Marco Santarelli, the former CEO of Norada Capital Management, was sentenced on October 15 to 33 months in federal prison for running a promissory note scheme that cost investors about $63 million. A judge also ordered him to pay $63,165,357 in restitution.
The U.S. Attorney’s Office for the Central District of California says more than 400 investors lost money in the fund, which sold notes to people who were told they would get steady monthly income.
Who is affected, and what should they check?
The people most directly affected are the more than 400 investors who bought Norada notes. Anyone who holds one of those notes, or who has received a letter about the case, should keep every statement, wire record and email from the fund in one folder, since restitution and any civil recovery depend on proving what was sent and when.
Anyone who has been pitched a similar note can use the case as a checklist. The pitch here combined an unsecured note, a fixed monthly rate of roughly 12 percent to 17 percent, and talk of a “hands-off” income stream for retirement money. Each of those details appears in the Justice Department’s description of the scheme.
Free retirement updates: Social Security and Medicare change every year, and nobody sends you a memo. The free Retirement Money Brief breaks down what changed and what to do.
We may earn a commission from links on this page.
What Santarelli sold, and what he told investors
Santarelli, 57, of Laguna Niguel, California, founded Norada Capital Management, a private equity fund, and sold unsecured promissory notes of $25,000 to $500,000 between June 2020 and June 2024. Prosecutors say he promised monthly interest of roughly 12 percent to 17 percent over three to seven years. Unsecured means no collateral stood behind the notes, so an investor’s claim rested on the fund’s own promise to pay.
In webinars he described the fund as a “hands-off passive investment” and said it was perfect for retirement funds, according to the Justice Department. Prosecutors say the interest was supposed to come from investments in five business categories, among them e-commerce, real estate, Broadway shows and cryptocurrency.
Balance sheets sent to note holders showed total assets between $143.3 million and $224 million. Prosecutors say those statements hid more than $90 million in debt and included inflated assets, and the fund never paid the returns it promised.
How did the money disappear?
Santarelli pleaded guilty in October 2025 to one count of wire fraud. The Justice Department says the fund invested in risky, unprofitable assets with little return and substantial debt, and paid interest to earlier investors with other investors’ money, which it described as “Ponzi-scheme fashion.”
When prosecutors first announced the charge on September 9, 2025, they put the loss at about $62.5 million and the number of investors at more than 500. The sentencing release uses the final figures: more than 400 investors and approximately $63 million. The maximum penalty for the charge was 20 years.
Federal agents have seized more than $5 million in proceeds tied to the scheme and are still looking for more assets, the Justice Department says. That sum is small next to the $63 million lost, so a restitution order of $63,165,357 does not mean investors will be repaid in full.
A civil case runs alongside the criminal one. The Securities and Exchange Commission filed a civil case, SEC v. Santarelli, in federal court in the Central District of California. In Litigation Release 26420 on November 19, 2025, the agency said Santarelli consented to a judgment that bars future violations, with any penalty and disgorgement to be set later.
The case number is 8:25-cv-02375. The SEC alleged that Santarelli’s payments to earlier investors came from later investors’ money and that hundreds of investors nationwide were involved. That matters to note holders because the SEC and the criminal prosecutors worked on the same conduct. The criminal sentence settles the prison term of 33 months and the restitution order, following the guilty plea he entered a year earlier. The civil case can add money penalties, though neither release says how much of the lost money could come back to note holders.
The Justice Department’s sentencing release says Homeland Security Investigations and the FBI investigated, with help from the SEC, and that Chief Assistant U.S. Attorney Jennifer L. Waier prosecuted the case before U.S. District Judge Fred W. Slaughter.
Where can a victim report a loss?
The SEC takes tips and complaints from the public through its online tip, complaint and referral form. The agency lists Ponzi schemes and high-yield investment programs among the things people can report, and a filing returns a confirmation and a submission number for the person’s records.
The Justice Department also points crime victims to a victim help and information page. The sentencing release does not list a dedicated victim hotline for this case, so those two pages are the starting points the government publishes for people who lost money, and a victim can use both at once.
Lost money in a high-yield note and unsure what comes next?
Restitution of $63,165,357 was ordered, but federal agents have seized only more than $5 million so far. Note holders who cannot show what was sent, when and to whom are left with little to hand a prosecutor, the SEC or a bank.
This story is a sentencing, and the kit comes in on the step after it, the recovery step. The Senior Fraud Defense & First-Hour Recovery Kit includes the first-hour recovery plan and a fraud evidence and report log for keeping every statement, wire and message in order. Its “Reporting, and What Each Report Does” part explains where each kind of report goes.
Get the Senior Fraud Defense Kit’s evidence and report log for an investment loss →
More Financial Reading
- 21 Ways to Stretch a $2,087 Social Security Check
- 15 Places to Find Your Share of the $4.25 Billion States Give Back
- 17 Medicare Money Moves Now That Part D Caps at $2,400
This article was produced with AI assistance and edited for accuracy against the sources linked above.
