A Laguna Niguel man who ran a private equity fund was sentenced to 33 months in federal prison for defrauding hundreds of investors out of approximately $63 million through a promissory-note scheme. Marco Giovanni Santarelli, 57, founded and led Norada Capital Management, and a federal judge also ordered him to pay back more than $63 million to the people he took money from.
United States District Judge Fred W. Slaughter ordered Santarelli to pay $63,165,357 in restitution, according to a post from FBI Los Angeles
. Santarelli pleaded guilty to one count of wire fraud in October 2025, after being charged by federal prosecutors the previous month, as reported by
InvestmentNews
. Federal prosecutors have said the sentencing stemmed from a scheme that defrauded hundreds of investors of approximately $63 million, though the Justice Department's own description of the case has used that figure with low certainty around the exact scope.
How the Promissory Notes Were Pitched
Norada Capital Management operated as a Laguna Niguel-based private equity fund, and Santarelli solicited investors from June 2020 through June 2024 to buy unsecured promissory notes ranging from $25,000 to $500,000, per the same account from InvestmentNews. A separate report on the case's charging stage, from the Silicon Valley outlet, described the scheme as bilking some 500 clients nationwide of $62.5 million in investments — a figure that differs somewhat from the roughly $63 million cited in the FBI's sentencing announcement, illustrating how reported totals have varied across the life of the case.
Accounts of what investors were promised also diverge. InvestmentNews reported that the notes allegedly promised monthly interest rates of 12% to 17%, with some offering a 5% bonus payment, while the Silicon Valley report described investors being promised monthly interest payments of around 12% to 15% over three to seven years. Both figures trace back to allegations in the case rather than a single agreed-upon structure, and the dossier does not resolve which description is accurate.
Hidden Debt and a Cycle of Payments
Authorities alleged that balance sheets Norada sent to investors concealed more than $90 million in debt and included inflated assets, the news organization's report states. Investigators also alleged that Santarelli used money from some investors to make interest payments to other investors, a pattern consistent with the kind of robbing-Peter-to-pay-Paul structure often seen in note-based investment schemes.
A civil complaint referenced in the InvestmentNews report adds further detail to the scheme's final months. It alleges Norada issued promissory notes from at least July 2021 through at least June 2024, then stopped making required note payments to a pair of investors identified as the Rosses that same month. On June 20, 2024, Santarelli allegedly emailed investors stating that distributions would be suspended because of “current market conditions and unforeseen financial challenges,” according to the complaint described by InvestmentNews. The complaint further alleges that Norada later converted the notes into equity that turned out to be virtually worthless, though those civil allegations have not been proven in court.
Other Investors Sought Recourse Before Sentencing
The Rosses allege in their complaint that they invested $250,000 through three separate Norada notes, per InvestmentNews. Another investor, Bill Keown, filed his own lawsuit against Santarelli in September 2024 and received a default judgment for $750,000, according to the Silicon Valley report. Those civil actions moved forward well before Santarelli's federal guilty plea and sentencing.
The U.S. Securities and Exchange Commission has also pursued action connected to the case, alleging that Norada raised tens of millions of dollars through unsecured, high-yield promissory notes that Santarelli falsely described as having “strong” characteristics, according to a litigation release from the U.S. Securities and Exchange Commission. Separately, the Justice Department has said the wire fraud charge against Santarelli carried a statutory maximum of 20 years in federal prison if convicted, according to the U.S. Department of Justice, though he ultimately received a 33-month sentence.
