A fugitive who made off with $35 million by allegedly scamming investors was caught trying to flee to Mexico with gold bullion and $60,000 in cash.
Justin Costello, 42 – who allegedly led investors to believe he was a billionaire, a Harvard graduate and a veteran of the Iraq War – was arrested Oct. 4 in El Cajon, California, just an hour from the Mexico border.
Although Costello agreed through a lawyer to turn himself in to police two weeks ago, an FBI SWAT team found him with six bars of gold worth $12,000, $10,000 in Mexican pesos and a quantity of bank cards and checkbooks arrested, reports CNBC.
On Tuesday, prosecutors ordered a California federal judge to keep Costello in prison without bail in a bid to end his criminal career.
‘Mister. Costello allegedly told many tall tales to convince victims to invest millions of dollars – money that he then used for his own gain,” US Attorney Nick Brown said.
“In a complex system involving shell companies, penny stocks, and financial services for marijuana companies, Mr. Costello used Twitter, press releases, securities filings, and claims of great wealth to paint a picture of fabulous financial success.
“In truth, this picture was a mirage.”
Justin Costello, 42, (above) was arrested Oct. 4 after being on the run after being charged with 25 counts of wire and securities fraud
An FBI SWAT team arrested him with six $12,000 worth of gold bars, $10,000 in Mexican pesos and a quantity 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 veteran 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 charging him with wire and securities fraud that preyed on marijuana businesses and private and public investors.
According to the indictment, Costollo operated Pacific Banking Corp, which provided services to marijuana businesses across the country.
As of 2019, Costello reportedly siphoned money from companies to help himself and his company, renamed GRN Funds, walking away with $3.7 million by 2021.
Using his allegedly ill-gotten gains, Costello bought two companies trading for pennies, rebranded them, and attracted multiple personas to get investors to buy his stock.
Costello allegedly claimed he was a Harvard MBA, a special ops soldier who was wounded in two sorties in Iraq, a Wall Street investor with 14 years’ experience, and the owner of a private equity and hedge fund with $1 billion in assets under management.
A wealthy couple handed over $2 million for shares in Costello-controlled companies and gave him direct access to their $4 million trading account.
Through his false identities, prosecutors said Costello duped 29 investors who lost $6 million.
The indictment notes that Costello used at least $42,000 from investors to fund his wedding to Katrina Rosseini (above) as part of a Jame Bond celebration
Pictured: Costello’s FBI wanted poster after he went on the run in September
Costello then allegedly created 10 press releases to indicate that this company is expanding and moving towards buying other companies to attract investors.
In all, about 7,500 investors lost a total of $25 million after investing in Costello’s stock.
At the same time, prosecutors said that Costollo was involved in illegal pump-and-dump activity when he paid a co-conspirator to advertise 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 reportedly earned $576,466 through the program.
Prosecutors also found that Costello used at least $42,000 of the stolen money to pay for his wedding, which included cake and Jame Bond-themed ice sculptures.
Costello was arrested in El Cajon, California, just an hour from the border. The fugitive said he could have escaped if he had not suffered a stroke prior to arrest
After his September arraignment, prosecutors claimed Costello had begun preparing to flee the country.
“The FBI attempted to track Costello using his known cell phone numbers but was unsuccessful,” prosecutors wrote. “It is believed that Costello has counter-surveillance measures in place to prevent devices registered to these numbers from being tracked.”
Agents were able to successfully track Costello through his Alfa Romeo car, where they walked him with a backpack full of money and gold.
According to the court filing, Costello told agents he was recovering from a stroke and that otherwise he could have run away from them.
Agents added that the gold found at Costello’s was part of a larger hoard he had, valued at $94,000.
Costello faces up to 40 years in prison along with a fine of $5,250,000 or up to double the profits he made from the victims.
He is scheduled to appear in federal court in San Diego next Tuesday.