Harbor City called George Santos a 'perfect fit.' The SEC called the company a fraud. - The Washington Post

Devolder is present amended known arsenic George Santos, the 34-year-old freshman Republican congressman from New York’s 3rd Congressional District who brazenly lied to voters astir cardinal details of his biography. And the institution for which helium was “a cleanable fit,” Harbor City Capital, is nary longer successful operation. Its assets were frozen successful 2021, erstwhile the Securities and Exchange Commission accused it of moving a “classic Ponzi scheme” that had defrauded investors of millions of dollars.

The SEC ailment did not sanction Santos, who has denied knowledge of the alleged wrongdoing.

Court records, institution documents and antecedently unreported footage of workplace Zoom meetings obtained by The Washington Post, arsenic good arsenic interviews with erstwhile Harbor City employees and investors, uncover however the steadfast nurtured Santos’s ambitions and acquainted him with concern associates who person gone connected to play notable roles successful his scandal-plagued governmental career. When the institution was shuttered successful 2021, aft allegedly collecting a full of $17.1 cardinal from much than 100 individuals, Santos joined Harbor City executives successful creating different businesses and governmental consultancies present nether scrutiny aft his predetermination to Congress, according to concern registration documents.

The Post’s introspection recovered caller details astir however Santos came to enactment astatine Harbor City, and it revealed that Santos remained astatine the institution agelong aft a prospective capitalist told him the steadfast was utilizing a fraudulent slope document.

Neither Santos nor his lawyer responded to messages seeking comment.

J.P. Maroney, Harbor City’s laminitis and the antheral who hired Santos, claimed successful podcasts and YouTube videos that helium had devised reliably profitable ways to make income leads online for different companies. He said helium needed backing for this endeavor and was seeking risk-averse investors, radical who mightiness beryllium aged and who “can’t spend to commencement over,” arsenic helium erstwhile enactment it. He promised that the wealth they sent him would beryllium harmless and would fetch yearly returns successful the treble digits, often astatine 18 percent.

But according to the SEC, Maroney siphoned disconnected astir $4.5 cardinal of the investors’ wealth — much than a 4th of the magnitude raised — for his ain idiosyncratic use, including to bargain a Mercedes-Benz and a waterfront location adjacent Cape Canaveral, Fla. The location — a six-bedroom, eight-bathroom, 13,000-square-foot mansion — was the determination for a autumn 2020 fundraiser purporting to payment President Donald Trump’s reelection campaign, according to a readying papers obtained by The Post.

Four Harbor City employees oregon associates, including Santos, were listed connected the readying papers arsenic contacts for the fundraiser. Photos from the evening amusement Maroney was present. The lawsuit featured an quality by Donald Trump Jr. and his fiancee, Kimberly Guilfoyle, according to idiosyncratic progressive successful the readying who, similar galore radical interviewed for this article, spoke connected the information of anonymity due to the fact that of the matter’s sensitivity. That idiosyncratic said an creator astatine the lawsuit painted Guilfoyle’s representation live.

A spokesperson for Trump did not respond to a petition for comment, and a spokesperson for the erstwhile president’s lad and Guilfoyle said helium had nary accusation astir the event.

Maroney, 52, did not respond to a petition for remark from The Post. In court, helium has denied the SEC allegations, which were brought successful national tribunal successful Florida. The institution itself has not responded successful court.

In 1 of the 2020 Harbor City Zoom recordings, Santos said helium was pursuing affluent investors who could constitute checks for a minimum of $5 million. But helium said helium could not get Maroney to reply cardinal questions astir the institution and acknowledged not afloat comprehending an obscure signifier of recognition Harbor City claimed to beryllium utilizing to warrant the information of capitalist money.

“I inactive don’t recognize it completely,” helium said.

Still, helium presented himself publically arsenic the look of Harbor City’s New York operations.

“I’m really Harbor City Capital’s caput feline for New York City,” Santos said successful autumn 2020, during an earlier failed tally for Congress, successful an interview recorded by the Metropolitan Republican Club. In different interrogation that fall, with the Cowboy Logic Radio podcast, helium did not sanction Harbor City but said helium was managing “$1.5 billion” with the mean capitalist putting successful “about $50,000 to $175,000.” (If the mean capitalist enactment successful $175,000, much than 8,500 clients would beryllium required to scope $1.5 billion.)

“We conscionable springiness them a amended instrumentality than a accepted 401(k),” helium said connected the podcast. “In my backstage assemblage job, I americium really helping chiefly retirees unafraid their future. So that’s what I’m about. I’m astir helping people.”

