In February, four months after being released from federal prison, former Republican congressman George Santos took to social media to express his enthusiasm about attending President Trump’s upcoming State of the Union address.
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“I’m going to be there for the State of Union in the gallery, guys,” Santos said in a video he posted to X a day before the president’s remarks.
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At the time, traders on the prediction market site Kalshi were placing millions of dollars worth of bets on who would attend. Santos’ video confirming his presence sent odds soaring.
But he didn’t show up.
“Watching SOTU from an airport tv was not part of the plan! FML,” Santos wrote on X, using slang for a more coarse way of saying, “screw my life.”
He posted the message as Trump was speaking, making those same odds in the Kalshi market plummet.
What Santos didn’t say was that he had already placed bets on Kalshi that he was going to appear at the State of the Union address, according to three people with direct knowledge of his trades who were not authorized to speak publicly. They say Santos misled the public and turned a profit based on that deception in the tens of thousands of dollars.
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Kalshi detected Santos’ trades, froze his account and referred the case to the Commodity Futures Trading Commission and the Department of Justice,which both opened investigations into Santos, according to a person familiar with Kalshi’s investigation who was not authorized to speak publicly.
Neither the CFTC nor the Justice Department returned requests for comment. Kalshi declined to comment.
Reached by NPR, Santos said, “Well, that’s news to me,” when asked about the insider trading probe underway into his activity on Kalshi.
Santos said, “I’m not saying yes, I’m not saying no” when NPR asked if he had a Kalshi account.
He went on to say the co-founder of Kalshi, Luana Lopes Lara, is “a fellow Brazilian” whom he personally knows. He said he would call her to get to the bottom of whether an investigation had been launched.
Santos promised to update NPR on how the call went. He did not respond to NPR’s follow-up messages.
The person familiar with Kalshi’s investigation said Santos, the son of Brazilian immigrants, does not know Lara, a Brazilian-American.
Kalshi has reached out to Santos to interview him as part of the investigation, but he has dodged those requests, according to that same person.
A ‘manufactured’ political rise
Santos’ trading on his own movements follows one of the most dramatic downfalls in recent political history.
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The 37-year-old former Republican congressman from New York ran for office telling a series of lies and fabrications about his personal life. Those include that he graduated from Baruch College in the top 1% of his class. He also said that his mother was working in the South Tower of the World Trade Center during the Sept. 11 attacks. The stories about his academic performance and his mother turned out to be false.
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He said he was Jewish. He is not. And he claimed that his grandparents escaped the Holocaust. They did not.
“Virtually everything that he put out about himself when he was running for office was manufactured,” said Jonathan Entin, a law professor at Case Western Reserve University. “You had to wonder whether anything he ever said about himself had any basis in reality.”
Santos’ penchant for deception eventually caught up with him.
In January 2023, Santos was sworn in as a U.S. representative and by May of that year, he was hit with an indictment. Federal prosecutors charged him with 13 counts of wire fraud, money laundering and stealing money from political donors. A judge handed him a sentence of more than seven years in federal prison.
But he served only four months because Trump commuted his sentence last October.
“George Santos was somewhat of a ‘rogue,’ but there are many rogues throughout our Country that aren’t forced to serve seven years in prison,” the president wrote on TruthSocial at the time.
Prediction markets under scrutiny
The investigations into Santos’ trades come during a moment of intense scrutiny of prediction markets, such as Kalshi and Polymarket, which allow bettors to put money down on everything from what will be the most expensive art work sold at auction this year to the timing of the next military strike in the Middle East.
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Lawmakers in Washington have been particularly concerned about how people with insider information could manipulate the markets and defraud other bettors. In April, federal prosecutors criminally charged a U.S. Army Special Forces soldier accused of making more than $400,000 betting on the capture of Venezuelan leader Nicolás Maduro.
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Last week, a Google employee was charged by the Justice Department for making more than $1 million correctly betting on search trends based on confidential information from the tech company. Both traders were using Polymarket, which is based overseas in Panama.
Traders on the messaging forum Discord suspected Santos had been duping Kalshi traders.
During the State of the Union address in February, one user with the name Roastinator.exe wrote after losing money betting that Santos would be at Trump’s speech: “I want George Santos in Kalshi prison for 15 years!!!”
Another user with the handle Nate Meininger wrote: “that’s gotta be a new low if you get rugpulled by George Santos,” using finance lingo for when a prediction market suddenly collapses.
While Santos’ account has been frozen, his name is still popping up in the world of Kalshi.
Last month, traders bet nearly $90,000 on what words Santos would utter during an interview on Newsmax.
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He did say the word “rumor,” but avoided the word “corruption.”