Santos Pleads Not Guilty to Fraud, Defies Calls to Resign

Patricia Hurtado, Gregory Korte, Erik Larson and Chris Dolmetsch
·7 min read
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(Bloomberg) -- Representative George Santos was released on a $500,000 bond after being arrested on fraud and money-laundering charges, as the embattled Republican from New York comes under increasing pressure to resign — and snubbed those demands in defiant remarks outside court after his arraignment.

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The 34-year-old lawmaker appeared before a judge on Wednesday afternoon in federal court in Central Islip, New York. Wearing khaki pants, a white dress shirt and a navy blazer, he walked into the packed courtroom without handcuffs, escorted by two deputy US Marshals, and pleaded not guilty. His lawyer told the court Santos intended to carry on with his political career.

Read the indictment here

“My client is running for re-election,” attorney Joseph Murray told US Magistrate Judge Anne Shields. “He wants to have the ability to campaign and the freedom to engage in election activities.” Shields allowed restricted travel.

The charges come at a precarious time for House Republicans, whose 222-to-213-seat edge in the chamber means they can’t have more than four GOP defections to pass most bills. House Speaker Kevin McCarthy said Wednesday that he wouldn’t support the freshman congressman’s re-election, though he stopped short of calling for his resignation. Santos has been seen as a loyal vote for the speaker.

“Santos has a lot going on,” McCarthy said. “I think he has other things to focus on in his life than running for office.”

The 13-count indictment, returned by a grand jury on Tuesday and unsealed on Wednesday, also includes theft of public funds and making false statements to the House. It follows a five-month investigation that began shortly after Santos’s election in November. The charges shed light on some of the mysteries surrounding the representative, who gained office on the strength of a resume of Wall Street accomplishments that turned out to be almost entirely made up.

Audacious Scheme

Breon Peace, US attorney for the Eastern District of New York, described an audacious scheme.

Santos “used political contributions to line his pockets, unlawfully applied for unemployment benefits that should have gone to New Yorkers who had lost their jobs due to the pandemic, and lied to the House of Representatives,” Peace said in a statement.

Read More: Santos Scammed $25,000 in Covid Jobless Perks, Prosecutors Say

Prosecutors allege that Santos took part in two criminal enterprises.

They claim he solicited funds from donors for his campaign and used them instead for personal expenses including designer clothing, deploying a shell company that effectively operated as an illegal super-PAC. He also committed unemployment insurance fraud, illicitly receiving $24,744 in benefits in 2020 and 2021, according to the US. Along the way, the government contends, Santos misled the House and the public about his finances in connection with his congressional campaigns.

Santos faces as many as 20 years in prison if convicted of the most serious charges of money laundering and wire fraud, Peace’s office said. Under federal sentencing guidelines, his term would probably be shorter.

Santos’s congressional spokeswoman, Naysa Woomer, referred questions to Murray, who didn’t return calls seeking comment on the indictment.

Passports Taken

After the hearing, which lasted about 15 minutes, Murray told the press he had important information for prosecutors.

“We want to talk to the government and share with them what we’ve learned,” he said, without specifying. “We have information that we think they’d be interested to see.”

As part of his bond agreement, Santos must give up his passports. Assistant US Attorney Ryan Harris said Santos can’t contact certain “individuals,” perhaps because they may be witnesses against him.

The bond arrangement calls for three guarantors. Speaking to reporters outside court, Santos said he wouldn’t reveal who is backing his bond because the press would harass them.

‘Amicable’ Arrest

“This has been an experience for a book, or something like that,” he said. He said he would comply with the legal process but prevail over the indictment.

“I’m going to fight my battle” and “clear my name,” he said. As for how his constituents might feel about voting for him now, he said, “I trust them to decide.” He said he was returning to Washington to participate in a border bill vote.

Santos, who surrendered to the Federal Bureau of Investigation, was asked how the arrest went.

“It was very amicable,” he said.

His next appearance was set for June 30 before US District Judge Joanna Seybert, a Bill Clinton appointee. Criminal cases can play out over years, and any trial may not take place until after the 2024 election.

Speed of Case

But former federal prosecutor Jennifer Rodgers said the case was “fairly straightforward” and would probably move quickly, as criminal cases go. She said Santos put a target on his back by lying so brazenly on his resume. Once the falsehoods became public, there was no way the government would ignore him, she said.

“I don’t think they would have uncovered that if it weren’t for all of his outrageous lying that prompted journalists to look into it,” Rodgers said.

Richard Serafini, a criminal defense lawyer who was previously a Justice Department attorney, said it wasn’t surprising for a public official to be investigated if they “carry around a neon sign that says: I’m a liar.”

Serafini said the involvement of the Public Integrity Section of the Justice Department’s Criminal Division suggested the case would be even stronger than most.

‘Compelling Evidence’

“The Public Integrity Section is very careful in terms of indicting a public official, because that person has been in their position by the voters,” he said. “Only in very important circumstances — and with compelling evidence — will the government bring a case against a sitting public official.”

Santos must step down, Nassau County Executive Bruce Blakeman said in a text message.

“He is a stain on Congress and he’s doing a disservice to the residents of his district,” the Republican said.

Santos’s district, which leans Democratic, includes part of Queens in New York City and much of Nassau County.

Ed Cox, chairman of the New York Republican State Committee, said the party in Nassau “has made it absolutely clear” that Santos should resign. Cox said he had “complete confidence” in the county party to “find a viable contender to run in his district,” given its performance in recent elections.

In a general question-and-answer session, President Joe Biden told reporters any remarks he made on the case would raise questions of political interference.

“I’m not commenting on Santos,” the Democrat said.

Tricky Calculus

Santos could be expelled by a two-thirds vote of the House, but as of Tuesday an expulsion resolution had just 37 co-sponsors, all Democrats. If he is forced out, his seat would be filled by a special election within three months on a date to be set by New York Governor Kathy Hochul.

Still, there is little chance of getting such a vote in a chamber controlled by GOP leaders trying to protect a razor-thin majority. It was Santos who on April 26 dramatically cast the final, deciding vote to pass a Republican bill addressing the debt ceiling, after a handful of GOP defections.

“There was a time Republicans would have taken such action,” said Blake Chisam, a former staff director and chief counsel for the House Ethics Committee, referring to demands that Santos resign. “He would have already been gone. Now it’s more about the whip count.”

Santos’s improbable rags-to-riches story rang alarms at the North Shore Leader, a local weekly newspaper that questioned an “inexplicable rise” in his net worth. When he ran for office in 2020, Santos disclosed assets of zero and an income of $55,000. Two years later, he claimed to be worth as much as $11.2 million, with a salary of $750,000.

It wasn’t until after he was elected that the New York Times dismantled his fabricated life story. He didn’t work at Goldman Sachs or Citigroup, as he claimed, the Times reported. He never graduated from Baruch College and never played on its championship volleyball team. And he wasn’t Jewish but rather, as he later claimed, merely “Jew-ish.”

The case is US v. Santos, 23-cr-197, US District Court, Eastern District of New York (Long Island).

--With assistance from Billy House, Laura Nahmias, Bob Van Voris, David Voreacos and Emily Wilkins.

(Adds McCarthy’s remarks in first section, Santos’s in fourth, expert analysis by Rodgers in fifth and Biden’s comment in sixth.)

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