A Wallingford CPA has been indicted by a federal grand jury for allegedly running a Ponzi scheme.
Joseph A. Castellano, 58, of Wallingford, was arrested and charged with fraud and money laundering offenses stemming from an investment scheme that defrauded individuals of more than $1.5 million, the indictment said.
Catellano used clients from his tax preparation business to offer financial services and investment opportunities. The indictment alleges that, beginning in approximately July 2007, Catellano falsely represented to victim-investors that he had clients who were in need of capital to fund businesses or real estate development projects, but were unable to secure funding from traditional sources such as financial institutions.
The indictment said there were no actual investments or investment opportunities, and the money was not invested with or loaned to other clients of Castellano. He allegedly diverted the funds for his own use and benefit, including making payments to other victim-investors that were falsely represented to be “interest” payments. Castellano also made false statements to certain victim-investors to explain various delays in the purported interest payments.
Through this scheme, it is alleged that Castellano defrauded more than 10 victim-investors of more than $1.5 million. He was arrested Thursday and detained before being released on a $250,000 bond.
