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Fugitive Justin Costello Denied Bail In Stock Cannabis Fraud Case


FBI poster for Justin Costello

FBI

Butcher wrote that the evidence itself is the least important factor in his decision to keep Costello in prison.

But, he added, “when caught up with the important [prison] penalty to which the defendant is liable if found guilty, the Court finds that the defendant has serious reasons for fleeing.”

Costello’s attorney, Cindy Muro, did not respond to messages seeking comment.

Costello, who has ties to Washington, Las Vegas and California, is due in court in San Diego later Tuesday for another hearing related to his planned transfer to Washington state for trial.

He is accused in the indictment of defrauding thousands of investors and others in complicated schemes involving penny stocks, shell companies and a banking company that did business with three unrelated cannabis companies. . The Securities and Exchange Commission sued Costello and another man, 44-year-old Radford, Va. resident David Ferraro, in a civil case alleging related fraudulent conduct.

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Among other allegations, Costello is accused of using social media sites to coordinate false claims about publicly traded stocks in order to manipulate their prices so he could profit from them.

As part of the alleged scams, Costello falsely claimed to be worth a billion dollars or more and to have served two tours in Iraq as a member of special forces, where he was allegedly shot twice. He also claimed to have “handled money for wealthy people, including a Saudi sheikh”, and that he “had 14 years of experience on Wall Street”, according to the indictment.

“None of this is true,” said a press release from the U.S. Attorney’s Office for Washington.

Prosecutors said Costello agreed, through his then-attorney, to surrender in late September to face the indictment after being told it was to be filed. But he never showed up as agreed at the FBI office in San Diego and went on the run.

On October 4, an FBI SWAT team found Costello in a remote area near San Diego carrying a backpack containing tens of thousands of dollars in US and Mexican currency, six one-ounce gold bars, bank cards and checkbooks and a driver from Washington State. license in the name of “Christian Bolter”.

Cash and gold bullion, as shown in the filing in U.S. District Court in San Diego in the case of former fugitive Justin Costello.

Source: United States District Court

Prosecutors said the FBI was able to locate Costello by tracking him on his cellphone.

Costello pleaded not guilty to an arraignment in federal court in San Diego a week later. He then appeared before Butcher on October 18 for a detention hearing, where prosecutors asked the judge to keep him locked up.

Butcher in his order on Monday said prosecutors had “demonstrated by clear and compelling evidence that [Costello] is an economic danger to the community and that no condition or combination of conditions will reasonably ensure the safety of any other person and the community.”

The judge cited Costello’s alleged possession of “several documents matching” the driver’s license bearing his photo but in Bolter’s name when he was caught, as well as other material that Costello could use to evade prosecution again .

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