George Santos: former US deputy son of Brazilians is investigated for online betting fraud

Brazilian former U.S. Rep. George Santos appears in court in New York where he pleaded guilty in a corruption case on August 19, 2024.
AP Photo/Stefan Jeremiah
A prediction market reported former U.S. Rep. George Santos to federal prosecutors after he boasted he would attend President Donald Trump's State of the Union address and then bet against his own attendance, according to a person familiar with the investigation.
Kalshi, the online prediction marketplace, referred Santos to the Justice Department after detecting suspicious trades made by the former congressman before Trump's Feb. 24 speech, the person said. The source spoke to the Associated Press on condition of anonymity because he was not authorized to discuss the matter publicly.
Kalshi also reported the trades to the Commodity Futures Trading Commission (CFTC), a federal regulator that has pledged to crack down on insider trading in prediction markets.
The Justice Department and CFTC did not immediately respond to AP's queries. Santos also did not respond to text messages or phone calls.
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The referral was first reported by NPR. Santos told NPR he was not aware of the investigation and declined to say whether he had an account with Kalshi.
"I'm not saying yes, I'm not saying no," Santos told NPR.
The convicted former congressman had repeatedly discussed his intention to attend the State of the Union, which came just four months after he received clemency from Trump in a fraud case that led to his expulsion from the U.S. House of Representatives.
On the eve of Trump's speech, the Kalshi put Santos' chances of attendance at almost 75%.
Then, minutes after the speech began, Santos posted on X that he had been detained at the airport. Immediately, several social media users accused him of running another scheme.
"Santos talking to his accountant and telling him to open his Kalshi account and bet all his money on 'No,'" one user wrote, alongside a meme of Al Pacino counting money in the movie Scarface.
In March, Santos addressed the complaints on his podcast.
"I think people lost money," he said. "Some people made unexpected money. It just goes to show how fragile these markets are."
Santos, who was elected as a Republican after inventing a fake persona as a Wall Street trader, was sentenced to seven years in prison after pleading guilty to fraud and identity theft in 2024.
After serving just 84 days, his release was ordered by Trump, who called Santos a "rebel" but said he did not deserve a harsh sentence and should receive credit for voting with the Republicans.
Prediction markets, including Kalshi and its main rival Polymarket, have drawn scrutiny as their businesses expand - with some lawmakers urging the platforms to do more to guard against insider trading.
Both companies said they are reporting suspicious trades to federal regulators. Some investigations led to criminal charges. In April, a soldier involved in the military operation to capture Venezuelan President Nicolás Maduro was accused of using classified information to earn more than US$400,000 by predicting the date of his capture at Polymarket.
Also in April, the Senate passed a bipartisan resolution to prevent its own members from using prediction markets.

Source: G1