Norada Capital Founder Marco Santarelli Sentenced to 33 Months in $63 Million Promissory Note Ponzi Scheme

Published Oct. 19, 2026. Case status is current as of that date.

He pitched the notes as a "hands-off passive investment," perfect for retirement money, paying steady double-digit interest every month. Instead, prosecutors said, the founder of an Orange County private equity fund paid old investors with new investors' money while hiding more than $90 million in debt. On Oct. 15, 2026, Marco Giovanni Santarelli, 57, of Laguna Niguel, California, was sentenced to 33 months in federal prison and ordered to pay $63,165,357 in restitution, the U.S. Attorney's Office for the Central District of California said [1].

More than 400 investors lost about $63 million, according to prosecutors [1].

Status: Santarelli pleaded guilty in October 2025 to one count of wire fraud and has now been sentenced. He was ordered to surrender by Dec. 4, City News Service reported [2].

How the scheme worked

According to court documents summarized by federal prosecutors [1]:

1. The product. Santarelli founded and ran Norada Capital Management (NCM), a Laguna Niguel-based private equity fund. From June 2020 to June 2024, he solicited investors nationwide to buy unsecured promissory notes of $25,000 to $500,000.
2. The promise. Marketing promised a high-yield monthly interest rate of approximately 12% to 17% over three to seven years. (City News Service, reporting from the hearing, put the range at about 12% to 15% [2].)
3. The story. Investors were told interest would come from income generated by businesses NCM would invest in, including e-commerce, real estate, Broadway shows and cryptocurrency.
4. The sales pitch. In webinars, Santarelli said the notes were backed by diversified assets and offered steady, predictable monthly returns, and that NCM was a "hands-off passive investment," perfect for retirement funds.
5. The paperwork. Balance sheets sent to note holders listed total assets of $143.3 million to $224 million. In fact, they hid more than $90 million in debt and included inflated assets.
6. The Ponzi. The fund invested in risky assets, was unprofitable and carried heavy debt. "In Ponzi-scheme fashion, Santarelli made interest payments to investors using other investors' money," prosecutors said.

At the sentencing, Chief Assistant U.S. Attorney Jennifer Waier said, "When the company was going belly up, the defendant doubled down," according to City News Service [2].

The sentencing

U.S. District Judge Fred W. Slaughter imposed 33 months. According to City News Service, probation officials had recommended 51 months, the defense asked for 27, and prosecutors recommended 33 months based on Santarelli's cooperation with authorities [2].

Santarelli addressed the court. "I wanted to help people, but in the end I hurt people," he said, and later: "I didn't want to admit I failed. I was wrong." [2]

His attorney, Robert Bernhoft, argued that Santarelli did not spend lavishly on himself and said he had given up two condos in Dubai and a home in Orlando that the government is working to sell for restitution, City News Service reported. Federal authorities have seized more than $5 million connected to the scheme and are looking for more assets [1][2]. City News Service reported that about $5.5 million of the restitution had been recovered so far.

Homeland Security Investigations and the FBI investigated, with help from the Securities and Exchange Commission [1].

Red flags in promissory note offers

• High, steady monthly interest with little or no risk. The SEC lists "high returns with little or no risk" and "overly consistent returns" among Ponzi red flags [3].
• Unsecured notes sold directly to the public, especially pitched as safe for retirement savings.
• "Passive" or "hands-off" pitches delivered through webinars and seminars.
• A grab-bag of exotic investments (Broadway shows, crypto, e-commerce) behind the interest payments.
• Company-produced balance sheets with no independent audit. The SEC flags "issues with paperwork" as a warning sign [3].
• Unregistered investments or unlicensed sellers. The SEC says to check both [3].

What to do

1. Check registration of the offering and the person selling it before investing. The SEC notes that Ponzi schemes typically involve investments not registered with the SEC or state regulators, sold by unlicensed individuals or unregistered firms [3]. You can look up sellers at Investor.gov and with your state securities regulator.
2. Be wary of moving retirement money into private notes on the strength of a webinar.
3. Ask for audited financial statements and where your money will actually go.
4. If interest payments stop or get delayed, don't put in more money. The SEC warns that Ponzi promoters sometimes offer "even higher returns for staying put" [3]. Talk to an independent attorney or financial adviser.
5. Report suspected investment fraud to the SEC at sec.gov/tcr and to your state securities regulator.

Case status (as of Oct. 19, 2026)

Defendant	Court	Status as of Oct. 19, 2026	Source
Marco Giovanni Santarelli, 57, Laguna Niguel, Calif. (founder/CEO, Norada Capital Management)	Federal, C.D. Cal.	Pleaded guilty to one count of wire fraud (October 2025); sentenced Oct. 15, 2026, to 33 months and $63,165,357 restitution; ordered to surrender by Dec. 4	[1], [2]

Statuses can change.

Sources

1. U.S. Attorney's Office, Central District of California, "Former CEO of O.C.-Based Private Equity Fund Sentenced to Nearly 3 Years in Federal Prison for Running $63 Million Promissory Note Scam," Oct. 15, 2026. https://www.justice.gov/usao-cdca/pr/former-ceo-oc-based-private-equity-fund-sentenced-nearly-3-years-federal-prison
2. City News Service, "Laguna Niguel Man Gets Prison Time For $63M Ponzi Scheme," Patch (Laguna Niguel-Dana Point), Oct. 15, 2026. https://patch.com/california/lagunaniguel-danapoint/laguna-niguel-man-gets-prison-time-63m-ponzi-scheme
3. U.S. Securities and Exchange Commission, Investor.gov, "Ponzi Scheme" (accessed Oct. 19, 2026). https://www.investor.gov/protect-your-investments/fraud/types-fraud/ponzi-scheme

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