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Castle v United States - fraudulent lending scheme

Friday, July 27, 2018

 

The Federal Court of Australia has recently upheld the extradition of an allegedly fraudulent American citizen, Mr Castle. Mr Castle is alleged by the US to have masterminded a complex fraudulent lending scheme in which he duped homeowners out of millions of dollars.

 

The scheme targeted homeowners likely to foreclose in the future and convinced them to sell their house to Mr Castle and his partners. Homeowners were promised relief from forfeiture and a percentage of sale proceeds if they allowed Mr Castle’s company to sell their house. They were also promised possible tax returns if they signed up to Mr Castle’s ‘charitable’ corporations – called Shon-te-East-a and the Pillow Foundation.

 

 

In reality, homeowners were forced to leave their house and surrender control over its title, and yet still faced foreclosure and repayment towards the original legitimate lenders. Needless to say they did not receive any sale proceeds or tax returns.

 

Even more bizarre than these facts are the legal arguments on which Mr Castle sought to avoid extradition. Mr Castle represented himself in court, and claimed to be an internationally protected person (“IPP”) due to his employment in the International Treasury Controller (“ITC”). He therefore argued the court had no jurisdiction to extradite him. However, the court found no existence of the so-called ITC and even stated that the documents had “an air of unreality about them”. The only records of the organisation were a handful of letters marked ‘top secret’ produced by Mr Castle for the court.

 

 

In any event, even proving the existence of the ITC would not have been sufficient to give Mr Castle immunity from extradition. The court concluded there was no valid basis for immunity under Australian law, and Mr Castle’s case was dismissed.

 

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