WASHINGTON The former chief executive of defunct drug company Inyx Inc (IYXI.PK) has been charged in connection with a fraud scheme that caused more than $100 million in losses and led to the collapse of one of Puerto Rico's largest banks, the U.S. Justice Department said on Friday.
Jack Kachkar, 53, of Key Biscayne, Florida, was charged with eight counts of wire fraud in an indictment filed on Aug. 4 and unsealed on Friday, the department said in a news release. It said the scheme led to the closure of Westernbank Puerto Rico in April 2010.
On Friday Kachkar was arrested and made his first court appearance. He could not immediately be reached for comment.
According to the indictment, Kachkar, who served as Inyx chairman and CEO from 2005 to 2007, caused fraudulent customer invoices to be submitted as collateral for loans from Westernbank and embezzled the proceeds for his personal use.
The Justice Department said Kachkar misappropriated about $25 million to buy expensive real estate in Miami, luxury vehicles and a private jet.
Inyx, which had been listed on the Nasdaq exchange, filed for bankruptcy in 2007.
After the closure of Westernbank Puerto Rico, the Federal Deposit Insurance Corporation arranged for its $8.6 billion of deposits to be transferred to Banco Popular de Puerto Rico.
(Reporting by Eric Beech; Editing by Mohammad Zargham and Richard Chang)