to tell existing investors that their funds were gone, but they needed to find more funding to avoid the types of losses that would raise suspicion. Santillo and Parris opted to find new investors for their issuers by purchasing at least 15 investment advisors or brokers throughout the country, including five in California, two in South Carolina and businesses in Ohio, Nevada and Florida, among other states.
After they’d acquired a broker or advisor, Santillo and Parris (presumably the “C.P.” named in the 2019 filing on the case) would ask the purchased business owners to set up meetings with their clients, according to the Justice Department.
“At these meetings, and at later meetings, Santillo and C.P. advised the clients that their investment portfolios needed to be adjusted to improve returns and reduce risk, and recommended liquidating existing investments and using the proceeds to acquire promissory notes and other securities of the Issuers,” the filing read.
Santillo reportedly kept the true nature of the investments hidden, with new investors unaware that a significant amount of their funds were being used to make payments to previous investors. Santillo and Parris also used money from investors to pay operating expenses on the scheme and to fund further purchases of investment and brokerage businesses to get access to more potential victims (John Piccarreto, another Rochester-based individual, previously was sentenced to seven years in prison for his role in the Lucian Development Ponzi scheme).
Santillo and Parris also used investors’ money for their own personal expenses. According to the SEC complaint, Santillo used investor funds to pay for houses in several states, cars and expenses at a country club and a Las Vegas resort. At one point, Santillo threw a party in a Las Vegas nightclub and commissioned a song written about himself, with lyrics referring to him as “King Perry.”
Through 2018, Santillo and Parris raised at least $115 million, from about 1,000 investors, and returned about $44.8 million of it, leaving nearly $71 million still owed, according to the DOJ. In addition to his prison sentence, Santillo also was ordered to pay more than $102,950 in restitution for victims of the scheme.
