arrested in Puerto Rico on mail fraud charges

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arrested in Puerto Rico on mail fraud charges

By: Patti Wenzel

http://www.lakelandtimes.com/news.php?story=1127

The $286,000 Ken allegedly stole from the Lac du Flambeau

Tribe took him far from the Northwoods but it didn't keep him from

the long arm of the law, which caught up with him Dec. 5 in Puerto

Rico.

On Dec. 8, Puerto Rico District Chief U.S. Magistrate Judge Justo

Arenas ruled that be returned to the Western District of

Wisconsin to face a 2004 indictment for six counts of federal mail

fraud.

, also known as Neal and

Castillo , fled the United States for Costa Rica in 2003 with

money he allegedly stole from the tribe in a mold investigation scam.

Even though allegedly conned the tribe out of thousands of

dollars, the grand jury indictment filed in the Western Wisconsin

District of the United States Court is for the mail fraud

allegedly committed when he contracted with Aerotech Laboratories,

Inc., an environmental testing company in Phoenix, Ariz. He mailed

the company mold samples to be tested in December 2002 and then

failed to pay for them.

The background information contained in the indictment alleges that

stole $286,342 from the Lac du Flambeau nation, of which

$66,339 is owed to Aerotech Labs for testing services. The balance

of the stolen funds are for technical and professional services

provided by .

The events leading to the mail fraud are laced with apparent deceit

by , a lack of background checks by the tribe and society's

heightened fear of the potential health risks found in mold.

The criminal account describes as actively devising a scheme

to defraud money from the tribe by misrepresenting himself to tribal

officials, promising to provide scientific and technical services

relating to a potential toxic mold problem in reservation housing

and making false promises to pay Aerotech Laboratories, Inc. for

testing services.

According to the indictment, he made use of three companies,

Environmedic Associates, Environmedic Associates, LLC and Ken

& Associates, LLC to hide payments made for mold testing services in

the course of his fraud.

The con

In 2002, promoted himself as a " distinguished faculty " member

conducting a Madison seminar on water intrusion and mold. A flyer

concerning the seminar described 's credentials as a former

deputy director for the U.S. Department of Agriculture with 30 years

experience in mycology and pathology. It also said he had graduated

summa cum laude with bachelor's and master's degrees in microbiology

from Ohio State University.

According to the indictment, based on the seminar flyer and

conversations with , Lac du Flambeau tribal attorney Alysia

LaCounte contracted with to do limited testing on some

reservation homes to assess the mold situation and provide the tribe

with an estimate for consulting work on the problem.

LaCounte said in a 2003 interview with The Lakeland Times that

neither she nor the tribe did a background check on . She added

that checks are routinely done on gaming employees and child care

workers, but rarely on contractors.

's word and signature were enough for the Lac du Flambeau

leadership.

" One of the reasons why we hired this guy is because he signed an

affidavit saying he was a microbiologist before we signed the

contract, " LaCounte said in 2003.

Based on 's proposed testing and citing his credentials, the

tribe applied for an Imminent Threat Grant from Housing and Urban

Development's Office of Native American Programs (ONAP). The grant,

for up to $425,000, can be used when a verified health or safety

emergency arises that cannot be funded by the tribe.

Following the grant application, provided the tribe with a

written proposal for mold testing in 400 tribal housing units,

quoting a price of $220,000. The price also includes 's time to

train tribal members to do the testing and cleanup of the mold

themselves.

The tribe entered into the agreement and paid 's company

Environmedic Associates $110,003 on Oct. 1, 2002.

Those funds were deposited into a Bank One account owned by .

At approximately the same time, allegedly began e-mail

correspondence with the Finor Organization, in an effort to obtain a

new identity and flee the country. He was told in an e-mail dated

Oct. 12, 2002 that for $25,000 he could receive two applications for

passports and citizenship.

The indictment states that on Oct. 11, 2002 transferred

$50,000 from his Bank One account to an investment company in the

Caribbean island of Dominica and on Oct. 15 he transferred $25,000

to the Finor Organization.

also allegedly made threats to the tribe when he discovered

they were seeking additional expert opinions about the mold problem.

According to the indictment, threatened to break the contract

if HUD experts interfered with his work and claimed he was insulted

that the tribe wasn't relying on his expertise. He told the tribe he

was the most qualified person to deal with mold issues, since he had

testified on behalf of the U.S. government in previous claims.

No record of his testifying as an expert witness in other mold cases

could be found in a search of the Internet.

On Nov. 12, 2002, and the tribe amended the contract to allow

to send mold samples to Aerotech Labs for testing, with the

tribe reimbursing for that expense.

The next day, the tribe paid Environmedic Associates $110,000, the

balance of the service contract with , which was deposited into

his Bank One account. $100,000 of those funds were wired to the

Dominica investment company the next week.

On Nov. 18, 2002 allegedly received notification that he was

now officially a citizen of Costa Rica under the name "

Castillo . "

His final contact with the tribe occurred the week between Christmas

and New Year's Eve 2002, when he provided the tribe with invoices he

said were for testing completed by Aerotech Labs. demanded and

received $66,339 from the tribe as payment for the lab services. He

never paid Aerotech for the testing.

Representatives at Aerotech were unable to confirm by press time if

had contracted the company's services to do mold testing for

the tribe in 2002 or 2003. Aerotech General Manager Fetveit

said the company conducts thousands of mold tests each year and he

was not surprised that someone took advantage of the mold hysteria

in the early 2000s.

He added if had involved them, the company probably had

written off the expense long ago and would probably not pursue

collection.

left the area for Costa Rica on Jan. 17, 2003.

While he was on the lam, wrote rambling letters to Congressman

Sensenbrenner (R-Wisconsin 5th District), admitting he lied

about his credentials to the tribe, but that he was being unfairly

persecuted and targeted for assasination by federal officials and

offering to turn over evidence against the Finor Organization.

" I fulfilled my contractual obligations to the tribe, " wrote

to the congressman.

is being held without bail by U.S. Marshals. His exact

location in the system is unknown at this time, but he will be held

in the Dane County Jail as court proceedings against him continue.

If convicted, faces a maximum sentence of 20 years in federal

prison for each count in the indictment.

Published: January 03, 2006