//
you're reading...
Politics, Congress, Investigation, Republicans, FBI, internet, health, Economy, Education, Wikipedia, local news, Press Release, Justice Department, Democrats, meta, Fraud, National News, Environment

PRESS RELEASE: Jorge Luis Castillo of New Jersey Man Pleads Guilty in $670 Million Fraud Scheme

Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Monday, November 21, 2011

New Jersey Man Pleads Guilty in $670 Million Fraud Scheme

WASHINGTON – A certified public accountant (CPA) and purported
outside auditor for Provident Capital Indemnity Ltd. (PCI) pleaded guilty today for his role in a $670 million fraud scheme involving victims throughout the United States and abroad.

The guilty plea was announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

“Mr. Castillo used his position as a CPA to give PCI an air of legitimacy that provided their clients the peace of mind to invest millions,” said U.S. Attorney MacBride. “Auditors stand as a gatekeeper to fraud, and we are aggressively pursuing those who abuse their position to facilitate the fraud rather than take steps to put a stop to it. I want to commend the outstanding work of the Virginia Securities and Financial Fraud Task Force for detecting and disrupting this massive, ongoing international fraud before the scheme victimized even more investors.”

“Mr. Castillo played an integral role in a multi-million dollar fraud scheme that harmed investors throughout the United States and abroad,” said Assistant Attorney General Breuer. “Trading on his qualification as a CPA, he created false documents that concealed the true nature of PCI’s operations. We are determined to continue holding accountable those who commit financial fraud, and prey upon unsuspecting investors.”

Jorge Luis Castillo, 56, a resident of New Jersey, pleaded guilty before U.S. District Judge John A. Gibney in the Eastern District of Virginia to conspiring to commit mail and wire fraud, which carries a maximum penalty of 20 years in prison. Castillo is scheduled to be sentenced on May 22, 2012.

According to a statement of facts filed with Castillo’s plea agreement, PCI was an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. PCI sold financial guarantee bonds to companies selling life settlements, or securities backed by life settlements, to investors. These bonds were marketed to PCI’s clients as a way to alleviate the risk of insured beneficiaries living beyond their life expectancy. The clients, in turn, typically explained to their investors that the financial guarantee bonds ensured that the investors would receive their expected return on investment irrespective of whether the insured on the underlying life settlement lived beyond his or her life expectancy.

Castillo admitted today that he conspired with Minor Vargas Calvo, 60, the president and majority owner of PCI, to prepare audited financial statements that falsely claimed that PCI had entered into reinsurance contracts with major reinsurance companies. These claims, which were supported by a letter from Castillo stating that he conducted an audit of PCI’s financial records, were used to assure PCI’s clients that the reinsurance companies were backstopping the majority of the risk that PCI had insured through its financial guarantee bonds.

Castillo admitted that he never performed an audit of PCI’s financial statements and that, in fact, he personally created the statements he claimed to be independently auditing. He also admitted that he and others at PCI knew that the company never actually entered into reinsurance contracts with any major companies. Castillo also admitted that he and other conspirators provided the false financial statements and fraudulent independent auditors’ report to Dun & Bradstreet (D&B), which D&B relied on in compiling its commercial reports on PCI and issuing its 5A rating of PCI’s financial strength.

From 2004 through 2010, PCI sold approximately $670 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany and Canada. PCI’s clients, in turn, sold investment offerings backed by PCI’s bonds to thousands of investors around the world. Purchasers of PCI’s bonds were allegedly required to make up-front payments of six to 11 percent of the underlying settlement as “premium” payments to PCI before the company would issue the bonds.

Court records state that Castillo received approximately $84,000 from his work as the purported outside auditor of PCI from 2004 through 2010.

Vargas, a citizen and resident of Costa Rica, and PCI were charged in a superseding indictment on Oct. 5, 2011, with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. Vargas was also charged with three counts of money laundering. Vargas was arrested on Jan. 19, 2011, at the John F. Kennedy International Airport in New York, and has been incarcerated pending trial, scheduled to be held on Feb. 13, 2012. An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted.

This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and FBI, with assistance from the Virginia State Corporation Commission, the Texas State Securities Board and the New Jersey Bureau of Securities. This case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg of the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr. of the Fraud Section in the Justice Department’s Criminal Division.

The U.S. Securities and Exchange Commission (SEC) conducted a parallel investigation and in January 2011 filed a parallel civil enforcement action against PCI, Vargas and Castillo. The department thanks the SEC for its assistance in this matter.

The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia specifically. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.

