Florida company with a convicted con man executive charged with $3.6 million fraud
A Wellington business run in part by a convicted fraudster is charged with pulling a $3.6 million investor fraud since February 2018 and had its assets frozen by the Securities and Exchange Commission.
The complaint charging Castleberry Financial Services with five counts of fraud was filed in federal court in West Palm Beach and unsealed last week.
Castleberry’s website appeared to be taken down Friday.
The company listed no-longer-registered-with-the-SEC broker Norman Strell, 72, as its chairman and CEO and his daughter, Suzanne Strell, 44, as director of operations. Norman Strell went into a pretrial diversion program in November after being charged with insurance fraud.
Castleberry’s vice chairman, president and chief operating officer is T. Jonathon Turner, the name now used by Jon Brothers, 52. Brothers spent 17 years, March 1999 to September 2016, in Florida prison on forgery and grand theft charges.
That was not disclosed in Turner’s biography on Castleberry’s website. That same bio claimed he was CEO and president of Financial Services of Palm Beach (true, according to Sunbiz.org) and TGK Financial Services of Miami (not true). No TGK Financial Services existed in Florida, according to Sunbiz. But, among those familiar with South Florida crime, “TGK” is short for Turner Guilford Knight Correctional Center, Miami-Dade’s main jail. Turner likely spent time in TGK after the 1993 arrest that led to his conviction.
Cheeky though that may be, the SEC had no sense of humor about that or any of Castleberry’s other alleged falsehoods. In the criminal complaint, the SEC claimed:
▪ ”Castleberry falsely represented to investors that it had hundreds of millions of dollars in capital invested in local businesses and a portfolio of hundreds of real estate properties that generated millions of dollars in revenue annually. ln truth, Castleberry never had millions of dollars invested in businesses or real estate and never derived significant revenue from investments.”
▪ Castleberry told investors their money would be invested in business and real estate. Instead, Norman Strell and Turner used the money themselves or stashed it with Suzanne Strell or the Norman M. Strell Revocable Trust. Along with Castleberry All Sports Services Group, the SEC said, they “all received proceeds of the fraud without any legitimate entitlement to the funds.”
Among the transfers the SEC mentions are $238,000 to a joint account of Turner and Suzanne Strell and at least $427,000 toward buying and improving a home at 577 Squire Dr. in Wellington. That address seems to be in error as Palm Beach County property records say that home last sold for $1.5 million in March 2016, six months before Turner’s release from prison.
▪ ”Castleberry purported to provide “principal-protected ‘equity-like’ fixed income returns’‘ by investing and managing “surety-bond protected funds’‘ for investors. Castleberry’s offering materials and investor solicitations claimed the principal invested into its funds was “fully insured and bonded’‘ by leading insurance companies such as CNA Surety and Chubb Group of Companies.”
The Bond & Insurance page of Castleberry’s website did give the impression of a relationship with financial powerhouses CNA Financial Group, The Chubb Group and Hiscox Insurance. Potential investors could click on links to PDFs describing each company’s services and credentials.
While a Chubb spokesperson said the company doesn’t discuss clients, CNA doused the idea of any association with Castleberry.
In an email to the Miami Herald, CNA Director of Public Relations Brandon Davis said, “CNA Surety does not have a business relationship with Castleberry Financial Services Group, now or in the past. The CNA underwriting companies have been made aware of this matter and are cooperating with the investigating authorities.”
This story was originally published March 8, 2019 at 12:23 PM.
