GOP Rep. Santos has ties to investment firm allegedly involved in a 'Ponzi scheme'

 January 15, 2023

The Washington Examiner reports that U.S. House Rep. George Santos (R-NY) is facing even more scrutiny following a revelation that he has ties to an investment firm that has allegedly been running a Ponzi scheme. 

This comes as Santos has been facing a significant bipartisan backlash for having, during his campaign, lied about a number of biographical facts, including his education, work experience, and much more.

What we know:

The Wall Street Journal first reported this information on Saturday. According to the outlet, Santos was the director at the investment firm Habor City Capital Corp. for a period from January 2020 to April 2021. The company reportedly hired him to raise capital for the firm.

The Journal reports that Santos, during his time as the director, did manage to obtain "at least one significant investment from a wealthy investor" for the company.

The Journal, however, goes on to report that "when the investment failed to deliver on the promised returns, according to one of the people, Mr. 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 alleged Ponzi scheme

The same month that Santos left Harbor City Capital, the U.S. Securities and Exchange Commission (SEC) filed a complaint claiming that the company was involved in a "classic Ponzi scheme."

According to the complaint, Harbor City promised investors 10% to 60% annual returns on their investments. The company told the investors that their money was being used to finance "customer lead generation campaigns." And, the company claimed that it would obtain a return on the investments by reselling the leads to other businesses.

The SEC complaint, however, says that the money was used by the company's owner - Jonathan Moroney - for personal expenses.

Harbor City Capital has since shut down.

Was Santos involved?

Santos maintains that he was not involved in the alleged scheme.

Santos was first asked about the situation by the Daily Beast back in April of 2022. He told the outlet that he was "as distraught and disturbed as everyone else" about the allegations. But, he denied any involvement in the alleged wrongdoing.

Santos continues to maintain this position. Joseph Murray, Santos's attorney, told CNN:

As to any questions about Harbor City Capital, in light of the ongoing investigation, and for the benefit of the victims, it would be inappropriate to respond other than to say that Congressman Santos was completely unaware of any illegal activity going on at Harbor City Capital.

The SEC did not name Santos in its complaint. Santos, however, is said to have kept a relationship with several individuals from Harbor City Capital. And, he is also said to have received payments from the company after his departure in April 2021.

It appears that there is still more to be discovered about this situation.

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Thomas Jefferson
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