Connecticut Man Sentenced for Running $1.4M Ponzi Scheme

HARTFORD, Conn. (AP) -

A Connecticut man who admitted to cheating investors out of more than $1.4 million, and using the money for personal expenses including international trips, has been sentenced to nearly six years in prison.

Joseph Castellano, an accountant and tax preparer who also offered investment opportunities, was sentenced Wednesday in federal court in Hartford to five years and eight months behind bars and three years of probation.

The 59-year-old Castellano had pleaded guilty in September to mail fraud and money laundering and had been free on a $250,000 bond. Prosecutors said that prior to sentencing, he violated the terms of his supervised release by having contact with victims.

Starting in 2007, he falsely represented to victims that he had clients who were in need of capital to fund businesses or real estate projects, but were unable to secure funding from traditional sources.

Many of the victims described Castellano as a friend, federal prosecutors said, and some of them lost most of their retirement savings.

“He went into their homes, shared meals with them, attended their weddings, and built a tremendous level of trust with them,” prosecutors wrote in a sentencing memo. “He had prepared their taxes and served as a financial advisor for them for many years.”

Castellano promised investors an annual rate of return of 6 to 8 percent. In reality, prosecutors said, there were no actual investments or investment opportunities.

A defense attorney, William Dow III, wrote in a sentencing memo that his client defrauded people who trusted him. But he cast Castellano as a poor businessman whose bad practices led to a need for money to stay afloat, not a man who preyed on elderly, trusting investors.

“Joe is basically a blue-collar guy who committed a white-collar offense in a blue-collar way,” Dow wrote. “The numbers, unfortunately, are white collar numbers.”