Prosecutors on Tuesday asked a California federal judge to jail without bail a recent fugitive accused of blatant $ 35 million fraud involving him falsely telling investors that he was a billionaire, a Harvard MBA and a veteran of the US. special forces who was wounded twice in Iraq.
An FBI SWAT team captured the fugitive, Justin Costello, in a remote area near San Diego on Oct. 18 4. He was carrying a backpack loaded with six one-ounce gold bars worth $ 12,000 US currency. worth $ 60,000, $ 10,000 in Mexican pesos and bank cards and check books, prosecutors said in a court filing.
Costello, 42, also had a receipt for a prepaid phone number in his backpack, along with a driver’s license with his photographer under the name of “Christian Bolter,” the deposit revealed.
The United States Attorney’s Office for the Southern District of California cited the contents of the backpack and other factors in the filing as it urged a judge to send Costello back to jail pending trial. Prosecutors said it was “a serious risk of escape and a danger to the community”.
They noted that Costello did not give up at the San Diego FBI office as he had agreed through his attorney on September 29. He had been informed that he was facing a new indictment in the Washington state federal court over a series of charges related to schemes involving penny stocks, shell companies and cannabis businesses.
Cash and gold bars as detailed in the court filing with the United States District Court in San Diego in the case of former fugitive Justin Costello.
Source: United States District Court
Instead, he “became a fugitive,” prosecutors wrote.
“The FBI tried to trace Costello based on his known cell phone numbers, but without success,” the prosecutors wrote. “Costello is believed to have taken counter-surveillance measures to avoid being tracked on devices registered with those numbers.”
The FBI eventually “was able to 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 car to a remote area of El Cajon, California, where they saw it walking while wearing a backpack, the document reads.
When the agents arrested him, Costello “said he was surprised that the agents found him because he turned off the phone.”
He also told officers that he had not given up as agreed, “because he recently had a stroke and needed to recover.”
“Costello said he could have outrun SWAT officers without the stroke,” the filing said. “Costello admitted that he was the person accused in the indictment and encouraged agents at ‘Google’ to have him read about the case,” he continued.
“Costello was probably referring to the very significant media coverage of both his criminal charges and subsequent flight from prosecution,” prosecutors wrote in a footnote, which links to the CNBC article about him. last week.
Prosecutors said the FBI shortly after learning that the gold in the backpack was part of a larger amount of gold, valued at $ 94,000, that Costello bought in April “using money he had stolen from a bank customer. “.
Investigators determined that by mid-September the accused stopped using his only known personal bank account for personal spending, and instead was using multiple business accounts in the apparent effort to cover his tracks online, prosecutors said. .
“The weight of evidence” against Costello in the pending case – in which he is accused of computer fraud and securities fraud – “is strong and well documented,” they added.
Costello, who has ties to La Jolla, California, and Las Vegas, is accused of defrauding thousands of investors and others for millions of dollars by making false claims that his subsidiaries were planning to buy 10 more companies.
He is also accused of using one of the companies, Pacific Banking Corp., to hijack at least $ 3.6 million from three marijuana companies that were clients for the benefit of himself and other companies he owns.
Prosecutors said Costello used about $ 42,000 of money allegedly scammed by investors to pay for the costs associated with his marriage. The event featured a cake and ice sculpture with the iconic James Bond 007 movie logo, as well as a belly dancing performance by his bride.
Costello allegedly fooled investors with his stories of being a billionaire, an Ivy League graduate and an Iraq veteran, prosecutors said. They noted that none of the claims were true.
He also “falsely claimed that two ‘[l]the local titans of the Seattle business community were ‘supporting’ him, “prosecutors wrote in their court filing. They did not identify those business leaders by name.
Costello is expected to appear in San Diego federal court on Tuesday. He is expected to be transferred to Washington state soon to face indictment in the United States District Court for the Western District of Washington.
A lawyer representing him in a civil litigation by one of the marijuana companies he is accused of scamming did not immediately respond to a request for comment.
Costello also faces a civil lawsuit filed by the SEC on the same day the criminal charges against him were overturned. That lawsuit largely follows the claims in the criminal prosecution.