King Perry Perry Santillo, celebrated the triumph
of his investment kingdom with a big party at the Hyde nightclub at the Bellagio in Las Vegas.
His coronation ceremony was where his friends and colleagues officially crowned him King Perry,
King of the Hyde. The nickname stemmed from a song he had written about him in 2013. As he entered
the club, his song blasted over the speakers. The newly crowned king had never been more prosperous.
The song made sure that everyone knew how filthy rich Perry had become.
The lyrics describe the king as someone who always rides with a $10,000 suit on
his back. They also mention how King Perry, also referred to as the Italian Stallion,
was a hedge fund giant who would give out champagne showers just for fun.
Perry hired HardKnox, a custom songwriting duo, to write the song titled: "King Perry,
The King of Hyde." He was also the one who threw the party and
planned the entire celebration to celebrate himself properly. And who could blame him?
On paper, Perry and his associates ran investment advisory offices in New York,
Pennsylvania, Nevada, California,
Maryland, Texas, Florida, Ohio, Indiana, and South Carolina. It was a small empire.
The empire was born out of an investment fund and a personal financial crisis many years before.
Background
Before he became the self-proclaimed king of a Las Vegas nightclub,
Perry was a guy from Rochester, New York, looking to make some easy cash. So, in 2007,
Perry and his friend, Christopher Parris, started an investment fund called Lucian Development.
The duo began like any other entrepreneur—by asking their family and friends to invest.
Their loved ones and others were generous. The fund accumulated around $10 million.
Perry and Parris invested the money in another fund called Capital City Corporation
and lost nearly every cent. It turns out Capital City was a Ponzi Scheme.
Perry had gone from an upstart entrepreneur with an 8-figure fund to a man in 8-figures-worth
of debt. The two rookie fund managers couldn't let their family and friends
suffer for their mistake, so they tried to buy their money back. How? By buying
the assets and liabilities of Capital City Management. Now, they owned the Ponzi Scheme.
But the plan backfired. When Perry examined the financial papers of Capital City,
he realized that the fund owed more liabilities than they had available assets,
meaning Capital was in the red, and so was Perry.
King and Conqueror All Perry had were the few assets in Capital
City's accounts. He figured that if he could take that money and find a way to multiply it,
he might be able to pay back his Lucian investors while also taking care of Capital City's debts.
His solution? Spend more money. They bought struggling investment funds from failing
companies or managers looking to retire. They bought investment advisories and told
their new clients to invest in bogus shell companies. It takes years, sometimes decades,
for an acquisition to pay off as an investment. So, Perry found a way to speed up the process.
As the new owner of these investment funds,
Perry used the company name and reputation to his advantage when recruiting new clients.
It wasn't long before Perry started enticing potential investors with high return rates
and fat dividend checks. Many believed Perry, handing him their retirement funds,
savings, and other financial assets.
Perry took their money without hesitation. But instead of investing it in these
magical miracle-grow-stocks, he kept the cash for himself.
Whatever money Perry didn't spend on stuff, he used to buy more investment companies.
He would search all over, and any time Perry found an advisory fund whose owner was retiring
or wasn't doing so well profit-wise, Perry pounced and hit them with an offer.
In all, they accepted the deal
15 times across 11 states. None of them checked into Perry's background, and, on paper at least,
the fund manager looked legitimate. Not to mention, Perry had a way with people.
He was confident, charismatic, and persuasive, the kind of person you want to be around,
the kind of person you might trust with your money.
And from 2007 to 2018, around 1,000 regular people trusted Perry. Of these 1,000 individuals,
many were old retirees, and some had deteriorating mental conditions. Nevertheless,
Perry convinced them to fork over the money they had been saving since they were young. Most people
gave King Perry 5-figure sums of money. But some gave him nearly everything they had.
Elderly One of
Perry's oldest victims was 80 when the budding hedge fund giant asked whether
or not he would be interested in investing in a highly lucrative fund, with unreal returns,
the kind you can't get with the S&P 500, the kind that would smoke your average 401k.
Perry told the 80-year-old man that his fund was invested in real estate,
the most stable and consistent economic industry in the minds of many people.
The elderly man agreed to give Perry $250,000. That 6-figure total was among
the highest amounts Perry coerced out of his victims. But there was a reason
the 80-year-old man was so easily talked into investing in Perry's scheme: he had dementia.
