Carlos Manuel da Silva Santos, founder and CEO of Ethos Asset Management, Inc., has pleaded guilty to charges of wire fraud conspiracy and aggravated identity theft. The plea was entered in a federal court in San Diego. Santos, who is from Portugal, has been detained since his arrest on November 13, 2023, in Newark, New Jersey.
Santos admitted that he and others misrepresented Ethos as a "full-service project financing" company to attract borrowers who were required to pay an upfront fee as collateral. Despite these fees being paid by borrowers, the promised funding often did not materialize. Santos acknowledged using funds from these upfront fees for purposes other than those agreed upon with borrowers.
The plea agreement revealed that Santos and his co-conspirators falsified financial statements to inflate Ethos's financial standing. For example, a bank statement sent in August 2021 falsely indicated Ethos had over $100 million available when it did not. Further falsifications occurred in February and May 2023 with annual financial statements falsely showing over $2.2 billion in assets.
Santos's fraudulent activities extended internationally, impacting victims in the United States and other countries such as Brazil and Turkey. U.S.-based victims alone suffered losses amounting to $17,125,000 due to this scheme.
U.S. Attorney Tara McGrath emphasized the commitment of her office to hold perpetrators accountable: "Untold numbers of people fall victim to fraud schemes every year," she said. Special Agent Shawn Gibson highlighted the efforts of Homeland Security Investigations (HSI) and its partners: “This successful outcome is the result of an extensive, long-term investigation where our dedicated agents... worked tirelessly.”
Sentencing is set for April 18, 2025, before U.S. District Judge Robert S. Huie. The case is being prosecuted by Assistant U.S. Attorneys E. Christopher Beeler, Carl F. Brooker IV, and Amy B. Wang.
Individuals who believe they are victims can contact Homeland Security Investigations at ethos-victim@hsi.dhs.gov.