Two men accused of defrauding nearly 100 investors of millions of dollars
Buffalo News (NY)
Aug. 18—Darin R. Pastor lived a lavish lifestyle.
He purchased a $1.5 million house for himself and his wife in Clarence, where he lived from 2015 to 2019, and bought another home for $738,000 in Florida for a relative.
Pastor allegedly spent $294,000 on jewelry, $95,000 on furniture for a rented home in California and $57,000 on clothing at a high-end men's clothing store in Amherst.
He and a partner, Halford W. Johnson, did all of that and more using other people's money under false pretenses, according to a grand jury indictment.
Their audacious lies, according to prosecutors, stretched around the world, from a purported deal to buy livestock from companies in Kenya and Somalia to sell to companies in Oman, to fraudulent gold deals with companies in Hong Kong and Australia.
A gas-to-liquid-fuel plant peddled to investors with annual $1 billion revenue projections was lifted entirely from a PowerPoint presentation an Arkansas business group pitched to them. Prosecutors said Pastor and Johnson's intentions were as false as the Wikipedia page Johnson created to entice investors with misleading information, including a false representation of Pastor's net worth.
On Wednesday, Pastor, 51, now living in Morristown, and Johnson, 59, of Brockport, were indicted by a grand jury on charges of conspiracy to commit wire fraud and securities fraud. The charges carry a maximum penalty of 25 years in prison.
Pastor, whose family for decades owned the Pepsi-Cola Buffalo Bottling Corp and for a time operated a minor-league hockey team in Buffalo, was also charged with engaging in monetary transactions with criminally derived property, and conspiracy to defraud the United States.
The scheme defrauded 95 investors, with individual losses as high as $3.5 million.
The fraud began in September 2013, according to Assistant U.S. Attorney Paul E. Bonanno. That's when Pastor obtained ownership of Creative App Solutions, a publicly traded company. He promptly changed the name to Capstone Financial Group.
From then through March 2017, 95 investors bought Capstone stock for approximately $19 million. However, Pastor and Johnson lied to investors by claiming Pastor had substantial wealth when he actually was millions in debt, and that Capstone held lucrative investments that would generate huge profits for them.
Beginning in April 2017, Pastor and Johnson told investors that they would buy back their shares of Capstone stock and the company would pay them at least four times the amount the investors had paid. They said they were able to make the hefty buyback payments because Capstone was flush with $217 million in cash as the result of a contract it had entered into with the country of Somalia.
Ninety-four investors accepted the stock buyback offer, but none had received any money by the Dec. 31, 2017, deadline set by Capstone.
Partial payments were made from February to April 2018, but none of the investors ever received the full amounts promised them.
The indictment was the result of an investigation by the FBI. Pastor and Johnson were arraigned by U.S. Magistrate Judge Michael J. Roemer and released on bail.
In August 2018, in an unrelated incident, Pastor was accused by a woman of sexual assault.
The victim said he lifted her shirt beyond her shoulder on a small aircraft in flight after appearing intoxicated. The incident was witnessed by a flight attendant, who reprimanded him, according to a criminal complaint filed in September 2018 in U.S. District Court.
The victim said that after her boyfriend went to the restroom, he then began touching her multiple times and exhorting her to leave her boyfriend for him.
After Pastor suddenly expressed remorse, the flight attendant moved him to the back of the plane and notified the captain of what happened. When the plane landed, the complaint said, Pastor was removed by police officers.
He was eventually placed on probation. Among the leniency letters attesting to Pastor's character and good deeds was one from Johnson.
(c)2022 The Buffalo News (Buffalo, N.Y.)
Visit The Buffalo News (Buffalo, N.Y.) at www.buffalonews.com