The Department of Justice has sentenced a New Jersey CPA for his role in a fraud case involving PCI, Provident Capital Indemnity Ltd, and hundreds of millions of dollars. The Financial Fraud Enforcement Task Force was set up by President Obama in 2009 to curb and pursue financial crimes. The department, led by Attorney General Eric Holder, attempts to ensure those who exploit others in the form of fraud cases, pyramid schemes, predatory lending, and the like are brought to justice and that victims receive appropriate compensation for their hardship. The Task Force works in conjunction with a plethora of federal agencies, such as the Department of Justice, as well as local and state governments to track crime and prosecute perpetrators.
The Department of Justice issued a press release Friday announcing the sentencing of Jorge Luis Castillo, a 57 year old New Jersey CPA, for his involvement in a $670 billion fraud scheme which stole money from people both in the US and abroad.
Castillo plead guilty to the charge of conspiring to commit mail and wire fraud in November of last year. US Attorney Neil McBride, who was serving on the Attorney General’s Advisory Committee at the time, said of the case:
“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. 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.”
PCI, an insurance company that sold financial guarantee bonds to other companies selling life settlement and which assured their investors that the sale of these bonds guaranteed returns on investments made, engendered the scheme and conspired with Castillo to back up their actions via audits. The scheme targeted a mostly elderly client base that relied on these investments for their wellbeing after retirement.
As an independent CPA, Castillo was supposed to audit financial statements made by PCI. He admitted to conspiring with PCI President Minor Vargas Calvo to prepare false financial statements that reassured investors other reinsurance companies were backstopping the risk PCI had insured via the financial guarantee bonds. Castillo also admitted to personally creating the reports, despite never having actually audited a single PCI financial statement.
Castillo has been sentenced to 54 months in prison, followed by three years of supervised release and a forfeiture of over $43 million.
On Friday, McBride stressed that he hoped the sentencing of Castillo, as well as the 60 year sentence of Calvo, would be a warning to others scheming to prey on unsuspecting investors.