Lincoln County man accused of defrauding investors of more than $850K
Published 3:50 pm Monday, December 18, 2023
A Lincoln County man has been accused of defrauding potential investors of more than $850,000.
David T. Castillo, of 429 Jackson-Liberty Drive, has been ordered to “cease and desist” acting as an investment advisor, by the Mississippi Secretary of State’s (SOS) Office. Castillo is accused of acting as an investment advisor though not registered legally to do so.
“Castillo made misrepresentations to investors by claiming he was using investor funds to invest in the securities market when in fact he knew he was paying back other investors or spending the investment funds for personal use,” the order reads.
Castillo was ordered to immediately cease and desist from offering investment advice and obtaining funds from any clients, by any means. He was also ordered to “immediately cease and desist from marking fraudulent statements and other misrepresentations that operate or would operate as a fraud upon investors.”
According to the paperwork, the Securities Division was contacted by the Miami office of the Securities and Exchange Commission regarding Castillo being flagged in a suspicious activity report. The SEC stated it had information indicating that Castillo had received funds from at least one Mississippi investor, and possibly others, while acting as an unregistered and unlicensed investment advisor.
The SEC initially reported that Castillo had received at least $55,000 in transfers for investment accounts.
“Upon review of Castillo’s bank records, the Division discovered that after investor money was deposited, Castillo made many purchases including, but not limited to, two automobiles, multiple all-terrain vehicles, and various other lavish expenditures. Additionally, Castillo would make large cash withdrawals and, in some instances, pay back previous investors,” the order reads.
The SOS Securities Division reported Castillo had received more than $850,000 from investors, but there was no evidence of even “one single transaction indicating that Castillo is investing the funds in securities.”
Dated Oct. 25, 2023, the order was delivered via the United States Postal Service on Oct. 27 to an individual at the Jackson-Liberty address, according to SOS Communications Director Elizabeth Jonson. Castillo had 30 days to apply for a hearing to contest any claims, the order stated.
“The Securities Division received no request for a hearing,” Jonson said.
It is unknown at this time whether Castillo has been served with any other papers related to this case, if he has been charged with a crime or crimes, or if there are criminal or civil charges pending.
“Unfortunately, we can’t answer this question because this remains an open and ongoing investigation,” said Jonson.