Rep. George Santos (R-N.Y.), who has admitted to fabricating key details of his biography, received payments as recently as April 2021 from a financial services company accused by the Securities and Exchange Commission of a “classic Ponzi scheme,” according to a court-appointed lawyer reviewing the firm’s assets.
Santos did not divulge any income from the company, Florida-based Harbor City Capital, on a financial disclosure form required of all federal candidates. The payments the lawyer described to The Washington Post, which have not been previously reported, indicate that Santos received money at least a month after he has said he left the firm — and mere weeks before registering a business called the Devolder Organization that he has claimed as the basis for his wealth. The lawyer, Katherine C. Donlon, declined to tell The Post the amount Santos was paid.
Santos, whose election to Congress from Long Island last year helped the GOP secure its narrow majority, has apologized for what he called “résumé embellishment,” but he has refused to step aside. On Wednesday, he rebuffed calls to resign from fellow New York Republicans, including leaders of the state GOP and the party in Nassau County, which had previously endorsed him.
The congressman’s deceptions have already sparked an investigation by the district attorney’s office in Nassau County, as well as complaints before the Federal Election Commission. Authorities in Brazil are also seeking to revive a fraud case against Santos dating to 2008.
During his first run for Congress in 2020, Santos reported earning a salary of $55,000 from a previous employer in the financial industry. His fortunes then improved dramatically, according to the financial disclosure he filed during his 2022 campaign: He earned an annual salary of $750,000 and received more than $1 million in dividends from the Devolder Organization. He also lent his campaign more than $700,000, according to campaign finance records.
A key unanswered question is how Devolder made its money. The congressman has given various explanations about the firm — including saying it is an operation focused on “asset allocations” and an effort to help “all the people who were left adrift” at Harbor City.
The financial disclosure form, filed in September of last year, covers earnings starting in January 2021 and anticipated through December 2022. It does not mention Harbor City.
According to quarterly reports Donlon has submitted to the U.S. District Court for the Middle District of Florida, she and her team have interviewed people associated with the firm and issued subpoenas “for documents related to monies paid out by Harbor City.” While declining to enumerate the payments to Santos, Donlon told The Post they exceeded the $200 reporting threshold.
Santos, 34, did not respond to text messages seeking comment.
Delaney Marsco, senior legal counsel for ethics at the nonpartisan Campaign Legal Center, said intentional failure to disclose could result in large fines or imprisonment for up to five years. “Voters have a right to know this information,” she said. “Congress has said as much.”
Santos, who sometimes uses his maternal family name, Devolder, registered his eponymous organization in Florida on May 11, 2021, according to corporate records. He did so with the help of a business associated with DeVaughn Dames, state business records show. Dames, who describes himself on LinkedIn as the former chief financial officer of Harbor City, did not respond to requests for comment.
Harbor City was formed in 2014 by a Florida entrepreneur named J.P. Maroney. In July 2020, the company announced it had hired Santos to serve as regional director of the company’s New York City office. The news release referred to Santos, who was then in the midst of his first congressional campaign, as George Devolder.
“I’ve known Mr. Devolder for several years professionally, and have always had a lot of respect for how he conducts himself in business,” Maroney said in a news release at the time.
Before Santos’s hiring was made public, the Alabama Securities Commission had issued a cease-and-desist order in June 2020 to prevent Harbor City from selling securities in the state.
Santos has previously denied knowing of any wrongdoing at Harbor City, telling the Daily Beast last year that he was “as distraught and disturbed as everyone else” to learn of the allegations against it. He claimed that he had left Harbor City on March 1, 2021, more than a month before the SEC filed its complaint.
In that complaint, filed on April 20, 2021, the SEC alleged that Maroney had raised more than $17 million by deceiving investors into sinking their money into unregistered fraudulent securities.
The SEC complaint named Harbor City and Maroney as defendants, but did not name Santos or any other Harbor City employees. Santos was responsible for securing investors for the company in New York, according to people familiar with his role who spoke on the condition of anonymity because of the matter’s sensitivity.
Maroney told investors that Harbor City was in the business of generating sales leads for other companies, and that their money, in funding that work, would fetch handsome returns, according to the SEC complaint. But he spent “at most” $449,000 of the $17.1 million he raised on actual business expenses, according to the complaint. It accuses him of diverting much more than that — $4.8 million — for his personal use, including to pay off his and his wife’s credit card bills, buy and renovate a waterfront home, and buy a Mercedes-Benz.
Maroney used another $6.5 million to make monthly interest payments to investors in “classic Ponzi scheme fashion,” according to the SEC complaint.
In court, Maroney has denied allegations of wrongdoing. Last fall, he secured a stay in the SEC’s civil case against him, saying he was the “target in a related criminal investigation” involving the “same conduct and events.” He did not elaborate in court and did not respond to requests for comment.