Crime

Two guilty pleas and a death: The sun sets on a $3.6 million investor fraud

The Castelberry Financial Services fraud, a $3.6 million scam perpetrated out of Palm Beach County by established white collar malefactors, reached many ends in federal court and custody last week.

Castleberry CEO Norman Strell, 73, charged with 16 counts of fraud by wire, radio or television, filed for a hearing to change his plea to guilty. That hearing is on Friday.

Last Friday, Castleberry broker Scott Strochak, 58, pleaded guilty to conspiracy to commit wire fraud in criminal court and consented to a civil court agreement on charges from the Securities and Exchange Commission.

Thursday’s entry on the court docket for Castleberry president and COO T. Jonathon Turner refers to “Court and counsel having been apprised by the US Marshal’s of Mr. Turner’s untimely passing.” Said passing occurred Aug. 12 according to The Palm Beach Post, while Turner was in federal custody awaiting trial on the same fraud charges as Strell.

What’s left is the sentencing for Strell and Strochak and finding money for the 15 investors bilked out of $3.6 million.

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Strell registered Castleberry Financial Services Group with the state of Florida in April 2016. Four months later, Strochak began serving a six-month suspension of his broker’s license for not complying with two arbitration awards. Turner finished serving a 17-year Florida prison stretch for multiple fraud and grand theft charges in September 2016.

Strochak’s admission of facts says beginning in October 2017, Turner and Strell began promising “principal-protected, equity-like fixed income returns” by investing in “surety bond protected funds.” That protection, investors were told, would come in the form of insurance by CNA Surety and Chubb Group of Companies.

Guaranteed gains would be 7.93 to 12.23 percent per year. They bragged that year-old Castleberry had invested $800 million over the previous five years in local businesses. And Turner had “extensive industry experience and post-graduate educational qualifications in business and law.”

Strochak sold these lies and Castleberry to 10 investors, some of whom were in Florida, and raised $2,541,266. That earned him $70,345, the commission part of the $270,325 Castleberry paid him in commissions and salary.

Strochak’s SEC deal requires him to pay $250,056. His criminal sentence undoubtedly will involve more restitution, as will that of Strell, who reached his own agreement with the SEC in April while in pretrial intervention for insurance fraud.

The Norman Strell Revocable Trust gave up $97,456 in ill-gotten gains and interest. His daughter, 44-year-old Suzanne Strell, carried the title of Castleberry’s director of operations. She paid the SEC $241,611.50.

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Since 1989, David J. Neal’s domain at the Miami Herald has expanded to include writing about Panthers (NHL and FIU), Dolphins, old school animation, food safety, fraud, naughty lawyers, bad doctors and all manner of breaking news. He drinks coladas whole. He does not work Indianapolis 500 Race Day.
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