Frank Castaldi, who ran a Chicago- area Ponzi scheme for 22 years that cost victims $31.6 million, was sentenced to 23 years in prison today in federal court.
For 22 years, Castaldi, 57, of suburban Prospect Heights preyed upon elderly Italian immigrants, U.S. District Judge John Darrah said today before handing down the sentence.
“This is an offense of huge magnitude,” the judge said after hearing from victims of the scheme in a packed courtroom. “It involved hundreds of victims. It involved millions of dollars.”
In an August 2009 plea agreement, Castaldi said he had raised more than $77 million from 473 groups and individuals. First charged in January of last year, he admitted to mail fraud and to trying to thwart a U.S. Internal Revenue Service probe.
The sentence imposed by Darrah was in excess of the federal sentencing guidelines-recommended range and the 12 1/2 year term suggested by prosecutors in a Sept. 8 court filing.
Castaldi, an accountant and businessman, received consecutive sentences of 20 years on the fraud count and 3 years on the obstruction count. He is required to report to prison on Nov. 15.
Castaldi’s attorney, Michael Monico of Chicago, couldn’t be reached for comment after the hearing. His client brought the scheme to the attention of U.S. law enforcement last year.
“The fraud scheme caused many of the victims to lose their homes, retirement income and life savings,” the office of Chicago U.S. Attorney Patrick Fitzgerald said in a statement after the sentencing.
They had been promised a 10 percent to 15 percent annual return on promissory notes he had sold them, Fitzgerald said.
One of those victims was Ugo Carlino of Franklin Park, a retired paper-factory worker who was one of the victims who addressed the judge.
Carlino had given Castaldi $180,000, much of which had been withdrawn from his pension, incurring a $22,000 tax penalty, the retiree said in an interview outside the court room. Net of that penalty, he got back only $17,000.
“He really did something that he could have stopped doing after the first year,” Carlino said. The former factory worker said he had been friends with Castaldi’s father for more than 40 years and had originally hired Frank Castaldi to handle his taxes.
“He captured my trust over the years,” Carlino said.
Assistant U.S. Attorney Christopher Veach asked Darrah for 90 days before imposing a restitution order, to allow investigators to continue to search for assets to return to the fraud victims. A spokesman for Fitzgerald, Randall Samborn, said virtually no money has been recovered thus far.
The case is U.S. v. Castaldi, 09cr59, Northern District of Illinois (Chicago).