Chief Executive Officer of Pharmaceutical Company Charged in $100 Million Fraud Scheme
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Chief Executive Officer of Pharmaceutical Company Charged in $100 Million Fraud Scheme

Scheme caused the collapse and failure of one of puerto rico's largest banks

October 3, 2016

The former chairman and CEO of a multinational pharmaceutical company was charged in an indictment unsealed recently in connection with a fraud scheme that caused over $100 million in losses and led to the collapse and failure of Westernbank Puerto Rico, once one of Puerto Rico's largest banks.

Assistant Attorney General Leslie R. Caldwell of the U.S. Justice Department's Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, and U.S. Attorney Rosa Emilia Rodriguez-VĂ©lez of the District of Puerto Rico, among several other officials, made the announcement.

Jack Kachkar of Key Biscayne, Florida was charged with eight counts of wire fraud in an indictment filed on August 4, 2016 in the Southern District of Florida. Kachkar was arrested and made his initial appearance last week.

According to the indictment, from 2005 to 2007, Kachkar served as chairman and CEO of Inyx, which was publicly traded on the Nasdaq Over-the-Counter Bulletin Board. Beginning in early 2005, Kachkar and others allegedly caused Westernbank to enter into a series of agreements to provide loans and lines of credit to Inyx and its subsidiaries in exchange for a security interest in the assets of Inyx and its subsidiaries.

The indictment alleges that Kachkar caused false and fraudulent customer invoices to be submitted as collateral for loans from Westernbank; made false and fraudulent representations to Westernbank executives about purported imminent repayments of the Inyx loans and the value of assets he pledged as a guarantee for these loans; and misappropriated and embezzled the fraud proceeds for his personal use and benefit.

During the course of the scheme, Kachkar allegedly misappropriated approximately $25 million in fraudulent proceeds to his personal bank accounts and also misappropriated an additional $9.6 million in fraudulent proceeds to a bank account in the name of his associate. Kachkar also allegedly used the proceeds from the scheme to pay for, among other things, multiple high-end real estate properties in Miami, luxury vehicles and a private jet.

The Justice Department stresses that the charges and allegations contained in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.