Frank A. Castaldi Charged In Multi-Million Dollar Ponzi Scheme: Prospect Heights Businessman Nets 200 To 300 Investors In Scheme

Castaldi allegedly made false representations to investors about investing their principal in his various businesses, as well as the source of the funds that he used to make their interest payments. At least five years ago, Castaldi allegedly began falsely telling investors that he was placing their money with financial institutions with whom he had a special relationship and would guarantee their principal and high returns. Instead, Castaldi obtained loans and used certain investors' principal payments to make interest payments to other investors, without disclosing the true source of the interest payments, the charges allege. In 2008 alone, Castaldi allegedly renewed or issued promissory notes bearing a total face value of approximately $68 million to $69 million, in many instances representing the face value of investors' initial notes plus the investors' accumulated interest which had been rolled back into the notes.