Just when you think everything about George Santos’ corrupt, manufactured life has been exposed, the gushing sewer gushes some more. Believe it or not, by the way, around a third of Americans don’t even know who he is. Interestingly enough, most Americans who have never heard of him are Republicans— since right-wing media has downplayed the story. 28% of Democrats don’t know who he is but 37% of Republicans and 46% of independents don’t know anything about the new star of the GOP. They’ll be finding out soon enough. In his Long Island district, 60% of the voters want him to resign. And that’s sentiment is getting more and more prevalent, although— desperate for the six-figure salary— he says he’ll never resign. Theoretically, he could serve out the rest of his term while serving out a prison term… either in the U.S. or Brazil.
This morning, Ezra Klein’s column in the NY Times focused on why the GOP keeps coming apart at the seams, managing to avoid even a mention of Santos. He wrote that “It’s not just the 14 votes Kevin McCarthy lost before promising away enough of his power and prestige to finally be named speaker. It’s his predecessors, Paul Ryan and John Boehner, who both quit the job McCarthy now holds. It’s the Tea Party repeatedly knocking off Republican incumbents. It’s Ted Cruz and the Freedom Caucus forcing government shutdowns their colleagues never wanted. It’s Donald Trump humiliating virtually the entire Republican Party establishment and becoming the erratic axis around which all Republican Party politics revolves. It’s House Republicans ousting and isolating Liz Cheney because she insisted on investigating an armed assault on the chamber they inhabit. Today, a gaggle of Republicans isn’t a party. It’s closer to a riot.” All true. But what about McCarthy pledging to keep Santos away from any state secrets while simultaneously pledging to keep him in Congress and giving him a committee assignment (if he can find a committee chairman willing to take him).
One committee chair who won’t is House Oversight Committee Chairman James Comer (R-KY). When Comer was on State of the Union today, the last question Jake Tapper asked him was “Seven of your fellow House Republicans have called for Congressman George Santos to step down. Former House Speaker Paul Ryan told me a couple days ago that Santos' was a fraudulent candidacy, and he should step down. Should he?”
Comer, an ally of McCarthy’s was pretty straight-forward, at least for a McCarthyite: “Look, he's a he's a bad guy. This is something that it's really bad. He's not the first politician, unfortunately, to make it to Congress to lie. Elizabeth Warren wasn't truthful about her ethnicity. And I could go on and on. But, look, George Santos was duly elected by the people. He's going to be under strict ethics investigation, not necessarily for lying, but for his campaign finance potential violations. So I think that Santos is being examined thoroughly. It's his decision whether or not he should resign. It's not my decision. But, certainly, I don't approve of how he made his way to Congress. And I haven't even introduced myself to him, because it's pretty despicable, the lies that he told. But, at the end of the day, it's not up to me or any other member of Congress to determine whether he could be kicked out for lying. Now, if he broke campaign finance laws, then he will be removed from Congress.”
What Comer got right— and what the media mostly doesn’t seem understand— is that this isn’t really about Santos saying he’s Jewish or pretending to have graduated from 2 colleges and a high school he never attended or about working for Goldman Sachs or being a volleyball star or even about stealing a scarf or a cell phone. It’s about financial crimes— breaking serious campaign finance laws like a straw donor scheme, funneling campaign cash into his own pockets, taking money from Russia, and a Ponzi scheme in Florida that paid him hundreds of thousands of dollars, some of which was illegally laundered into his campaign. This morning the Wall Street Journal looked at the Ponzi scheme.
Byron Tau wrote that Santos “persuaded at least one person to make a six-figure investment in a Florida-based company that the U.S. Securities and Exchange Commission later said was a Ponzi scheme… Santos was hired in 2020 to raise capital for the company, Harbor City Capital, and landed at least one significant investment from a wealthy investor, the people said. When the investment failed to deliver on the promised returns, according to one of the people, Santos sought to reassure the investor by saying he had personally raised nearly $100 million and had invested his own family’s money in Harbor City.”
The scheme was run by Jonathan Maroney and the SEC sued in 2021. The SEC lawsuit stated that “This an emergency action to stop an ongoing, fraudulent Ponzi scheme victimizing hundreds of investors across the United States," pointing out that Maroney, had misused virtually all of the $17.1 million he had secured from investors. “Maroney used investor money to enrich himself and his family, and to perpetuate the Ponzi scheme by making payments of fictitious returns to existing investors using other investor funds. Specifically, of the $17.1 million raised from Harbor City’s investors, Maroney misappropriated more than $4.88 million for his own personal use."
Writing for the Washington Post this morning, a trio of reporters led by Isaac Stanley-Becker took a closer look at the Harbor City Capital ponzi scheme and “George Devolder’s” role in it. They wrote that though he denies having participated in the ponzi aspects of the firm— an obvious lie— “Court records, company documents and previously unreported footage of workplace Zoom meetings obtained by the Washington Post, as well as interviews with former Harbor City employees and investors, reveal how the firm nurtured Santos’s ambitions and acquainted him with business associates who have gone on to play notable roles in his scandal-plagued political career. When the company was shuttered in 2021, after allegedly collecting a total of $17.1 million from more than 100 individuals, Santos joined Harbor City executives in creating other businesses and political consultancies now under scrutiny after his election to Congress, according to business registration documents.”
