Norada Capital founder Marco Santarelli sentenced to 33 months over $63M promissory-note fraud
Marco Giovanni Santarelli, founder and CEO of Laguna Niguel fund Norada Capital Management, was sentenced to 33 months in federal prison and ordered to pay $63,165,357 in restitution for a promissory-note scheme that cost more than 400 investors about $63 million.
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Source: hoodline.com · published
What happened
Hoodline reported on 17 October 2026 that Marco Giovanni Santarelli, 57, of Laguna Niguel, California, founder of private equity fund Norada Capital Management, was sentenced to 33 months in federal prison. The sentence was handed down on 15 October 2026 by U.S. District Judge Fred W. Slaughter, who also ordered him to pay $63,165,357 in restitution, according to an FBI Los Angeles post and the U.S. Attorney's Office for the Central District of California. Santarelli pleaded guilty to one count of wire fraud in October 2025.
How the scheme worked
From June 2020 to June 2024, Santarelli solicited investors nationwide to buy unsecured promissory notes ranging from $25,000 to $500,000. Hoodline notes that accounts differ on the promised returns, citing monthly interest of roughly 12% to 17% (InvestmentNews) or 12% to 15% over three to seven years (another outlet). Prosecutors said he pitched the notes in webinars as backed by diversified assets, paying steady monthly returns from businesses including e-commerce, real estate, Broadway shows and cryptocurrency, and as a "hands-off passive investment" suited to retirement funds.
Balance sheets sent to investors concealed more than $90 million in debt and included inflated assets, and, in Ponzi-scheme fashion, interest was paid to some investors with other investors' money. In June 2024 investors were told distributions would be suspended because of "current market conditions and unforeseen financial challenges". The Justice Department says more than 400 investors lost approximately $63 million. The SEC has also brought an action alleging Norada raised tens of millions of dollars through unsecured, high-yield promissory notes.
Why it matters
High fixed monthly returns on unsecured notes, sold through webinars and marketed as safe and passive, are a classic warning sign. Unsecured means there is no specific asset investors can claim if payments stop, and a balance sheet supplied by the issuer is not independent proof of what the fund owns or owes.
Source
Hoodline, "Laguna Niguel CEO Sentenced in $63M Investor Fraud Case" (17 October 2026); U.S. Attorney’s Office, Central District of California, press release of 15 October 2026.
Red flags
- Promissory notes promising high fixed monthly interest (here roughly 12% to 17%) described as safe or 'passive'.
- Unsecured notes sold to retail investors through webinars and marketing.
- Balance sheets supplied by the issuer with no independent audit.
- Sudden suspension of payments blamed on 'market conditions'.
If you were targeted
- 1Check whether an investment and the person selling it are registered, using the SEC's EDGAR and Investor.gov tools and FINRA BrokerCheck.
- 2Ask for audited financial statements and independent legal advice before buying private notes.
- 3If you invested with Norada Capital Management, keep all records and watch the court and U.S. Attorney's Office for restitution information.
- 4Report suspected investment fraud to the SEC (sec.gov/tcr) and your state securities regulator.