FBI finds gold and money from fake runaway billionaire Justin Costello
On Tuesday, prosecutors asked a California federal judge to jail without bail a recent fugitive accused of a blatant $35 million fraud in which he falsely told investors he was a billionaire, had a Harvard MBA and was a veteran of the Special Forces, twice wounded in Iraq.
An FBI SWAT team caught fugitive Justin Costello in a remote area near San Diego on October 4th. He carried a backpack loaded with six ounce gold bars worth $12,000, $60,000 worth of US currency, $10,000 in Mexican pesos, and bank cards. cards and checkbooks, the prosecutor said in a statement.
Costello, 42, also had a receipt for a prepaid phone number in his backpack, as well as a driver’s license with his photo in the name “Christian Bolter,” the document said.
The U.S. Attorney’s Office for the Southern District of California cited the contents of the backpack and other factors in the document as it urged the judge to send Costello to jail pending trial. Prosecutors argued that he was “at serious risk of escaping and a danger to society”.
They noted that Costello did not turn himself in to the FBI’s San Diego office, as he agreed through his lawyer on September 29. He was told that he would face a new indictment in Washington state federal court on multiple charges involving penny stock schemes, shell companies and cannabis businesses.
Cash and gold bars, as detailed in a lawsuit in the U.S. District Court in San Diego in the case of former fugitive Justin Costello.
Source: US District Court.
Instead, he “became a fugitive,” prosecutors wrote.
“The FBI tried to track Costello through his known cell phone numbers, but was unsuccessful,” the prosecutor’s office wrote. “Costello is believed to have taken anti-surveillance measures to prevent tracking of devices registered to these numbers.”
Ultimately, the FBI “were able to track Costello using location information obtained from a carjacking service for the Alfa Romeo he was driving,” the document says.
The statement said a SWAT team tracked the vehicle to the remote area of El Cajon, California, where they saw it walking with a backpack.
When the agents arrested him, Costello “stated that he was surprised the agents found him because he turned off his phone.”
He also told agents that he did not give up, as agreed, “because he had recently suffered a stroke and was in need of recovery.”
“Costello said he could have overtaken the SWAT agents if not for the stroke,” the statement said. “Costello admitted he was charged in the indictment and urged agents to google him to read about the case,” he continued.
“Costello was likely referring to very extensive media coverage of both his criminal charges and subsequent flight from prosecution,” prosecutors wrote in a footnote that references a CNBC article about him published last week.
Prosecutors said the FBI learned shortly after that the gold in the backpack was part of a larger $94,000 worth of gold that Costello purchased in April “with money he stole from a bank customer.”
Investigators determined that since mid-September, the defendant stopped using his only known personal bank account for personal expenses, and instead used several corporate accounts in an apparent attempt to cover his tracks online, prosecutors said.
They added that the “evidence” against Costello in the pending case charging him with wire fraud and securities fraud is “strong and well documented.”
Costello, with ties to La Jolla, California and Las Vegas, is accused of defrauding thousands of investors and others out of millions of dollars by making false claims that companies he controls were planning to buy 10 other firms.
He is also accused of using one of the companies, Pacific Banking Corp., to divert at least $3.6 million from three marijuana companies that were clients for himself and other companies he owned.
Prosecutors said Costello used about $42,000 of money allegedly received from investors to pay expenses related to his wedding. The event featured a cake and ice sculpture featuring the iconic James Bond 007 film logo, as well as a belly dance performance by his bride.
Prosecutors said Costello allegedly deceived investors with his tall tales about being a billionaire, an Ivy League graduate and an Iraq veteran. They noted that none of the allegations were true.
He also “falsely claimed that two”[l]The “local titans” of the Seattle business community “supported” him,” prosecutors wrote in their court filing. They did not name these business leaders.
Costello is due to appear in federal court in San Diego on Tuesday. He is expected to be transferred to Washington State soon to appear in the US District Court for the Western District of Washington.
The lawyer who is representing him in a civil lawsuit against one of the marijuana companies he is accused of defrauding did not immediately respond to a request for comment.
Costello also faced a civil lawsuit filed by the SEC on the same day that the criminal charges against him were uncovered. This lawsuit largely tracks the claims in the criminal indictment.