Prosecutors say a CPA in Wallingford, Ct., faces up to 30 years in federal prison after pleading guilty to fraud and money laundering in connection with an alleged Ponzi scheme, Hartford Business.com reported.
Joseph A. Castellano has entered a guilty plea in federal court to one count of mail fraud and one count of money laundering, the Connecticut U.S. Attorney’s office said. Castellano is free on $250,000 bond, pending his Dec. 22 sentencing before U.S. District Judge Robert N. Chatigny.
He was arrested and charged in April with fraud and money laundering offenses stemming from an investment scheme that defrauded more than 10 individuals of more than $1.5 million, prosecutors say.
Castellano used clients from his tax preparation business to offer financial services and investment opportunities, according to the investigation.
No actual investments were made, the indictment says, 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. Castellano also allegedly made false statements to certain victim-investors to explain various delays in the purported interest payments, prosecutors said.