SEC Shuts Down $102 Million Ponzi Scheme
Litigation Release No. 24172 / June 20, 2018
Securities and Exchange Commission v. Santillo, et al., No. 18-cv-5491 (JGK) (S.D.N.Y.) (filed June 19, 2018)
Yesterday, the Securities and Exchange Commission today filed charges and obtained an asset freeze against the individuals and companies behind a $102 million Ponzi scheme that bilked investors throughout the U.S.
According to the SEC's complaint, the defendants defrauded more than 600 investors through sales of securities in issuers they controlled, including First Nationle Solution LLC, United RL Capital Services, and Percipience Global Corp. The complaint alleges that investors were told that their funds would be used for the companies and some were guaranteed dividends or double-digit returns. But, according to the complaint, the defendants spent at least $20 million to enrich themselves, paid $38.5 million in Ponzi-like payments, and transferred much of the remainder in transactions that appear unrelated to the issuers' purported businesses.
The complaint charges Perry Santillo, of Rochester, New York, Christopher Parris, also of Rochester, Paul LaRocco, of Ocala, Florida, John Piccarreto, of San Antonio, and Thomas Brenner, of Orville, Ohio, along with the three companies.
The SEC's complaint, filed in federal district court in Manhattan, charges Santillo, Parris, LaRocco, Piccarreto, Brenner, and the three issuers with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. It further charges Santillo, Parris, LaRocco, Piccarreto, and Brenner with violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and aiding and abetting the three issuers' violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The court granted the SEC's request for an asset freeze and a temporary restraining order. The court will hold a hearing in 10 days concerning the asset freeze and will consider ordering a preliminary injunction.
The SEC encourages investors to check out the background of their investment professional by using the free and simple search tool on http://Investor.gov. Investors should be cautious of investment professionals with a history of misconduct, including disciplinary actions by the Financial Industry Regulatory Authority, or FINRA.
The SEC's continuing investigation is being conducted by Dina Levy, Jordan Baker, and Thomas P. Smith, Jr., and supervised by Lara S. Mehraban. The SEC's litigation will be led by Dugan Bliss and Ms. Levy. The SEC appreciates the assistance of FINRA.