After Harbor City unopen down, and with assistance from a chap erstwhile Harbor City employee, Santos successful 2021 formed a company, the Devolder Organization, that paid him astatine slightest $3.5 cardinal implicit the adjacent 2 years, according to Florida business records and financial disclosure forms helium filed arsenic a candidate. The Post could find nary grounds of a public-facing illustration for Devolder oregon immoderate grounds of concern activities. Santos loaned his run much than $700,000 but did not study immoderate income from Harbor City contempt having been paid by the institution successful 2021.

Santos won predetermination to Congress from Long Island past twelvemonth based connected an awesome idiosyncratic story. The grandson of Holocaust survivors. Educated astatine New York’s champion schools. Employed by elite banks. Now that communicative has unraveled, and Santos is nether scrutiny by prosecutors successful New York and Rio de Janeiro.

Joseph Murray, an lawyer for Santos, said connected Thursday that his lawsuit had nary cognition of wrongdoing astatine Harbor City. “In airy of the ongoing investigation, and for the payment of the victims, it would beryllium inappropriate to respond different than to accidental that Congressman Santos was wholly unaware of immoderate amerciable enactment going connected astatine Harbor City Capital,” Murray told CNN.

Maroney is an entrepreneur who has said he built his archetypal business, a T-shirt institution called “Cool Alternative,” at property 19. Online and astatine capitalist conferences, helium has pitched himself arsenic a savvy businessman with much than 2 decades of acquisition increasing companies.

But The Post recovered that helium emerged from idiosyncratic bankruptcy lone a fewer years earlier starting Harbor City. Other cardinal figures successful the institution besides had histories of fiscal oregon ineligible trouble.

Harbor City’s erstwhile main exertion serviceman faced foreclosure proceedings aft allegedly failing to wage his owe for six months successful 2016. An lawyer for the steadfast resigned from the Washington authorities barroom successful lieu of subject for alleged misconduct, and helium presently faces abstracted felony charges of fraud and wealth laundering successful Arizona. Santos has his ain past of fiscal woes: He doubly faced eviction proceedings for nonaccomplishment to wage rent.

Maroney reached imaginable investors astatine conferences and via Facebook advertizing and messages, according to tribunal records and interviews. In a webinar for prospective investors successful 2018, helium said that his method of generating income leads was specified a guaranteed nett motor that if they gave him money, helium could committedness to wage them yearly involvement rates of 18 percent. An concern of $100,000, helium said, would fetch monthly involvement payments of $1,500, and past the full main would beryllium paid backmost aft 2 years.

Maroney besides addressed questions helium said helium sometimes heard astir whether helium was moving a Ponzi strategy akin to Bernie Madoff’s. He assured them helium was not. “We don’t enactment capitalist superior astatine risk, period, the end,” helium promised successful the webinar.

The company’s Facebook leafage was populated with affirmative reviews from purported investors. The Post recovered that astir each of the accounts that near the reviews connected the company’s leafage utilized clip creation oregon images of different radical — 2 featured promo shots of nonrecreational models and different the headshot of a California existent property cause of a antithetic sanction — arsenic their illustration images. The profiles showed small oregon nary enactment different than praising Harbor City, and astir listed nary Facebook friends.

Nevertheless, the company’s income pitches succeeded successful persuading much than 100 investors to nonstop money, according to the SEC.

Gregory Vincent, a small-business proprietor successful Northern California, told The Post helium invested $400,000 successful Harbor City. He said helium had seen a Facebook advertisement featuring Maroney talking astir the 18 percent returns helium was earning.

“I had immoderate wealth that I wanted to invest, and it sounded great. He sounded similar a fantastic guy. He was an fantabulous speaker,” Vincent said.

Vincent, 58, said that portion helium received immoderate payments from Harbor City, they stopped astir the clip of the SEC’s investigation, and helium alleges successful a suit against Harbor City that his main concern was ne'er afloat repaid. He said that aft moving other hours for years, helium has had to enactment disconnected what helium hoped would beryllium an aboriginal status due to the fact that of the wealth helium lost.

“I worked my butt disconnected to marque the wealth that I did,” helium said.

Some erstwhile employees said they saw signs thing was amiss.

Ajit Kumar, of Mumbai, said helium served arsenic Harbor City’s main fiscal serviceman successful 2016 aft gathering Maroney online. But helium spoke to Maroney lone occasionally and recovered that Maroney was unwilling to stock cardinal details astir the company’s finances, Kumar told The Post. He discontinue successful 2017 aft little than a year.

“I had requested entree to institution books, slope accounts and different systems which were utilized successful the organization, which were ever promised but ne'er provided,” Kumar said. “All I got were immoderate Excel files with basal information.”

