SAN DIEGO — The CEO of a San Diego financial firm was arrested Sunday on suspicion of fraud, prosecutors said.

Carlos Manuel da Silva Santos, 29, of Portugal, faces a wire fraud conspiracy charge related to a loan scam through his company, Kelly Thornton with the Office of the United States Attorney Southern District of California said in a news release Monday. He was taken into custody in Newark, New Jersey after arriving in the U.S. from abroad.

Santos, the CEO of Ethos Asset Management, Inc., required prospective borrowers to pay an upfront fee “in an amount equal to a certain percentage of the loan amount,” according to the complaint.

“However, upon receipt of the upfront fee, Santos and Ethos did not disburse the loan as agreed upon by the parties. Santos used the upfront fees to repay other prospective borrowers, issue commissions to his co-conspirators, and to pay for personal expenses,” the complaint read.

The complaint continued saying Santos allegedly “manipulated Ethos’ balance sheets and real financial account statements to artificially inflate Ethos’ net worth.”

In one instance from the complaint, Santos was said to have “induced at least one victim to pay an upfront fee in excess of $8 million by representing Ethos had $359,088,190.22 in a specific brokerage account, but records established that Ethos had no such account.”

The wire fraud conspiracy charge has a maximum penalty of 20 years in prison and a $250,000 fine.