A former CEO and chairman of a multinational pharmaceutical manufacturing company will spend the next 30 years in prison for an international fraud scheme that led to the collapse of one of the largest banks in Puerto Rico.
According to the Department of Justice, 56-year-old Jack Kachkar ran the now-bankrupt Inyx Inc. from 2005 to 2007.
The scheme started in 2005, when Kachkar took out loans from Westernbank of Puerto Rico in exchange for a security interest in Inyx's assets. The bank advanced money based on the company's customer invoices. However, at the same time Kachkar had multiple employees forge tens of millions of dollars worth of fake customer invoices from customers around the world. He used the fake invoices to continue to borrow from Westernbank.
He also lied about his company's assets. For example, Kachkar told Westernbank executives that he had mines in Mexico and Canada worth hundreds of millions of dollars. He used the additional collateral to continue to borrow, but it was worth a fraction of what he claimed.
Overall, Kachkar took Westernbank for about $142 million, primarily using fake customer invoices. He spent tens of millions of dollars to live lavishly, including a private jet, luxury homes in Key Biscayne and Miami, Florida, luxury cars, luxury hotel stays, and extravagant jewelry and clothing expenditures.
Around June 2007, Westernbank declared the loan in default and took a $100 million bath on the Inyx loans. The losses eventually led to Westernbank’s insolvency and ultimate collapse. At the time, the bank had 46-branches, 1,500 employees and it was one of the largest banks in Puerto Rico.
Kachkar was convicted of eight counts of wire fraud on February 4, 2019, and was sentenced July 3, 2019. He was also ordered to pay $103,490,005 in restitution.