Key Takeaways
- • Marco Giovanni Santarelli, founder and CEO of Laguna Niguel-based private equity fund Norada Capital Management (NCM), was sentenced to 33 months in federal prison for wire fraud tied to a promissory note scheme.
- • Santarelli was ordered to pay $63,165,357 in restitution after more than 400 investors lost approximately $63 million between June 2020 and June 2024.
- • The scheme promised 12% to 17% monthly-interest unsecured promissory notes; balance sheets reportedly hid more than $90 million in debt and included inflated assets.
- • Federal authorities have seized more than $5 million in proceeds connected to the scheme and continue to search for additional assets.
Summary
According to court documents, Santarelli founded and led Norada Capital Management (NCM), a private equity fund based in Laguna Niguel. From June 2020 to June 2024, he solicited hundreds of investors nationwide to purchase unsecured promissory notes ranging from $25,000 to $500,000, promising monthly interest of approximately 12% to 17% over three to seven years. He told investors the returns would come from five categories of businesses in which NCM would invest, including e-commerce, real estate, Broadway shows, and cryptocurrency. Through webinars, he described the notes as backed by diversified assets and marketed NCM as a "hands-off passive investment" suited to retirement funds.
Santarelli provided investors with balance sheets showing total asset values between $143.3 million and $224 million. Prosecutors allege these materials concealed more than $90 million in debt and overstated assets. NCM did not pay the promised returns; the fund instead made risky investments that were unprofitable and generated little return. Santarelli paid interest to earlier investors using money from newer investors, consistent with a Ponzi scheme. In total, more than 400 investors lost approximately $63 million.
Homeland Security Investigations and the FBI investigated the matter with assistance from the U.S. Securities and Exchange Commission. Federal law enforcement has seized more than $5 million in proceeds linked to the scheme and continues to pursue additional assets.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.