In December 2019, Maroney contacted Santos astir Harbor City, Santos recounted successful 1 of the Zoom recordings obtained by The Post. He said Maroney had been a “client” of his whom helium came to cognize successful meetings implicit meal and lunch. Santos said Maroney “came to maine astatine 4 o’clock successful the morning,” emailing him with details astir the company’s enslaved offering.

“I jokingly said, ‘Are you hiring?’ He said, ‘Are you looking?’” Santos added, “I inactive person those emails, by the way.”

By January 2020, Santos had a Harbor City email address, according to a court-appointed lawyer overseeing liquidation of the firm’s assets. That was six months earlier Santos’s hiring was announced publicly.

Santos was successful the aboriginal stages of his archetypal tally for Congress. His relation astatine Harbor City was to find investors successful New York, according to interior institution emails and a erstwhile employee. Santos was not palmy successful that endeavor done the summertime of 2020, the erstwhile worker said, but Maroney aboriginal told this idiosyncratic that Santos had located idiosyncratic to invest. The Wall Street Journal reported Saturday that Santos secured an concern for the institution successful the six figures.

In his enactment for Harbor City, Santos used his mother’s maternal surname, Devolder, portion of what helium described arsenic an effort to compartmentalize his ambitions. “From a precise aboriginal age, I became George Devolder the businessman and George Santos the politician. I’ve managed to support that precise separate,” helium said successful 1 of the Zoom recordings.

He said helium did not privation to notation his tally for Congress successful communications with imaginable Harbor City investors. “I tin truly spell to jailhouse if we nonstop retired an email saying, ‘As immoderate of you whitethorn know, I’m moving for office.’ It’s soliciting astatine that point,” helium said. “I don’t request shiny metallic bracelets.” Santos did not respond to a question astir what helium meant.

But helium did, successful 1 instance, leverage a governmental interaction successful his hunt for investors, according to a chap legislature candidate.

Josh Eisen, a affluent self-funded campaigner who ran unsuccessfully for Congress from New York successful 2020, told The Post helium met Santos aboriginal that twelvemonth astatine a Republican event. Eisen, 51, said Santos aboriginal approached him with 2 concern opportunities, 1 involving a guaranteed-return concern and the different involving a cocoa business. He donated to Santos’s run but decided against investing with him.

In the Zoom recordings, Santos acknowledged the unit helium felt to perform. “Right now, I’m warring the conflict of my beingness astatine Harbor City,” helium said successful one, explaining, “I request to adjacent a large deal. I request to amusement J.P. helium didn’t marque a mistake … I respect him a lot.”

Harbor City was past claiming that a “top tier” slope had issued it a Standby Letter of Credit, oregon an SBLC, designed to guarantee the company’s quality to wage backmost investors, according to the SEC and draught capitalist pitches obtained by The Post. But nary specified SBLC ever existed, the SEC alleges.

In aboriginal June 2020, Santos spoke to a prospective capitalist who was considering cutting a cheque for astatine slightest $50,000, according to emails obtained by The Post. Another Harbor City worker sent her a papers with a logo from Deutsche Bank, a transcript of which was obtained by The Post, that appeared to amusement the slope had wired 5 cardinal euros to a Harbor City relationship for the issuance of an SBLC. The Post obtained a transportation papers circulated wrong Harbor City that included a placeholder for an representation of Maroney holding up the purported Deutsche Bank transfer.

Emails amusement that the prospective investor, who spoke to The Post connected the information of anonymity to sermon a delicate concern matter, wrote to Santos to fto him cognize that she had called Deutsche Bank and that the slope had told her the papers was fraudulent.

“We are moving to resoluteness this substance immediately,” Santos wrote successful response, adding: “I volition revert backmost to you arsenic soon arsenic I perceive thing connected my end.”

A period later, aft the prospective capitalist received further pitches from the company, she wrote to inquire Santos for an explanation.

“Please carnivore with america arsenic we are nearing a decision and resoluteness this matter,” Santos wrote, according to the email. “I look guardant to servicing you soon present astatine Harbor metropolis capital.”

The prospective capitalist told The Post she did not perceive from him again.

Emails amusement that Santos forwarded her concerns to Paul Donion, the lawyer for Harbor City who has been accused of misconduct successful Arizona and Washington state. In an email replying to Santos, Donion said that the SBLC was successful spot and that immoderate disorder was owed to a “disconnect” betwixt 1 of the firm’s partners and Deutsche Bank.

A spokesperson for the slope told The Post, “Harbor City Capital was not a lawsuit of Deutsche Bank.”

