Death of accused scam artist leaves investors looking for millions they lost

Nov. 21—A once-prominent Buffalo businessman who was the main defendant in a multimillion-dollar securities fraud case, accused of cheating nearly 100 investors, has died.

The death of Darin R. Pastor leaves his alleged victims wondering if they will ever recover a penny of the millions they say he stole from them.

Pastor, 52, who tried a decade ago to purchase a National Hockey League franchise, "died suddenly" in his New Jersey home on March 25, prosecutors recently disclosed in a document filed in Buffalo's federal court.

Pastor was indicted on five felony charges, including securities fraud, money laundering and wire fraud, in July 2022. The U.S. Attorney's Office in Buffalo accused him and an associate — Halford W. Johnson, 60, of Brockport — of using a variety of audacious schemes to scam 95 investors, including many victims from the Buffalo area.

Days after a federal prosecutor reported Pastor's death in a court document filed on Oct. 30, Johnson pleaded guilty to one felony conspiracy charge.

"In light of Darin Pastor's death and the plea taken by Mr. Johnson, we're looking at all our legal options," said attorney Joseph Makowski, who represents 16 of Pastor's alleged victims. "My clients are upset. Some had losses of six figures, some had losses in seven figures. Promises were made to them that were not kept."

The chances of recovering the lost millions look bleak, in light of Buffalo News interviews with attorneys for Pastor and Johnson.

Barbara Burns, spokeswoman for the U.S. Attorney's Office, declined to comment on Pastor's death and how it would affect efforts to recover stolen money. She noted that prosecutors filed a forfeiture claim seeking restitution from Johnson.

As part of the indictment, prosecutors also filed a forfeiture action seeking more than $13 million from Pastor.

But if prosecutors try to get money from Pastor's estate, they won't find anything, Pastor's defense attorney, James P. Harrington, told The News on Friday.

"There is no estate. Any assets he had have been used up, spent or invested in other projects that didn't work out," Harrington said. "He was working on one project that he was hoping would allow him to pay back everyone he owed money to, but he died before it could be completed."

No foul play was involved in Pastor's death, Harrington said, adding "it was a massive heart episode."

Johnson's attorney, Daniel J. Henry, said Johnson "has almost nothing in the way of assets" to repay fraud victims.

What happens in a case where a man who allegedly defrauded victims out of millions of dollars dies while charges are pending?

Government attorneys could continue to seek money for victims, said Daniel Charles Richman, a former federal prosecutor who now teaches at Columbia University Law School.

"While the government cannot pursue criminal forfeiture against a defendant who has died, it can still pursue civil forfeiture against the relevant property," Richman said.

Pastor and Johnson were indicted after a lengthy investigation by the FBI and the Internal Revenue Service criminal division. Agents charged that Pastor used money bilked from victims to fund a "lavish lifestyle."

Assistant U.S. Attorney Paul E. Bonanno said Pastor obtained ownership and control of a publicly traded company named Creative App Solutions Inc., whose stock was registered with the United States Securities and Exchange Commission. After becoming chief executive officer of Creative App, Pastor changed the company's name to Capstone Financial Group, and appointed Johnson as its chief financial officer.

Prosecutors accused the two men of buying 3.5 million shares of stock in Creative App for less than $2,000, and after changing the company name, fraudulently inflating the stock's value and selling it to investors for nearly $20 million.

The feds charged Pastor with illegally using investors' money in 2016 to buy a $1.5 million, six-bedroom home in the Spaulding Lake neighborhood of Clarence. Property records show that home was sold by Pastor in 2018.

Pastor used victims' money to pay for a destination wedding in the Caribbean, a Florida home for a relative, motor vehicles, pieces of jewelry worth more than $294,000 and other items, agents alleged.

Makowski said his clients have a lawsuit pending against Pastor in State Supreme Court.

"I thought I had the bulk of this case settled twice," Makowski said. "But both times, Capstone went dark on us."

Capstone "fraudulently represented to investors" that Pastor had a net worth of hundreds of millions of dollars, and that Capstone had huge and lucrative business deals cooking in Hong Kong, Australia and Somalia, prosecutors charged.

Individual investors in Capstone lost as much as $3.5 million, prosecutors said.

Prosecutors briefly mentioned the death of Pastor on Nov. 7, in a news release announcing that Johnson pleaded guilty to a felony charge of conspiracy to commit securities fraud. He faces a maximum sentence of five years when he is sentenced April 2 by District Judge Lawrence J. Vilardo.

In court papers filed in late October, prosecutor Bonanno said Pastor died "suddenly" on March 25 in a residence he owned in the town of Boonton, N.J., 30 miles outside New York City. Bonanno included Pastor's death certificate in a court document he filed under seal. Police in Boonton said the death was "a medical event."

Born and raised in the Buffalo area, Pastor was part of a prominent family that owned a prosperous soft drink business and the old Buffalo Bisons team in the American Hockey League.

In 2013, Pastor tried unsuccessfully to buy the Arizona Coyotes of the National Hockey League for $277.5 million.

In a 2015 interview with The News, an optimistic Pastor said he was moving Capstone's headquarters from Irvine, Calif., to Amherst. He said Capstone was looking to invest in promising companies in Western New York.

Pastor had his first run-in with law enforcement in September 2018, when federal agents charged him with crude and abusive behavior toward a female passenger during a flight on a small aircraft.

The flight crew called police, who arrested Pastor after the plane landed in Buffalo. He later pleaded guilty to misdemeanor assault on an aircraft and was placed on federal probation for two years. Pastor was required to pay a $5,000 fine and submit to a mental health evaluation and substance abuse treatment.

In a 2020 letter explaining his actions to a federal judge, Pastor apologized for his "horrendous behavior." Pastor said he did not recall what he did after consuming three alcoholic drinks on the plane. He pledged to stop drinking.

Letters sent to the same judge by two ex-wives portrayed Pastor as a devoted father to his three children, and a philanthropist who gave tens of thousands of dollars to charities, including a group that helped victims of sex-trafficking.

"He was a bright, creative guy who was liked by a lot of people," Harrington said. "He made sincere efforts to put together legitimate business deals. He always had the intent to make his investors whole ... but it didn't work out."

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