Officials say 59-year-old Joseph Castellano of Wallingford defrauded people of more than $1.4 million.
Castellano operated various entities out of offices in Wallinford including Casbo Investments, Wallingford Investors Limited Partnership, AIM Realty Investors, and Castellano & Co., LLC. Castellano owns Castellano & CO., LLC, as a certified public accountant. He prepared federal and state tax returns for individuals and local businesses. With his tax preparation business, Castellano had a base of clients where he offered financial services and investment opportunites in addition to preparing their taxes.
Investigators believe in approximately July of 2007, Castellano falsely represented to victim-investors that he had clients who needed capital to fund businesses or real estate development projects, but weren’t able to secure funding from financial institutions. Castellano told victim-investors that he would obtain a consistent rate of return between approximately six and eight percent annually on their money by taking their money and placing it with or loaning it to one or more of his other clients.
Through Casbo Investments, Castellano created, prepared and executed official-looking documents and investment contracts called “demand notes” that contained a promise to return the principal amount with interest at any time.
According to officials, there were no actual investments or investment opportunities. The money was not invested with or loaned to other clients of Castellano. Instead, Castellano used the funds for his own use and benefit, including for international travel. He allegedly also used some of the invested funds to make phony “interest” payments to other victim-investors.
During the scheme, Castellano made fake statements to victim-investors to explain various delays in their interest payments. Through the scheme, Castellano defrauded 18 victim-investors of a total of $1,447,151. Multiple victims lost most of their retirement savings.
Castellano was arrested on April 6, 2017. On September 16, 2016, he pleaded guilty to one count of mail fraud and one count of money laundering. Castellano had been released on a $250,000 bond, but was given to the custody of the U.S. Marshals Service at the conclusion of the sentencing proceeding. Castellano was sentenced to 68 months of federal imprisonment followed by three years of supervised release.