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A fugitive who made off with $35 million by allegedly defrauding investors was caught trying to flee to Mexico with gold bars and $60,000 in cash.
Justin Costello, 42 – who allegedly misled investors into believing he was a billionaire, a Harvard graduate and a vet in the Iraq War – was arrested Oct. 4 in El Cajon, California, just an hour’s drive from the Mexican border.
Although Costello agreed to surrender himself to the police through a lawyer two weeks ago, an FBI SWAT team captured him with six gold bars worth $12,000, $10,000 in Mexican pesos, and a slew of bank cards and checkbooks. . CNBC reports.
On Tuesday, prosecutors asked a federal judge in California to keep Costello in jail without bail to end his criminal career.
‘Mr. Costello reportedly told many tall tales to convince victims to invest millions of dollars — money he then used for his own benefit,” said US attorney Nick Brown.
In a complex plan involving shell companies, penny stocks and financial services for marijuana companies, Mr. Costello Twitter, press releases, securities deposits and claims of great wealth to paint a picture of fantastic financial success.
“In reality, that photo was a mirage.”
Justin Costello, 42, (above) was arrested Oct. 4 after going on the run after being charged with 25 counts of wire transfer and securities fraud
An FBI SWAT team captured him with six gold bars worth $12,000, $10,000 in Mexican pesos, and a slew of bank cards and checkbooks
Prosecutors allege Costello tricked companies and investors into believing he was a billionaire, a Harvard graduate and an injured Iraq War vet in order to get them to invest in his companies. Costello’s more than 7,000 alleged victims lost a total of $35 million
Costello, of Las Vegas, faced a 25-count indictment in Washington state, alleging wire and securities fraud that victimized marijuana companies, as well as private and public investors.
According to the indictment, Costollo operated Pacific Banking Corp, which provided services to marijuana companies across the country.
As of 2019, Costello is said to have funneled money from companies to benefit himself and his company, renamed GRN Funds, earning $3.7 million in 2021.
Using his alleged ill-gotten gains, Costello bought two companies that traded for pennies, renamed them, and went around attracting different personas to trick investors into buying his stock.
Costello reportedly claimed to be a Harvard MBA, a Special Ops soldier injured on two tours in Iraq, a Wall Street investor with 14 years of experience, and the owner of a $1 billion private equity and hedge fund of assets under management.
A wealthy couple handed over $2 million for shares of the companies Costello controlled, and gave him direct access to their $4 million trading account.
Due to his false identities, prosecutors said Costello duped 29 investors, who lost $6 million.
The indictment says Costello used at least $42,000 from investors to fund his marriage to Katrina Rosseini (above) at a Jame Bond themed party.
Pictured: Costello’s FBI wanted poster after he fled in September
Costello would then have released 10 press releases indicating that this company was expanding and buying other companies to lure 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 activity when he paid a co-conspirator to promote his penny stock on Twitter with 90 posts a day.
According to the indictment, Costollo and his partner would urge their followers to buy up the stock, which would push prices up a penny to $2 a share.
Costollo is said to have earned $576,466 through the scheme.
Prosecutors also noted that Costello used at least $42,000 of the stolen money to pay for his wedding, which included a Jame Bond-themed cake and ice sculpture.
Costello was seized in El Cajon, California, just an hour’s drive from the border. The fugitive said he could have escaped had he not suffered a stroke prior to the arrest
After his indictment in September, prosecutors alleged that Costello had begun preparing to flee the country.
“The FBI tried to trace Costello using his known cell phone numbers, but were unsuccessful,” the prosecutors wrote. “It is believed Costello has taken counter-surveillance measures to prevent it from being tracked on devices registered to those numbers.”
Agents were able to successfully track Costello through his Alfa Romeo car, where they found him with the backpack full of cash and gold.
According to the court file, Costello told officers he was recovering from a stroke and that he could have avoided them otherwise.
The agents added that the gold found at Costello was part of a larger treasure he had worth $94,000.
Costello faces up to 40 years in prison, along with $5,250,000 in fines, or up to twice the profits he made from the victims.
He is due to appear in federal court in San Diego next Tuesday.