CEO indicted in fraud scheme that collapsed Puerto Rico bank

SAN JUAN, Puerto Rico – The former CEO of an international pharmaceutical company was indicted Friday in a more than $100 million fraud scheme that authorities say led to the collapse of one of Puerto Rico’s largest banks.

The U.S. Justice Department said Jack Kachkar faces eight counts of wire fraud from his time as chairman and CEO of Inyx Inc. from 2005 to 2007.

He is accused of using fake customer invoices as collateral to obtain loans from Westernbank and allegedly lied about imminent repayments. Officials said the bank had provided the loans and lines of credit in exchange for a security interest in the company’s assets, as well as its subsidiaries.

Authorities said Kachkar then misappropriated $25 million and used a portion of that money to buy a jet, expensive cars and high-end property in Miami. They said he also appropriated another $9.6 million in fraudulent revenue to a bank account in his associate’s name

An attorney for Kachkar did not return a message for comment.

Officials closed Westernbank Puerto Rico in April 2010. At the time, it had roughly $12 billion in total assets and nearly $9 billion in total deposits. Banco Popular de Puerto Rico took over the bank.