One of those Harbor City session featured an appearance by Donald Trump Jr. and his so-called “fiancee,” Kimberly Guilfoyle. While scamming investors (marks) and later GOP donors and voters, Santos passed himself off as “the face of Harbor City’s New York operations. ‘I’m actually Harbor City Capital’s head guy for New York City,’ Santos said in fall 2020, during an earlier failed run for Congress, in an interview recorded by the Metropolitan Republican Club… ‘We just give them a better return than a traditional 401(k),’ he said on the podcast. ‘In my private sector job, I am actually helping mainly retirees secure their future. So that’s what I’m about. I’m about helping people…’” said the guy who stole a checkbook from a sick patient his mother was caring for.
After Harbor City shut down, and with assistance from a fellow former Harbor City employee, Santos in 2021 formed a company, the Devolder Organization, that paid him at least $3.5 million over the next two years, according to Florida business records and financial disclosure forms he filed as a candidate. The Post could locate no evidence of a public-facing profile for Devolder or any record of business activities. Santos loaned his campaign more than $700,000 but did not report any income from Harbor City despite having been paid by the company in 2021.
…Josh Eisen, a wealthy self-funded candidate who ran unsuccessfully for Congress from New York in 2020, told The Post he met Santos early that year at a Republican event. Eisen, 51, said Santos later approached him with two business opportunities, one involving a guaranteed-return investment and the other involving a chocolate business. He donated to Santos’s campaign but decided against investing with him.
In the Zoom recordings, Santos acknowledged the pressure he felt to perform. “Right now, I’m fighting the battle of my life at Harbor City,” he said in one, explaining, “I need to close a big deal. I need to show J.P. he didn’t make a mistake … I admire him a lot.”
Harbor City was then claiming that a “top tier” bank had issued it a Standby Letter of Credit, or an SBLC, designed to ensure the company’s ability to pay back investors, according to the SEC and draft investor pitches obtained by The Post. But no such SBLC ever existed, the SEC alleges.
In early June 2020, Santos spoke to a prospective investor who was considering cutting a check for at least $50,000, according to emails obtained by The Post. Another Harbor City employee sent her a document with a logo from Deutsche Bank, a copy of which was obtained by The Post, that appeared to show the bank had wired 5 million euros to a Harbor City account for the issuance of an SBLC. The Post obtained a pitch document circulated within Harbor City that included a placeholder for an image of Maroney holding up the purported Deutsche Bank transfer.
Emails show that the prospective investor, who spoke to The Post on the condition of anonymity to discuss a sensitive business matter, wrote to Santos to let him know that she had called Deutsche Bank and that the bank had told her the document was fraudulent.
“We are working to resolve this matter immediately,” Santos wrote in response, adding: “I will revert back to you as soon as I hear something on my end.”
A month later, after the prospective investor received additional pitches from the company, she wrote to ask Santos for an explanation.
“Please bear with us as we are nearing a conclusion and resolve this matter,” Santos wrote, according to the email. “I look forward to servicing you soon here at Harbor city capital.”
The prospective investor told The Post she did not hear from him again.
…On the same day the prospective investor raised red flags via email, a user tweeted at Santos to say that the Deutsche Bank document was a “complete fraud.” Santos responded weeks later, writing that Harbor City’s SBLC was “100 % legitimate,” according to his archived tweets.
Around the same time, in June 2020, the Alabama Securities Commission barred Harbor City from selling securities in the state and added it to a “Con Watch” website, describing the company and Maroney as “fraudsters” out to deceive unsuspecting customers. The commission’s inquiry into Harbor City is ongoing, a spokesman told The Post.
Santos made his congressional campaign aware of the scrutiny in Alabama but assured the staff that he had done nothing wrong, according to someone familiar with the discussions.
As Santos ran for Congress in 2020, he touted what he said were his 11 years of experience in the finance sector, including his work at Harbor City. “We are top, we’re within the Fortune 500 private-equity firms globally,” he told the Metropolitan Republican Club interviewer in October 2020.
The Post could find no evidence that Harbor City was ever named on a Fortune 500 list, and Santos did not respond to a question about the statement.
Santos has claimed he left Harbor City on March 1, 2021. He received payments from the company through April, the same month the SEC filed its complaint, The Post previously reported.
In the weeks after Harbor City was shut down, Santos formed new businesses with colleagues from the company.
…A consulting company formed by Santos after the SEC crackdown, Red Strategies USA, also counts other former Harbor City executives’ companies as controlling members, according to corporate records. They include Dames, who described himself as Harbor City’s chief financial officer, and former chief technology officer Jayson Benoit. A company linked via a shared address to Nancy Marks, Santos’s campaign treasurer, is also listed as a controlling member.
Santos was an avid salesman for Red Strategies. According to GOP operatives familiar with the discussions, he encouraged Tina Forte, the Republican who ran unsuccessfully in New York’s 14th Congressional District last year against Rep. Alexandria Ocasio-Cortez (D-NY), to sign with Red Strategies and to enlist Dames and Marks for her campaign. Santos made his pitch without disclosing that he had a stake in the company, the operatives said.
The Forte campaign paid more than $100,000 in 2021 to Red Strategies for fundraising and digital consulting, among other fees, federal records show. Forte split with the firm when she learned about its ownership, one of the operatives said.