The founder and CEO of an Orange County, California-based private equity fund has been charged with defrauding hundreds of investors out of approximately $62.5 million via a promissory note scam involving real estate, Broadway shows, and cryptocurrency.
According to the charges brought against him, Marco Giovanni Santarelli was the founder and CEO of Norada Capital Management (NCM). From June 2020 to June 2024, Santarelli solicited hundreds of investors nationwide to invest in unsecured promissory notes ranging from $25,000 to $500,000. Santarelli’s marketing campaign promised a high-yield monthly interest rate – approximately 12% to 15% – over three to seven years, and he promised his investors they would receive monthly interest payments from income generated from five sectors where NCM would invest their money: e-commerce, real estate, Broadway shows, and cryptocurrency.
Furthermore, Santarelli further promised that NCM was to be a “hands-off passive investment” that would be ideal for retirement funds. He provided balance sheets to investors listing the status of the assets, liabilities, and equity of NCM to the note holders, which listed the total asset value between $143.3 million and $224 million.
In reality, NCM did not pay the promised returns and interest payments. Instead, the fund targeted risky assets that did not provide the promised safety and security, which resulted in unprofitable investments and a large amount of debt. The balance sheets sent to investors hid more than $90 million in debt and included inflated assets.
In Ponzi-scheme fashion, Santarelli made interest payments to investors using other investors’ money. By the end of his scheme, Santarelli caused more than 500 investors to lose approximately $62.5 million.
Santarelli is charged with one count of wire fraud. He is scheduled to make his initial appearance on Oct. 20 in US District Court in Santa Ana. If convicted, Santarelli would face a statutory maximum sentence of 20 years in federal prison.
Photo courtesy of Santarelli’s LinkedIn page.
