NewsU.S. and the World


George Santos charged with fraud, money laundering and more crimes

Posted at 10:08 AM, May 10, 2023
and last updated 2023-05-10 12:08:48-04

Federal prosecutors have charged Republican Rep. George Santos of New York with fraud, money laundering and other crimes, according to an indictment unsealed Wednesday, a stunning development following months of scrutiny of the freshman congressman that began after lies he told about his background began to unravel.

Santos, 34, was arrested Wednesday morning and is in custody, the Justice Department said. He is expected to appear before U.S. Magistrate Judge Arlene Lindsay at the federal courthouse in Central Islip, New York, on Wednesday afternoon. 

The 13-count indictment returned by a federal grand jury Tuesday includes seven counts of wire fraud, three counts of money laundering, one count of theft of public funds and two counts of making materially false statements to the House of Representatives. If convicted, Santos faces up to 20 years in prison for the most serious charges.

"Taken together, the allegations in the indictment charge Santos with relying on repeated dishonesty and deception to ascend to the halls of Congress and enrich himself," U.S. Attorney Breon Peace said in a statement. "He used political contributions to line his pockets, unlawfully applied for unemployment benefits that should have gone to New Yorkers who had lost their jobs due to the pandemic, and lied to the House of Representatives."

The 20-page indictment lays out a scheme in which Santos operated a limited liability company to allegedly defraud prospective supporters of his 2022 congressional campaign. Federal prosecutors allege that through the scheme, Santos induced supporters to donate money to the unnamed company "under the false pretense that the money would be used to support" his candidacy. He then spent "thousands of dollars" of the solicited donations on personal expenses including luxury designer clothes and credit card payments.

Santos allegedly directed an unidentified political consultant to tell supporters of his candidacy that the company was a tax-exempt social welfare organization, and the contributions they made would be used in support of his congressional campaign. Prosecutors said the company was neither a 501(c)(4) nor an independent expenditure committee, and Santos "converted most of those funds to his own personal benefit."

The indictment also alleges Santos fraudulently collected enhanced unemployment benefits from New York state during the COVID-19 pandemic, though he was employed at the time as a regional director at a Florida-based investment firm earning about $120,000 a year. He received more than $24,000 in unemployment benefits for which he was not eligible, prosecutors allege.

Federal prosecutors go on to claim that Santos engaged in efforts to mislead the House and the public about his financial condition in connection with two congressional campaigns, an unsuccessful 2020 House bid and his 2022 race.

During his 2020 campaign, Santos filed two House disclosures, in which he "falsely certified" that his only earned income was a salary totaling $55,000 during the relevant reporting period and the only compensation he received exceeding $5,000 came from an "unspecified commission bonus."

But the indictment states that Santos overstated the income he received and failed to disclose his salary from the Florida investment firm.

In September 2022, for his second congressional campaign, prosecutors said Santos overstated his income and assets on a House disclosure form and falsely claimed he earned $750,000 from the Devolder Organization, a Florida-based entity of which he was the sole beneficiary and received between $1 million and $5 million in dividends from the firm.

He also allegedly lied about having a checking account with between $100,000 and $250,000, and a savings account with between $1 million and $5 million. Prosecutors, however, say these assertions were false.

The charges against Santos were filed by federal prosecutors from the Eastern District of New York, one of several investigative entities examining the GOP lawmaker's congressional campaign and financial dealings. Local and state authorities, as well as the FBI and law enforcement in Brazil, have also been investigating Santos.

The congressman was elected to represent New York's 3rd Congressional District last November and has spent the months since then dogged by questions about his education and professional experience, as well as his finances and campaign spending.

Santos has been accused of illegally using funds raised during his 2022 congressional campaign for personal expenses and for submitting false information about the source of his donations as well as campaign expenses. A series of payments listed on Santos' campaign finance filings for exactly $199.99, one cent below the $200 threshold where receipts are required, was also uncovered, further raising questions about his campaign spending.

The FBI was probing Santos' alleged role in purporting to raise funds for a veteran's dying dog through pet charity, while the Securities and Exchange Commission has scrutinized his work at Harbor City Capital, a financial firm that was shut down in 2021 for allegedly operating as a Ponzi scheme.

Santos was questioned by Seattle detectives and the U.S. Secret Service in 2017 as part of an investigation into a scheme to skim ATM numbers. A sworn declaration the agency received from a Brazilian man arrested for installing skimmers at a Seattle bank claimed Santos was "in charge of" the credit card fraud ploy.

Santos' troubles have followed him to Capitol Hill, where he recused himself from two House committees due to the "ongoing attention" from the multitude of investigations into his alleged misconduct. The House Ethics Committee opened an investigation into Santos in March, part of which involves whether he engaged in unlawful activity regarding his 2022 congressional campaign and whether he failed to properly disclose required information on House statements.

Santos admitted to "embellishing" his resume, but has otherwise denied any other wrongdoing.

The steady flow of revelations about the New York Republican has led to calls for his resignation, including from Republicans in the New York delegation. Many have reiterated their demands for Santos to step down from his House seat in light of the criminal charges filed against him.

Santos, though, has resisted the pressure to leave Congress and announced in April that he would seek a second term in 2024.

House Speaker Kevin McCarthy has also continued to rebuff questions about whether he would call for Santos to resign, telling reporters Tuesday that he would do so if Santos is eventually convicted. Republicans have a slim majority in the House, and McCarthy can only afford four defections in order for his legislative priorities to pass.

"If a person is indicted, they're not on committees," McCarthy said. "They have the right to vote, but they have to go to trial."