Scammers in La Jolla – Carl Vonderau

La Jolla, because of its wealth, has always attracted scammers. So I wasn’t surprised. that another one cropped up. The company is called Ethos Asset Management. I never heard of it, but back in 2023 the artificial intelligence company Beyond Limits accused the CEO, Carlos Santos, of fraud. But it took awhile to catch him.

Ethos offered loans to potential borrowers who paid upfront fees. These fees are common in private and bank financing deals. The finance company is supposed to return the fee if they don’t provide the loan. Unfortunately, most of the time Santos didn’t make the loan or return the fee. A few times he used the fees from other borrowers to fund loans to new clients.

Paying fees to a con artist who claims he will lend you money or eliminate tax issues is an old scam. They just steal the upfront fees. But Santos took it to a whole new level. Prosecutors estimate that 53 companies around the world lost more than $100 million.

Ethos was a very small firm. Why would someone enter into a transaction with such bit player? Because Santos had quite a story about how he funded projects around the world. His LinkedIn profile says that he has numerous postgraduate degrees and has received awards and honors from a well-known accounting firm, Banco de Portugal, and universities. The site also shows interviews on Bloomberg, CNBC, and local news. And he’s a philanthropist too, of course.

But some borrowers wanted more tangible poor of his capabilities. Santos had that covered too. He provided a bank statement from Citibank indicating that Ethos had more than $100 million in an account. He also had financial statements signed by a bookkeeper attesting that his company had more than $2.2 billion in assets. But the bank statement and the financial statements were all fake.

What did he use the money for? To fund some of the loans and to pay off himself and his co-conspirators.

Homeland Security led the investigation, and it took more than a year. They had to wait to arrest Santos until he returned to the U.S. from abroad in November, 2023. He pleaded guilty this month and in April will probably be sentenced to 15 years or more.

It seems that with good programming skills and a convincing story just about anyone can steal big money.