SAN DIEGO (KGTV) — The CEO of San Diego-based financial firm Ethos Asset Management, Inc., was arrested in New Jersey Sunday night on wire fraud charges, according to prosecutors.
Carlos Santos made his first court appearance Monday in Newark, New Jersey, after he was accused of a loan scam. The 29-year-old Portuguese CEO orchestrated the fraud through his company, which offers financing to international businesses, authorities said.
According to the complaint, Santos demanded upfront fees from prospective borrowers, promising significant loans in return.
However, federal authorities said Santos and his company did not fulfill their commitments, using those fees to repay other prospective borrowers, issue commissions to his team and pay for personal expenses.
According to the U.S. Attorney's Office, businesses and individuals appeared to have been drawn into the scheme under false assumptions of Ethos' financial strength. According to court documents, Santos managed to convince one victim to pay an upfront fee of more than $8 million after he represented that Ethos had $359 million in a specific brokerage account.
"Records established that Ethos had no such account," the press release from the U.S. Attorney's Office says.
The complaint also stated that Santos changed his company's bank statements to inflate account balances to prospective borrowers, sometimes by as much as $100 million.
If convicted, Santos faces a maximum penalty of 20 years in prison and a $250,000 fine.
The Ethos Asset Management website, which was still active as of 1:45 p.m. on Nov. 14, listed the address for the company's west coast headquarters as 4660 La Jolla Village Drive in San Diego.
