CEO of San Diego Financial Firm Charged in Loan Scam

In a major development for the financial industry, the CEO of San Diego-based Ethos Asset Management, Inc. has been arrested in connection with a loan scam. Carlos Manuel da Silva Santos of Portugal was apprehended in New Jersey upon arriving in the United States. The arrest follows the unsealing of a complaint by the United States, charging Santos with wire fraud conspiracy. According to the complaint, Santos and his company required borrowers to provide an upfront fee, but failed to disburse the loans as agreed upon. Instead, the funds were misappropriated by Santos for personal expenses and to repay other borrowers. These allegations have raised concerns about the company’s financial integrity and the potential impact on the victims of this scam.

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Background

CEO of San Diego Financial Firm Arrested in Connection with Fraud Charges

The CEO of San Diego-based Ethos Asset Management, Inc., Carlos Manuel da Silva Santos, has been arrested in connection with fraud charges. Santos was taken into custody in Newark, New Jersey, as he arrived in the United States from abroad. The charges against Santos are related to a loan scam that he is accused of orchestrating through his company.

Company Description of Ethos Asset Management, Inc.

Ethos Asset Management, Inc. is a financial firm based in San Diego that offers financing to international businesses. The company has been operating under the leadership of Santos, who is now facing fraud charges.

Overview of the Loan Scam

According to the complaint filed against Santos, he required prospective borrowers to provide an upfront fee that was equal to a certain percentage of the loan amount. However, after receiving the upfront fee, Santos and Ethos did not disburse the loan as agreed upon. Instead, Santos used the upfront fees to repay other prospective borrowers, issue commissions to his co-conspirators, and cover personal expenses.

Accusations against Carlos Manuel da Silva Santos

Santos is accused of manipulating Ethos’ balance sheets and financial account statements to artificially inflate the company’s net worth. This was done to lure prospective borrowers and obtain lines of credit from financial institutions. The complaint alleges that Santos represented Ethos as having a specific brokerage account with a balance of $359,088,190.22, but records indicate that Ethos had no such account. Additionally, Ethos’ bank account statements were allegedly altered by Santos to inflate bank account balances and deceive prospective borrowers.

Details of the Loan Scam

Upfront Fees and Non-Disbursement of Loans

As part of the loan scam, Santos required prospective borrowers to pay an upfront fee, which was a certain percentage of the loan amount. However, once the upfront fee was received, Ethos did not disburse the loan as agreed upon. Instead, Santos used the upfront fees for other purposes, such as repaying other prospective borrowers and covering personal expenses.

Misrepresentation of Ethos’ Net Worth

Santos is accused of artificially inflating Ethos’ net worth by manipulating the company’s balance sheets and financial account statements. This misrepresentation was done to deceive prospective borrowers and obtain lines of credit from financial institutions. For example, Santos allegedly represented that Ethos had a specific brokerage account with a balance of $359,088,190.22, but the records indicate that no such account existed.

Manipulation of Ethos’ Balance Sheets and Financial Account Statements

In furtherance of the loan scam, Santos manipulated Ethos’ balance sheets and financial account statements. This was done to create an illusion of financial stability and credibility for the company. By altering the balance sheets and financial account statements, Santos aimed to deceive prospective borrowers and financial institutions into believing that Ethos had a higher net worth and greater financial resources than it actually had.

Specific Examples of Fraudulent Representations

The complaint against Santos provides specific examples of fraudulent representations made by him. One example is where Santos induced at least one victim to pay an upfront fee of over $8 million by falsely representing that Ethos had $359,088,190.22 in a specific brokerage account. However, it was later discovered that Ethos had no such account. Additionally, Ethos’ bank account statements were allegedly altered by Santos to inflate the bank account balances shown to prospective borrowers, sometimes by more than $100 million compared to the actual deposited amount.

Legal Proceedings

Santos’ Initial Appearance in New Jersey

After his arrest in Newark, New Jersey, Santos made his initial appearance there. This marks the beginning of the legal proceedings against him in connection with the fraud charges.

Complaint Charging Santos with Wire Fraud Conspiracy

The United States unsealed a complaint charging Santos with wire fraud conspiracy related to the loan scam. The complaint alleges that Santos orchestrated the fraud through Ethos Asset Management, Inc. by requiring upfront fees from prospective borrowers and then not disbursing the loans as agreed upon.

Potential Penalties for Santos

If found guilty of the charges against him, Santos could face a maximum penalty of twenty years in prison and a $250,000 fine. The potential penalties reflect the seriousness of the alleged crimes and the impact they have had on the victims and the financial system.

Prosecutors and Investigators

Assistant U.S. Attorney E. Christopher Beeler

Assistant U.S. Attorney E. Christopher Beeler is one of the prosecutors handling the case against Santos. Beeler will work to present the evidence and build a strong case against Santos, ensuring that justice is served.

Carl F. Brooker, IV

Carl F. Brooker, IV is also involved in the prosecution of Santos. As part of the legal team, Brooker will assist in the investigation and presentation of evidence to support the charges against Santos.

Homeland Security Investigations

Homeland Security Investigations (HSI) is the agency leading the investigation into the loan scam and the alleged fraud committed by Santos. HSI is responsible for uncovering the facts, gathering evidence, and supporting the prosecution’s case against Santos.

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Poway Man Sentenced for Concealing Mother’s Death and Stealing Government Benefits

Another related case involves a Poway man who concealed his mother’s death for thirty-two years and stole over $800,000 in government benefits intended for her. This case underscores the need for vigilance in identifying and preventing fraud, particularly when it involves government programs and taxpayers’ money.

Executive Guilty Plea in $150 Million Fraud on Qualcomm

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Contact Information

Southern District of California Main Office

For more information or inquiries regarding the case against Santos or other matters related to the Southern District of California, you can contact the main office located at Federal Office Building, 880 Front Street, Room 6293, San Diego, California, 92101-8807.

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Source: https://www.justice.gov/usao-sdca/pr/ceo-san-diego-financial-firm-charged-loan-scam