Chicagoland's Mini-Madoff Pleads Guilty

By Prescott Carlson in News on Aug 26, 2009 8:15PM

Frank Castaldi of northwest suburban Prospect Heights entered a guilty plea this afternoon to federal charges stemming from the accusation that he had bilked investors out of tens of millions of dollars in a lengthy Ponzi scheme. According to court documents, Castaldi managed to convince over 450 people to give him $77 million dollars to purchase 6 month promissory notes, which Castaldi guaranteed would net a 10% - 15% return on their investment.

Castaldi told his marks that he was going to invest their money into a number of his different businesses, and in quasi certificates of deposit. Castaldi did no such thing, and in classic Ponzi scheme style he used some of the new investors funds to make payments to older investors. Castaldi started building his pyramid back in March, 1986 and remarkably was able to continue the scam for over 20 years

He was charged with two counts of mail fraud and one count of "corruptly endeavoring to impede the Internal Revenue Service" in connection with the fraud.