However, dementia cannot explain why Joe and Gail Malocheski invested $314,000
in one of Perry's "funds." The Malocheski's are a retired couple in their mid-70s. They reside in
the tiny town of Saylorsburg, Pennsylvania, with a population of about 1,000 people.
For years, their trusted financial advisor managed their money. But in 2016, their financial advisor
was bought out by Perry Santillo. His team of associates immediately dug into their new clients,
looking for anyone willing to transfer their money to something a bit more lucrative.
Perry looked for people like Gail and Joe, but they needed some convincing first.
And Perry was more than up to the task. Gail recalls thinking that she and Joe
would be in good hands after meeting Perry. The impression she got from Perry was that of
a confident, intelligent man who knew investing like the back of his hand.
Joe, before he retired, worked as a union electrician and later worked as a public
school music teacher. He wasn't rich, and neither was his wife. Nevertheless,
the Saylorsburg couple were savvy savers throughout their working
lives and wanted to make sure their precious hard-earned money was growing, and then some.
That extra cash was supposed to be dividend checks,
passionately promised to Gail and Joe as a monthly reward for taking a chance on Perry's investments.
The couple was excited to receive their checks, hoping to increase the value of
their retirement and live a more prosperous life. Perry promised he would make it happen.
But as the months went by, no check came in. Instead, in September 2018, an FBI investigator
arrived on their doorstep, knocked on the door, and asked if he could speak with them.
The investigators told Joe and Gail about Perry and how he wasn't exactly who he says he is.
They explained how Perry lied to them about nearly everything, including
his inclination for investing, which the king of Hyde did very little of.
Lastly, the investigators told the retirees the bad news:
their $314,000 was gone and would likely stay gone unless they were
fortunate enough to find it somewhere among the scraps left in the investigation's wake.
When the investigators left, Joe recalls wondering what he and Gail would do without
their money. The money was supposed to fund their elderly care, living expenses, and,
most importantly, the inheritance for their children and grandchildren. Now, it’s gone.
Investigators told Gail and Joe that Perry may have spent the money he took from them.
Which brings up the vital question: how did Perry spend his victims' money?
Lifestyle Perry wasn't upfront with clients
on where their money was going. However, he made sure everyone knew that the King was filthy rich.
Using the money he took from dementia-suffering 80-year-olds and small-town retirees,
Perry bought all sorts of things to give off the millionaire appearance:
exotic cars, multiple houses in different states, colorful designer clothes, especially
sports jackets and belts, and, of course, outrageous parties, like the one at the Bellagio.
While Perry shopped for jackets and bought his friends champagne,
possibly spraying it on them instead of drinking it, the SEC was looking
into the financial anomaly that was Perry's conglomerate of investment advisory firms.
Given the sheer size of Perry's operation, it's a wonder they didn't notice him sooner.
Investigation The SEC launched an investigation
into Perry. After they uncovered signs of a criminal Ponzi Scheme, they notified the FBI,
turning part of the investigation over to them. After interviewing various victims,
like Gail and Joe, the investigators realized that some of Perry's clients
weren't getting their returns in the mail, a sign that Perry's scheme was collapsing.
Investigators changed their focus to Perry and business dealings.
Many different bureaus like the IRS participated in unraveling Perry's
scheme, and once they found enough evidence, the FBI made the arrest.
Judgment In 2019, Perry pleaded guilty to
several counts of financial criminal charges. However, the primary charge was fraud. And in
2022, the courts found him guilty and sentenced Perry to 17-and-a-half years in federal prison.
The judge presiding over Perry's case
also ordered the former king of Hyde to return $102 million to his victims,
a debt Perry may never be able to repay. He doesn't have the money, and neither do the feds.
Numbers-wise, Perry himself took around $13 million, which is still missing. His associates,
including Christopher Parris, took millions more, also still missing.
Aftermath Of the $100 million Perry stole,
only $45 million could be accounted for. The remaining $71 million is gone,
meaning many victims may never receive their retirement funds. The money could be spent,
tucked away under a mattress, hidden in an overseas account, or simply missing.
Perry's victims will search for their money for the foreseeable future. Sadly,
the king probably spent it a long time ago on non-refundable items like nightclub
drinks and sports cars. Maybe they'll get their lifetime of savings back one day.
If they could go back in time, they'd probably go back to the day they met King Perry.
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