Clicky

INN Blog

More Posts
 

N.J. Accountant Sentenced In $485M Life Insurance Scam

LARRY O'DELL, Associated Press

RICHMOND, Va. -- An accountant who faked an audit for a Costa Rican company as part of a $485 million life insurance scam and later testified against the fraud's mastermind was sentenced Friday to 4 1/2 years in federal prison.

Jorge Luis Castillo of Hackettstown, N.J., apologized for his role in the global scheme that that claimed thousands of victims, including many who lost their life savings.

"I regret from the bottom of my heart the consequences of this unscrupulous scheme of which I was a part," Castillo told U.S. District Judge John A. Gibney.

The judge, citing what he believed to be Castillo's genuine remorse and his cooperation in the government's case against Provident Capital Indemnity Ltd. president Minor Vargas Calvo, gave the accountant less than half the sentence called for in federal guidelines and credit for the nearly two years already served.

Castillo admitted cooking the books for Provident, which sold bonds guaranteeing funding for companies that buy life insurance policies from insured people at less than face value and collect the benefits when those people die. Vargas was sentenced in October to 60 years for leading the scam.

"Accountants and auditors are the gatekeepers of our financial system and are entrusted with the critical role of protecting the public from fraud," U.S. Attorney Neil H. MacBride said in a statement after the hearing. "Today's sentence will hopefully send a strong message to those in the accounting profession that they will be held responsible when they break that trust by facilitating or participating in fraud."

Before the sentence, Gibney said he was struck by the contrast between Castillo, whom he described as "a good person," and Vargas.

"Vargas is absolutely unrepentant," he said.

But the judge said he also had to consider the victims, who relied on the falsified financial statements when they invested in the life settlement contracts.

"This offense enabled PCI and Vargas to steal a lot of money," Gibney said. "This is not something that deserves just a slap on the wrist."

Defense attorney Patrick Hanes said his client was raised in poverty in Costa Rica, worked hard to get an education there and "never even had a traffic ticket" after moving to the United States.

"He's lost everything financially, his professional license he worked so hard to obtain," Hanes said. "So the consequences of this to Mr. Castillo are huge."

There are No Baby Steps in Sales.

Hanes also urged the judge to consider Castillo's testimony against Vargas, whose business dealings and ownership of two professional soccer teams made him "a very powerful man" in Costa Rica. "It shouldn't be underestimated that this took some courage," Hanes said.

Assistant U.S. Attorney Michael Dry acknowledged that coming up with an appropriate sentence was difficult because of Castillo's previously clean record, his cooperation with prosecutors and his eagerness to atone for his crime. But he said Castillo knew what he was doing was illegal, and he kept doing it until confronted by authorities.

"Everybody in the world probably has a side to themselves that they don't want anyone else to see," Gibney said. "I'm not going to sentence part of the man, but the whole man _ the good and the bad."

Castillo is the ninth and final defendant sentenced in Virginia in a pair of related cases involving the life settlement industry. Most pleaded guilty, but Vargas and two principals of Houston-based A&O went to trial and were convicted. Sentences ranged from three to 60 years.

The Provident and A&O cases were brought in Virginia because that's where some of the victims and transactions were located.

Copyright: (c) 2012 The Associated Press. All rights reserved.
Source: Associated Press
Wordcount: 594


USER COMMENTS:


  More Life Insurance News

More Life Insurance News >>
  Most Popular Life Insurance News

More Popular Life Insurance News >>
Hot Off the Wires  Hot off the Wires

More Hot News >>

insider icon Denotes premium content. Learn more about becoming an Insider here.
There are No Baby Steps in Sales.