Santos Indicted Over Credit Card Scheme That Was First Reported By TPM

NEW YORK, NEW YORK - APRIL 04: U.S. Rep. George Santos (R-NY) walks through the crowd gathered outside the courthouse where former U.S. President Donald Trump will arrive later in the day for his arraignment on Apri... NEW YORK, NEW YORK - APRIL 04: U.S. Rep. George Santos (R-NY) walks through the crowd gathered outside the courthouse where former U.S. President Donald Trump will arrive later in the day for his arraignment on April 4, 2023 in New York City. With his indictment, Trump will become the first former U.S. president in history to be charged with a criminal offense. (Photo by Drew Angerer/Getty Images) MORE LESS
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In January, TPM broke the story that donors to Rep. George Santos’ (R-NY) 2022 campaign were charged for contributions they didn’t intend to give. On Tuesday, roughly nine months after that story, federal prosecutors in New York charged Santos with credit card fraud and identity theft related to a “scheme” that mirrors the allegations first revealed in TPM’s reporting. 

The 23-count superseding indictment alleges Santos took financial information from his donors and ran their credit cards for more cash during last year’s election cycle. Per the federal prosecutors, Santos “repeatedly, without their authorization” charged the credit cards of his contributors before siphoning the money off to himself, his own campaign, and other election operations. 

Santos was previously indicted in May on fraud and money laundering charges related to his alleged efforts to receive unemployment benefits while he was employed. At the time, prosecutors accused Santos of having “pocketed campaign contributions and used that money to pay down personal debts and buy designer clothing.” There are 10 additional counts in the new superseding indictment, including aggravated identity theft, access device fraud, wire fraud, conspiracy, false statements, and falsifying records. 

Santos has denied any wrongdoing and insisted he is ready to take on a growing list of challengers who have lined up to run for his seat amid his escalating legal woes. The congressman did not respond to a request for comment from TPM about the new charges. 

Santos was elected last November. Soon afterward, news broke that he had lied about his resume and personal story on the campaign trail. Santos admitted to the fabrications but steadfastly refused to step down from the House seat his falsehoods had helped him to win. 

In a series of stories, which ran from December 2022 through February 2023, TPM unwound the byzantine tale of Santos’ ties to an alleged pyramid scheme, the links executives from that company had to his political operation, and allegations donors were ripped off by the campaign. Those articles noted extensive irregularities in the campaign’s financial reports, including apparent personal expenses. Our coverage included an interview with an operative who briefly worked with Santos’ campaign before quitting because they got “nervous” and “defensive that things were not on the up and up.”

In this latest indictment, prosecutors accused Santos of stealing donor information to run their credit cards in a “scheme” that was shocking in its scope and brazenness. One instance detailed in the indictment describes an unfortunate donor who purportedly agreed to an initial contribution. Santos allegedly ended up running the person’s credit cards for more than $44,800 over the course of several months. According to prosecutors, at least $11,000 of those charges went directly to Santos’ personal bank account. Despite these shocking details, the indictment doesn’t reveal the full extent of the alleged “credit card scheme.” While it outlines a few eye-popping allegations, the indictment claims Santos used the credit card information of other unnamed donors to make charges as well. 

TPM’s initial story on the allegations that Santos’ campaign was improperly charging donors noted multiple people who felt they were ripped off by Santos also had questionable charges from the campaign of Tina Forte, who challenged Rep. Alexandria Ocasio-Cortez (D-NY) last year. During that race, filings show Forte was paid more than $14,000 by her own campaign for “expense reimbursement.” The new indictment does not name Forte, but it does note an instance where  prosecutors said Santos used donors’ credit card information to transfer money to “other candidates for elected office.” Forte, who is challenging Ocasio-Cortez again in 2024, did not respond to a request for comment about the new charges. 

Both Forte and Santos have extensive links to executives the congressman worked with at Harbor City, a Florida-based firm that was described as having operated in “a classic Ponzi scheme fashion” in a 2021 complaint made by the Securities and Exchange Commission. Some of those business associates were tied to Santos’ alleged credit card “scheme” in the new indictment. 

One firm, identified in the indictment as Company 1, appears to match Redstone Strategies. Prosecutors said that Company 1 was registered on November 1, 2021 in Merritt Island, Florida, and that one of its authorized managers was the Devolder Organization LLC, a company Santos once identified as “his family’s firm.” A review of publicly available Florida corporate records shows that Redstone matches that description. 

Along with the “Devolder Organization,” the other authorized manager of Redstone Strategies was a former Harbor City executive named Jayson Benoit. During 2021, Forte’s campaign made 76 payments totaling over $110,000 to “RED STRATEGIES USA, LLC,” a firm whose authorized members included the Devolder organization, as well as other companies linked to Benoit and Harbor City executives. Benoit did not immediately respond to a request for comment. 

TPM previously reported that Redstone, founded by a business associate of Santos’, contributed to a New York state-level Political Action Committee associated with Santos and his sister. Prosecutors said on Tuesday that Santos used Redstone as part of his credit card schemes.

According to the indictment Santos effectively used Redstone Strategies as a means to con people into contributing to his campaign. The plot allegedly worked like this, according to prosecutors: at Santos’ direction, an unnamed aide would tell potential donors that Redstone was a non-profit “social welfare organization,” and therefore not subject to contribution limits. Redstone, the person allegedly told donors, would independently buy TV ads, meaning that Santos supporters could help his campaign while giving more cash than what’s limited by federal law. 

That was a lie, prosecutors said. Redstone was neither a non-profit nor registered as an election committee. However, prosecutors said, it still served a useful purpose: it allowed Santos to move contributions to his own bank account. He then spent the money on “luxury designer clothing,” credit card payments, car payments, paying down his debts, and bank transfers to his “personal associates.” 

The frauds which Santos allegedly committed to fund his campaign and his own lifestyle purportedly lasted from late 2021 through 2022. His campaign treasurer Nancy Marks pleaded guilty on Thursday to a separate scheme in which she agreed to help Santos lie about contributions which did not exist, including a dubious $500,000 loan from Santos himself in order to qualify for financial and logistical support from a Republican Party committee. 

Those allegations are included in the superseding Santos indictment, including a moment in October 2021 when, faced with lower-than-desired campaign contributions, Santos allegedly told campaign staffers, “We are going to do this a little different.” 

Daniel Weiner, director of the Elections and Government Program at the Brennan Center, described the initial allegations uncovered by TPM as “extraordinary.” After the indictment was revealed, Weiner noted nothing like this has ever happened before. 

“The identity theft and credit card fraud charges are pretty unprecedented,” Weiner told TPM on Tuesday. “I certainly can’t think of any sitting member of Congress in the modern era who has faced anything similar.”

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