Prosecutors on Tuesday asked a California federal judge to jail without bail a recent fugitive accused of a brazen $35 million fraud that involved him falsely telling investors he was a billionaire, a Harvard MBA and a special forces veteran who was wounded twice in Iraq.
An FBI SWAT team caught the fugitive, Justin Costello, in a distant area near San Diego on Oct. 4. He was carrying a backpack loaded with six one-ounce gold bars value $12,000, U.S. currency value $60,000, $10,000 in Mexican pesos and banking cards and checkbooks, prosecutors said in a court filing.
Costello, 42, also had a receipt for a prepaid phone number within the backpack, together with a driver’s license together with his photograph under the name “Christian Bolter,” the filing revealed.
The U.S. Attorney’s Office for the Southern District of California cited the backpack’s contents and other aspects within the filing because it urged a judge to remand Costello to jail pending trial. Prosecutors argued he’s “a serious flight risk and a danger to the community.”
They noted that Costello did not give up to the FBI’s San Diego office as he had agreed through his lawyer on Sept. 29. He had been informed that he was set to face a recent indictment in federal court in Washington state on a slew of charges related to schemes involving penny stocks, shell firms and cannabis businesses.
Money and gold bars as detailed in court filing in US District court in San Diego in case of former fugitive Justin Costello.
Source: US District Court
As an alternative, he “became a fugitive,” prosecutors wrote.
“The FBI tried to trace Costello by his known cellphone numbers but were unsuccessful,” prosecutors wrote. “It’s believed Costello took countersurveillance measures to stop being tracked on devices registered to those numbers.”
The FBI eventually “was capable of track Costello through location information received from the theft recovery service for the Alfa Romeo vehicle he was driving,” the filing revealed.
The SWAT team tracked that automotive to a distant area of El Cajon, California, where they saw him walking wearing the backpack, the filing said.
When agents arrested him, Costello “stated he was surprised agents had found him because he turned his phone off.”
He also told the agents he had not surrendered as agreed, “because he recently had a stroke and needed to get well.”
“Costello said that he could have outrun the SWAT agents but for the stroke,” the filing said. “Costello admitted that he was the person charged within the Indictment and encouraged agents to ‘Google’ him to read concerning the case,” it continued.
“Costello was likely referring to the very significant media coverage of each his criminal charges and subsequent flight from prosecution,” prosecutors wrote in a footnote, which links to CNBC’s article about him published last week.
Prosecutors said the FBI soon after learned that the gold within the backpack was part of a bigger quantity of gold, value $94,000, that Costello purchased in April “using money he had stolen from a banking client.”
Investigators have determined that since mid-September, the accused stopped using his only known personal checking account for private expenses, and as a substitute was using multiple corporate accounts in an apparent effort to cover his tracks online, prosecutors said.
“The burden of the evidence” against Costello within the pending case — where is he charged with wire fraud and securities fraud — “is powerful and heavily documented,” they added.
Costello, who has ties to La Jolla, California, and Las Vegas, is accused of scamming hundreds of investors and others out of thousands and thousands of dollars by making false claims that firms he controlled had plans to purchase 10 other firms.
He is also accused of using one in all the businesses, Pacific Banking Corp., to divert no less than $3.6 million from three marijuana firms that were clients to profit himself and other firms he owned.
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Prosecutors have said that Costello used about $42,000 of cash allegedly scammed from investors to pay for costs associated together with his wedding. The event featured a cake and ice sculpture with the enduring James Bond 007 movie logo, in addition to a belly-dancing performance by his bride.
Costello allegedly duped investors together with his tall tales of being a billionaire, an Ivy League grad and an Iraq veteran, prosecutors said. They noted that not one of the claims were true.
He also “falsely claimed that two ‘[l]ocal titans’ of the Seattle business community were ‘supporting’ him,” prosecutors wrote of their court filing. They didn’t discover those business leaders by name.
Costello is as a consequence of appear in San Diego federal court on Tuesday. He is anticipated to soon be transferred to Washington state to face the indictment in U.S. District Court for the Western District of Washington.
A lawyer who’s representing him in civil litigation by one in all the marijuana firms he’s accused of swindling didn’t immediately reply to a request for comment.
Costello also faces a civil lawsuit filed by the SEC on the identical day that criminal charges against him were unsealed. That suit largely tracks the claims within the criminal indictment.