Donion, who has pleaded not blameworthy to the Arizona charges, did not respond to messages seeking comment. Donion’s lawyer said that portion Donion had been deposed successful the Harbor City tribunal case, helium had been accused of nary wrongdoing successful that litigation. He emphasized that the Harbor City substance has nary transportation to the Arizona charges oregon Donion’s resignation from the Washington bar.

On the aforesaid time the prospective capitalist raised reddish flags via email, a idiosyncratic tweeted astatine Santos to accidental that the Deutsche Bank papers was a “complete fraud.” Santos responded weeks later, penning that Harbor City’s SBLC was “100 % legitimate,” according to his archived tweets.

Around the aforesaid time, successful June 2020, the Alabama Securities Commission barred Harbor City from selling securities successful the authorities and added it to a “Con Watch” website, describing the institution and Maroney arsenic “fraudsters” retired to deceive unsuspecting customers. The commission’s enquiry into Harbor City is ongoing, a spokesperson told The Post.

Santos made his legislature run alert of the scrutiny successful Alabama but assured the unit that helium had done thing wrong, according to idiosyncratic acquainted with the discussions.

As Santos ran for Congress successful 2020, helium touted what helium said were his 11 years of acquisition successful the concern sector, including his enactment astatine Harbor City. “We are top, we’re wrong the Fortune 500 private-equity firms globally,” helium told the Metropolitan Republican Club interviewer successful October 2020.

The Post could find nary grounds that Harbor City was ever named connected a Fortune 500 list, and Santos did not respond to a question astir the statement.

Santos has claimed helium near Harbor City connected March 1, 2021. He received payments from the institution done April, the aforesaid period the SEC filed its complaint, The Post previously reported.

In the weeks aft Harbor City was unopen down, Santos formed caller businesses with colleagues from the company.

One of those businesses was the Devolder Organization, the household institution from which helium has reported receiving an yearly wage of $750,000 and dividends totaling astatine slightest $1 cardinal per twelvemonth successful 2021 and 2022. Santos established that institution with the assistance of a steadfast created by erstwhile Harbor City enforcement DeVaughn Dames. Dames did not respond to a petition for comment.

It was an astonishing alteration successful fortunes: His fiscal disclosure form from his tally for Congress successful 2020 shows helium earned nary wage that year, and conscionable $55,000 successful 2019, from LinkBridge Investors, a steadfast that hosts conferences for investors and plus managers. (That aforesaid year, Maroney spoke astatine a LinkBridge conference, according to a quality release that described him arsenic a seasoned capitalist and entrepreneur.)

A consulting institution formed by Santos aft the SEC crackdown, Red Strategies USA, besides counts different erstwhile Harbor City executives’ companies arsenic controlling members, according to firm records. They see Dames, who described himself arsenic Harbor City’s main fiscal officer, and erstwhile main exertion serviceman Jayson Benoit. A institution linked via a shared code to Nancy Marks, Santos’s run treasurer, is besides listed arsenic a controlling member.

Santos was an avid salesman for Red Strategies. According to GOP operatives acquainted with the discussions, helium encouraged Tina Forte, the Republican who ran unsuccessfully successful New York’s 14th Congressional District past twelvemonth against Rep. Alexandria Ocasio-Cortez (D-N.Y.), to motion with Red Strategies and to enlist Dames and Marks for her campaign. Santos made his transportation without disclosing that helium had a involvement successful the company, the operatives said.

The Forte run paid much than $100,000 successful 2021 to Red Strategies for fundraising and integer consulting, among different fees, national records show. Forte divided with the steadfast erstwhile she learned astir its ownership, 1 of the operatives said.

Forte declined to comment. A Florida lawyer who represented Red Strategies successful the quality did not respond to requests for comment.

Neither Benoit nor Marks responded to requests for comment.

In caller months, since Maroney was forced to shutter Harbor City, helium has remained progressive connected Facebook, posting astir business, enactment and moneymaking methods. In August, with his assets frozen and amid the national probe, helium solicited input from his followers for a caller podcast and publication that helium claimed would beryllium forthcoming. Their purported title: “The Flop Factor: How To Fail Your Way To Success!”

Two months later, helium secured a enactment successful the SEC case, saying that helium was the people of a transgression probe into the Harbor City matter. Neither Maroney nor Santos has been charged with a crime.

Santos was elected to Congress successful November, helping the GOP unafraid its constrictive bulk successful the House. He has apologized for what helium called “résumé embellishment” but rejected calls for his resignation.

“Resilient radical marque it happen,” helium said successful 1 of the Zoom recordings from 2020, erstwhile helium was struggling to merchantability investments successful Harbor City. “It doesn’t substance how. They conscionable marque it happen. And that’s what I’m gonna do.”

Samuel Oakford contributed to this report.