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Chief Executive Officer of Pharmaceutical Company Charged in $100 Million Fraud Scheme
Scheme Caused the Collapse and Failure of One of Puerto Rico's Largest Banks
The former chairman and CEO of a multinational pharmaceutical company was charged in an indictment unsealed today in connection with a fraud scheme that caused over $100 million in losses and led to the collapse and failure of Westernbank Puerto Rico (Westernbank), once one of Puerto Rico's largest banks.
Assistant Attorney General Leslie R. Caldwell of the Justice Department's Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, U.S. Attorney Rosa Emilia Rodriguez-Vélez of the District of Puerto Rico, Acting Inspector General Fred W. Gibson of the Federal Deposit Insurance Corporation's Office of Inspector General (FDIC-OIG), Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service-Criminal Investigation (IRS-CI) Miami Field Office, Acting Special Agent in Charge Ricardo Mayoral of U.S. Immigration and Customs Enforcement's Homeland Security Investigations (HSI) San Juan and Special Agent in Charge Douglas A. Leff of the FBI's San Juan Division made the announcement.
Jack Kachkar, 53, of Key Biscayne, Florida, was charged with eight counts of wire fraud in an indictment filed on Aug. 4, 2016, in the Southern District of Florida. Kachkar was arrested and made his initial appearance today.
According to the indictment, from 2005 to 2007, Kachkar served as chairman and CEO of Inyx Inc., which was publicly traded on the Nasdaq Over-the-Counter Bulletin Board. Beginning in early 2005, Kachkar and others allegedly caused Westernbank to enter into a series of agreements to provide loans and lines of credit to Inyx and its subsidiaries in exchange for a security interest in the assets of Inyx and its subsidiaries.
The indictment alleges that Kachkar caused false and fraudulent customer invoices to be submitted as collateral for loans from Westernbank; made false and fraudulent representations to Westernbank executives about purported imminent repayments of the Inyx loans and the value of assets he pledged as a guarantee for these loans; and misappropriated and embezzled the fraud proceeds for his personal use and benefit. During the course of the scheme, Kachkar allegedly misappropriated approximately $25 million in fraudulent proceeds to his personal bank accounts and also misappropriated an additional $9.6 million in fraudulent proceeds to a bank account in the name of his associate. Kachkar also allegedly used the proceeds from the scheme to pay for, among other things, multiple high-end real estate properties in Miami, luxury vehicles and a private jet.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FDIC-OIG, IRS-CI, HSI and FBI investigated the case. Trial Attorney Michael N. Berger and Senior Litigation Counsel John Michelich of the Criminal Division's Fraud Section are prosecuting the case.
[Source: DOJ, Office of Public Affairs, Criminal Division, Criminal Fraud, USAO - Florida, Southern, USAO - Puerto Rico, 30Sep16]
Corruption and Organized Crime
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