A fugitive accused of a $35 million fraud that involved him falsely telling investors he was a billionaire, a HarvardMBA, and a special forces veteran who was wounded twice in Iraq was asked by prosecutors to be jailed without bail.
The fugitive was caught by the FBI in a remote area near San DIEGO. He had a backpack with six one-ounce gold bars worth $12,000, U.S. currency worth $60,000, another $10,000 in Mexican pesos, and banking cards and checkbooks.
A driver's license with his photograph, a receipt for a pre-paid phone number, and a fake name were all found in the backpack of the man.
The contents of the backpack were one of the factors cited by the U.S. Attorney's Office for the Southern District of California. He is a flight risk and a danger to the community, according to prosecutors.
They noted that he failed to turn himself in to the FBI as he had agreed to do. He was about to be indicted on charges related to schemes involving penny stocks, shell companies, and cannabis businesses.
Cash and gold bars as detailed in court filing in US District court in San Diego in case of former fugitive Justin Costello.He became a fugitive instead.
The FBI was unsuccessful in trying to track down Costello by his cell phone numbers. Countersurveillance measures were taken to prevent the devices from being tracked.
According to the filing, the FBI was able to track Costello through location information received from the theft recovery service.
The FBI tracked the car to a remote area where they saw him walking around with his backpack.
He said he was surprised that agents found him because he turned his phone off.
He recently had a stroke and needed to recover, so he didn't surrender.
The filing said thatCostello claimed that he could have outrun the agents but for the stroke.
"Costello was likely referring to the very significant media coverage of both his criminal charges and subsequent flight from prosecution," prosecutors wrote in a footnote.
The gold in the backpack was part of a larger quantity of gold, worth $94,000, that he purchased in April using money he had stolen from a banking client, according to prosecutors.
Prosecutors said that since mid-September, Costello stopped using his personal bank account for personal expenses and instead was using multiple corporate accounts to cover his tracks online.
They said that the weight of the evidence against Costello in the pending case was strong.
He is accused of scamming thousands of investors and others out of millions of dollars by making false claims that his companies were going to buy other firms.
He is accused of using one of his companies to divert at least $3.6 million from three marijuana companies that were clients to benefit himself and other companies he owned.
According to prosecutors, Costello used about $42,000 of investors' money to pay for his wedding expenses. There was a cake and ice sculpture of the James Bond movie logo, as well as a belly dancing performance by his bride.
According to prosecutors, Costello tricked investors into thinking he was a billionaire, an Ivy League grad and an Iraq veteran. The claims weren't true.
Prosecutors said in their court filing that he lied about the support of the Seattle business community. Business leaders were not identified by name.
In San Diego federal court on Tuesday, Costello is expected to appear. He is going to be brought to Washington state to face the charges.
The lawyer who is representing him in civil litigation by one of the marijuana companies he is accused of swindling did not respond to a request for comment.
The SEC has a civil lawsuit against Costello. On the same day the charges against him were made public, the agency filed it. The criminal indictment against Costello is tracked by the SEC.
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