A man accused of stealing $35 million from investors and making off with it was apprehended while attempting to go to Mexico with gold bars and $60,000.
Justin Costello, 42, was detained on October 4 in El Cajon, California, barely an hour from the Mexican border. He is accused of deceiving investors into thinking he was a millionaire, a Harvard graduate, and an Iraq War veteran.
Despite Costello’s agreement to turn himself in to the authorities two weeks ago via a lawyer, an FBI SWAT squad managed to apprehend him with six gold bars worth $12,000, $10,000 in Mexican pesos, and a number of checkbooks and banking cards, according to CNBC.
Prosecutors requested a federal court in California to keep Costello without bail on Tuesday in order to conclude his criminal career.
According to U.S. Attorney Nick Brown, Mr. Costello “supposedly concocted several bogus stories to induce victims to spend millions of dollars—money he subsequently utilized for his personal gain.”
Using Twitter, news announcements, securities filings, and claims of enormous wealth, Mr. Costello concocted a complicated scam involving shell companies, penny stocks, and financial services for marijuana enterprises.
“In actuality, the image was an illusion.”
A 25-count indictment in Washington State accused Costello, a resident of Las Vegas, of engaging in wire and securities fraud against marijuana companies, private investors, and the general public.
The indictment claims that Costollo was the owner of the Pacific Banking Corp, which offered services to marijuana firms throughout the nation.
By 2021, Costello reportedly stole $3.7 million by stealing money from companies for himself and his newly renamed firm, GRN Funds, beginning in 2019.
Costello bought two businesses that were trading for pennies using his allegedly illicit proceeds, renamed them, and then went about pretending to be other people to deceive investors into purchasing his stocks.
A Wall Street investor with 14 years of experience, Costello reportedly claimed to have a Harvard MBA, be a special operations veteran injured during two deployments in Iraq, be the owner of a private equity and hedge fund with $1 billion in assets under control, and be a Harvard MBA.
One affluent couple granted him immediate access to their $4 million trading account in exchange for $2 million in shares of the businesses Costello owned.
According to the prosecution, Costello defrauded 29 investors out of $6 million by using fictitious identities.
Then, according to Costello, 10 news releases showed that this firm was growing and going on to acquire other businesses in order to entice investors.
In all, about 7,500 investors lost a cumulative $25 million after investing in Costello’s stock.
At the same time, prosecutors said Costollo engaged in illegal pump-and-dump activities when he paid a co-conspirator to promote his penny stocks on Twitter with 90 posts a day.
According to the indictment, Costollo and his partner would urge their followers to buy up the stock, raising prices from a nickel to $2 a share.
Costollo allegedly made $576,466 through the scheme.
Prosecutors also noted that Costello used at least $42,000 of the stolen funds to pay for his wedding, which included Jame Bond-themed cake and ice sculpture.
Prosecutors said that after Costello was charged in September, he started making plans to leave the country.
Prosecutors stated: “The FBI sought to trace Costello using his known mobile phone numbers but were unable.” “It is thought that Costello used counter-surveillance techniques to avoid being followed on equipment linked to those numbers.”
Through the use of his Alfa Romeo, agents were able to locate Costello, where they discovered him strolling with a rucksack containing gold and cash.
Costello informed the agents that he was recuperating from a stroke and that, but for that, he would have been able to outrun them, according to the court document.
The agents revealed that Costello had a bigger gold stash worth $94,000 that included the gold they had discovered with him.
Costello may get a sentence of up to 40 years in jail and $5,250,000 in penalties, which is up to double the profit he stole from the victims.
Next Tuesday, he is scheduled to appear in federal court in San Diego.