Carlos Manuel da Silva Santos, the CEO of San Diego-based firm Ethos Asset Management, Inc., was arrested on November 12, in Newark, New Jersey, regarding fraud charges. According to the United States Department of Justice, Santos faces charges of wire fraud conspiracy related to a loan scam.
Ethos Asset Management provides financing to global companies. However, the complaint alleges that Santos asked potential borrowers to provide an upfront fee, proportional to their intended loan amount. Rather than disbursing these loans as agreed, Santos and Ethos are accused of using these funds to repay other potential borrowers, grant commissions to co-conspirators, and finance personal needs.
The complaint further alleges Santos manipulated Ethos' financial records, inflating the company's net worth to attract potential borrowers and obtain lines of credit from financial institutions, thus perpetuating the scheme. For instance, Santos reportedly enticed one victim into paying an upfront fee of over $8 million, assuring Ethos had $359,088,190.22 in a specific brokerage account that did not exist.
After his arrest, Santos appeared in court to face the wire fraud conspiracy charge that holds a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorneys E. Christopher Beeler and Carl F. Brooker, IV, are prosecuting the case.
