The Federal Bureau of Investigation is searching for a former Bellevue resident and Las Vegas man for defrauding several businesses and thousands of investors of more than $30 million.
The U.S. Attorney's Office of the Western District of Washington said 42-year-old Justin Costello is facing a 25-count indictment, charging him with wire and securities fraud.
Costello allegedly stole money from three marijuana businesses in Washington, Colorado, California, Illinois, and Alaska through his banking company, Pacific Banking Corp, which he owned and operated. Those businesses lost about $3.7 million. He allegedly diverted that money from the businesses to benefit himself and his companies.
He is also accused of defrauding private investors, engaging in "several pump-and-dump schemes."
"Mr. Costello allegedly told many tall tales to convince victims to invest millions of dollars -- money he then used for his own benefit," said U.S. Attorney Nick Brown. "In a complex scheme involving shell companies, penny stocks, and financial services for marijuana businesses, Mr. Costello used Twitter, news releases, securities filings, and claims of great wealth to paint a picture of fabulous financial success. In truth, that picture was a mirage."
Officials said Costello purchased two companies that were trading for pennies on the over-the-counter market and recruited investors to which he made false statements about the size and success of his banking business.
He told investors that he had an MBA from Harvard and served in the military, doing two tours in Iraq and had been wounded twice, according to the Department of Justice. He also said he was a billionaire and had years of experience on Wall Street. Officials said none of that was true.
Costello not only used that lie with private investors, "in all, some 29 investors invested directly with Costello and lost $6 million because they relied on Costello's false representations."
Officials also said Costello lied about an acquisition of other companies causing the share price to increase after his entity GRN Funds, LLC purchased the outstanding shares of Discovery Gold Corp and changed the name to GRN Holding Corp.
According to the U.S. Attorney's Office of the Western District of Washington, 7,500 investors lost about $25 million in the purchase and selling of GRN Holding Corp. stock.
Authorities issued a federal arrest warrant for Costello on Wednesday.
They said he failed to self-surrender at the FBI in San Diego, California, on Thursday.
Costello might be traveling with his wife, Katrina Rosseini, who is not a fugitive.