Columbia Businessman Admits to Using Client Money for His Own Illegal Benefit
BALTIMORE, MD—Pedro Santiago, age 43, of Columbia, Maryland pleaded guilty today to wire fraud in connection with two fraud schemes in which he illegally used $282,000 of his clients’ money.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to his plea, from February 2009 to January 2010, Santiago engaged in two separate fraud schemes, holding himself out in both schemes as a managing partner and business consultant for DST Services, located at 7500 Greenway Center Drive in Greenbelt, Maryland. DST Services was not registered to do business in Maryland.
In the first scheme, Santiago promised that he would obtain a business line of credit for a victim of between $550,000 and $750,000, if the victim paid Santiago $20,500. On February 12, 2009, Santiago caused to be wired $20,500 from the victim’s bank account in California into Santiago’s account in Maryland. Instead of obtaining the line of credit for the victim, Santiago spent the money on himself and others.
In the second scheme, Santiago promised victims that if they loaned him money, or invested with him, he would broker a deal involving crude oil or other commodities in which the victims would receive a return on their loan or investment. Santiago caused five victims to wire transfer or send by check a total of $261,500. Instead of using the money to broker deals involving commodities, Santiago used the money for himself or others.
Santiago faces a maximum sentence of 20 years in prison followed by three years of supervised release and a fine of $250,000. Santiago has agreed to forfeit and pay restitution of $282,000, the total loss under both schemes. U.S. District Judge J. Frederick Motz scheduled his sentencing for January 27, 2015, at 2:15 p.m.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorney Nicolas A. Mitchell, who is prosecuting the case.