The Securities and Exchange Commission brought charges against five men and three connected entities on Tuesday for allegedly perpetrating a $102 million Ponzi scheme that defrauded more than 600 investors.
The SEC claims two of the defendants — Perry Santillo and Christopher Parris — would "buy or take over books of business of retiring investment professionals from around the country."
Both Mr. Santillo and Mr. Parris are 38-year-old residents of Rochester, N.Y. and were formerly registered brokers.
They and the other three defendants — Paul Anthony LaRocco, 55; John Piccarreto, 34; and Thomas Brenner, 55 — would then persuade newly acquired clients to withdraw their money and "invest in issuers controlled by Santillo, Parris, or their associates," according to the SEC's civil lawsuit, filed in U.S. District Court for the Southern District of New York.
The majority of the $102 million in the Ponzi scheme since 2011 was allegedly raised for three issuers — First Nationle Solution, Percipience Global Corp. and United RL Capital Services. The business operations for the three firms, which are also defendants in the suit, were allegedly "limited or non-existent."
None of the defendants or the three firms could immediatly be reached for comment.
Overall, the SEC claims the five individuals each stole millions from investors, which were either misappropriated or paid out to investors looking to redeem their money.
Mr. Santillo allegedly used at least $13.4 million of the investor funds to "fund a jet-setting lifestyle," including country-club expenses, housing in multiple states, credit-card payments and a party at a Las Vegas nightclub, for which he had a song commissioned about himself.
That song's lyrics referred to him as "King Perry," who wore a "ten-thousand-dollar suit everywhere he rides" and would "pop the champagne in L.A., New York to Florida; buy another bottle just to spray it all over ya," according to the SEC's complaint.