President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

About these ads

About FREDERICA CADE

The fellow that can only see a week ahead is always the popular fellow, for he is looking with the crowd. But the one that can see years ahead, he has a telescope but he can't make anybody believe that he has it. ~~~~Will Rogers __The woman who follows the crowd will usually go no further than the crowd. The woman who walks alone is likely to find herself in places no one has ever been before.~ Albert Einstein _________________________________________I'm a Citizen that takes Politics seriously. I Research and try to Blog or Post things you don't normally hear. Do we want Politics involving Smoke and Mirrors or the Truth? fredericacade@gmail.com_______________________________________________ ~"I never work better than when I am inspired by anger; for when I am angry, I can write, pray, and preach well, for then my whole temperament is quickened, my understandingsharpen​ed, and all mundane vexations and temptations depart.” ~Dr. Martin Luther King Jr. _________________________________________________________________________________________ ~"The bosom of America is open to receive not only the Opulent and respectable Stranger, but the oppressed and persecuted of all Nations and Religions; whom we shall welcome to a participation of all our rights and privileges, if by decency and propriety of conduct they appear to merit the enjoyment".~___________________________________ George Washington, Address to the Members of the Volunteer Association of Ireland, December 2, 1783

Discussion

3 thoughts on “PRESS RELEASE: Jorge Luis Castillo of New Jersey Man Pleads Guilty in $670 Million Fraud Scheme

  1. Woah this weblog is fantastic i love studying your posts. Keep up the great paintings! You recognize, many people are looking around for this info, you can aid them greatly.

    Posted by phi kappa tau | December 20, 2011, 9:45 am
  2. Wow Excellent blog!

    Posted by Unreleased Movies | December 15, 2011, 10:29 pm
  3. Thanks a lot for sharing this with all of us you actually understand what you’re talking about! Bookmarked. Kindly also seek advice from my website =). We may have a hyperlink exchange contract among us

    Posted by betting systems | December 8, 2011, 5:41 pm

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Frederica Cade’s Blog (Politics, News, Analysis, Investigation, Press Releases, Education, Economics, Internet, News Releases, Featured stories, Fraud, and History, U.S. Laws, Posted stories, Index of reports, meta,Home page)

Blog Stats #

  • 447,847 hits
November 2011
M T W T F S S
« Oct   Dec »
 123456
78910111213
14151617181920
21222324252627
282930  

Frederica Cade’s Archives

Enter your email address to follow this blog and receive notifications of new posts by email.

Recent Post

Frederica Cade’s Blog (Politics, News, Analysis, Investigation, Press Releases, Education, Economics, Internet, News Releases, Featured stories, Fraud, and History, U.S. Laws, Posted stories, Index of reports, meta,Home page)

Politics, local News, National News, Foreign news, Congress, President, Government, Economics, Analysis, Art, Health,Investigation, FBI, Justice Department, Fraud, Press Releases, Health Care, News Releases, Law, and History Tags

2012 Elections Affordable Care Act Alabama Albuquerque ALEC Alexandria American Legislative Exchange Council AMERICAN LEGISLATIVE EXCHANGE COUNCIL (ALEC) Analysis Arizona Atlanta Attorney General Eric Holder Bain Capital California charter schools Chicago Colorado Congress Connecticut Debates Democrats Deputy Attorney General James M. Cole District of Columbia Economics Economy Education Environ Environme Environmen Environment EPA FBI Federal Election Commission (FEC) Florida fraud FreedomWorks General Georgia Grover Norquist Hammond Health Health and Human Services (HHS) Secretary Kathleen Sebelius Health Care Heritage Foundation HHS Secretary Kathleen Sebelius History Idaho Illinois Indiana Internet Investigation Iowa IRS jobs Joe Biden Jr. Justice Department Kansas Kara Pally Keystone XL Knoxville Koch Koch Brothers Koch Industries Laws Lobbying local news Louisiana Maryland Massachusetts Matte Kibbe Memphis meta Michigan Minnesota Mississippi Missouri Mitt Romney Montana Nashville National News Nebraska New Jersey New Mexico News New York Nikki Haley North Carolina Ohio Oklahoma Oregon outsourcing Paul Ryan Pennsylvania Philadelphia Politics President President Obama Press Release Public Schools Puerto Rico record Republicans Rhode Island South Carolina South Dakota Tennessee Texas Top Story TransCanada United States Vincent Sheheen Virginia Voting Rights Act Voting Rights Act of 1965 WASHINGTON Washington D.C. West Virginia Wikipedia Wisconsin

Frederica Cade’s Blog (Politics, News, Analysis, Investigation, Press Releases, Education, Economics, Internet, News Releases, Featured stories, Fraud, and History, U.S. Laws, Posted stories, Index of reports, meta,Home page)

Frederica Cade’s Blog (Politics, News, Analysis, Investigation, Press Releases, Education, Economics, Internet, News Releases, Featured stories, Fraud, and History, U.S. Laws, Posted stories, Index of reports, meta,Home page)

Follow

Get every new post delivered to your Inbox.

Join 1,236 other followers