Former Registered Rep Sentenced to 20 Years for $115.5 Million Ponzi Scheme

Christopher A. Parris, 42, formerly of Rochester, New York, and currently of Lawrenceville, Georgia, was sentenced this week to 20 years in federal prison for conspiracy to commit mail fraud related to a Ponzi scheme, as well as to wire fraud involving the fraudulent sale of N95 masks during the COVID-19 pandemic. Parris pleaded guilty to the charges in 2021.

According to the Department of Justice, Parris conspired with co-defendant Perry Santillo and others to obtain money through an investment fraud.

Between January 2012 and June 19, 2018, Parris and Santillo obtained at least $115.5 million from approximately 1,000 investors.

According to BrokerCheck, Parris was a previously registered representative with Nationwide Securities and NYLife Securities who was suspended indefinitely by the Financial Industry Regulatory Authority in 2015.

In 2007, Parris and Santillo formed a business known as Lucian Development in Rochester. Prior to July 2007, Lucian Development raised millions of dollars from investors in Rochester, and elsewhere, by soliciting investments for City Capital Corporation, a business operated by Ephren Taylor. In July 2007, Parris and Santillo were advised by Ephren Taylor that their investors’ money had been lost. In response, Parris and Santillo agreed to acquire the assets and debts of City Capital Corporation. The acquisition was financially ruinous, with the amount of the acquired debt far exceeding the value of the acquired assets. Taylor was later prosecuted and convicted of operating a Ponzi scheme.

Subsequently, Parris and Santillo chose not to disclose the truth to investors that their money, entrusted to Lucian Development for investment in City Capital Corporation, was gone. Instead, Parris and Santillo continued to solicit more money from new investors in an unsuccessful attempt to recoup the losses.

Over the years, a substantial portion of incoming new investor monies were depleted by making promised interest and other payments to earlier investors. Most of the rest of incoming investor money was used by Parris, Santillo and other co-conspirators to finance lavish lifestyles; to expand the scheme by purchasing investment advisor/brokerage businesses to obtain access to fresh investors; and to pay operating expenses – salaries for a sales force and administrative staff, office rents and related expenses, housing for employees, and interest on loans.

By the time the scheme collapsed in late-2017/early 2018, Parris and Santillo, doing business through an array of corporate entities, had returned approximately $44.8 million to investors as part of their scheme, but continued to owe investors $70.7 million.

Parris also pleaded guilty in a case originally charged in the U.S. District Court for the District of Columbia to defrauding the U.S. Department of Veterans’ Affairs, as well as at least eight other victim companies, in a scheme involving personal protection equipment.

“The fraud schemes at issue here, including the purported sales of personal protective equipment that the defendant could not actually provide, are particularly egregious,” said acting assistant attorney general Brian M. Boynton of the Justice Department’s Civil Division following Parris’ guilty plea. “The Department of Justice is committed to prosecuting anyone who would try to profit through this kind of conduct.”

Between February and April 10, 2020, Parris, as the owner and operator of Encore Health Group, a company based in Atlanta, that purported to broker medical equipment, offered to sell scarce personal protection equipment, including 3M-brand N95 respirator masks, to various medical supply companies and governmental entities.

Parris knowingly misrepresented his ability to obtain vast quantities of 3M N95 masks and other personal protection equipment.

For example, in March 2021, Parris offered to sell the VA 125 million 3M N95 masks at a cost of $6.45 per mask. In this process, Parris attempted to obtain an upfront payment of $3.075 million from the VA.

As part of his guilty plea, Parris admitted that he obtained upfront payments totaling $7.4 million from at least eight clients for 3M N95 masks that he knew he had no access to. Parris also admitted that the proceeds of the scheme totaled $6.22 million. In total, Parris sought orders of more than $65 million for the non-existent PPE equipment.

Santillo was previously convicted and sentenced to serve 18 years in prison.

Click here to visit The DI Wire directory page.