A fraudster named "King Perry" has been sentenced to 17 ½ years in prison for running a decade-long Ponzi scheme that defrauded more than 1,000 investors out of $115 million.
Perry Santillo, 41, of Rochester, N.Y., pleaded guilty in 2019 to being the mastermind behind a program that pocketed the life savings of many older people with the promise of investments in nonexistent insurance and real estate companies.
Instead, federal prosecutors and investigators from the Secu10rities and Exchange Commission say Santillo and his accomplices used the money to fund lavish lifestyles or to pay off previous investors in the fund.
Overall, prosecutors say nearly $71 million remains unaccounted for. In a 2018 civil lawsuit filed by the SEC, Santillo was accused of pocketing more than $13 million, which he allegedly used to buy luxury cars, multi-state homes and high-profile trips to Las Vegas casinos.
"$10,000 suits everywhere he goes"
During a Vegas trip, investigators said Santillo threw a party for himself, for which he commissioned a song called "King Perry" to be written about himself. The lyrics included lines describing him as wearing "$10,000 suits everywhere he rides" or that he liked to "pop the champagne from L.A., New York to Florida; buy another bottle just to spray yourself with.”
At his sentencing last week, the judge ordered Santillo to pay $102 million in damages.
A nesting doll of Ponzi schemes
According to prosecutors, the scheme began in 2007 when Santillo and his partner Christopher Parris, who together ran an investment fund called Lucian Development, lost $10 million of their clients' money in another fund, Capital City Corporation, which was also a Ponzi scheme .
Instead of telling their investors — many of whom were friends and family — that they had lost their money, Santillo and Parris decided to buy Capital City Corporation's assets and liabilities in hopes of recovering the money they lost, prosecutors said .
"The SEC said the men persuaded an 80-year-old man with dementia to put $250,000 into a nonexistent real estate fund.”
But they soon found that Capital City's debts far exceeded its assets, and then began acquiring the portfolios of troubled mutual funds or fund managers looking to retire to bring in new capital, the said investigator.
Over the next 10 years, the men bought 15 such investment advisory firms in 11 states and persuaded those funds' clients to put their money in bogus or bogus investments. In one case, the SEC said the men persuaded an 80-year-old man with dementia to put $250,000 into a nonexistent real estate fund. Santillo and his accomplices pocketed the money instead, the SEC said.
Santillo's attorney did not respond to a call for comment. In court filings, the attorney admitted that his client had been naïve and made poor decisions, but was genuinely trying to recoup the $10 million he lost his client investing in Capital City and that the situation had spiraled out of control was.
Parris pleaded guilty in August to his role in the Ponzi scheme and separate charges related to a fraudulent scheme to sell nonexistent N95 masks to the Department of Veterans Affairs in the early days of the COVID-19 pandemic. He is due to be sentenced in February. His attorney did not immediately respond to a call for comment.