October 3, 2016
By Alex Keown, BioSpace.com Breaking News Staff
MIAMI – Jack Kachkar, the former chairman and chief executive officer of Inyx Pharmaceuticals has been charged in connection with a fraud scheme that allegedly caused more than $100 million in losses and led to the collapse and failure of Westernbank Puerto Rico, once one of Puerto Rico’s largest banks, the U.S. Department of Justice alleged.
On Sept. 30 Kachkar was charged with eight counts of wire fraud in an indictment filed on Aug. 4. He was arrested on Sept. 30, the U.S. Attorney’s Office for the Southern District of Florida announced on Friday. Federal authorities allege Kachkar duped the bank out of more than $100 million and used the proceeds to buy property and other luxury items. The scheme caused the downfall of the bank, according to the indictment.
Kachkar. 53, served as CEO of Inyx from 2005 to 2007. The company filed Chapter 11 in 2007. According to the indictment, in 2005, the first year Kachkar helmed Inyx, Kachkar and others in the company “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.” Additionally, the indictment says that Kachkar allegedly submitted counterfeit invoices to the bank in Puerto Rico as collateral for the loans. Also, it is alleged that Kachkar made false statements “about imminent repayment of the loans” as well as the assets he pledged as collateral for the loans.
Federal authorities said Kachkar allegedly misappropriated $25 million from the loan and put it in his personal bank accounts. He also misappropriated an additional $9.6 million and put that in the account of a co-conspirator, the government said. Some of the funds were used by Kachkar to acquire “high-end real estate properties in Miami, luxury vehicles and a private jet.”
Westernbank shut down in 2010 due to insufficient funds, the South Florida Business Journal reported. The bank was taken over by the Federal Deposit Insurance Corp., Bloomberg said.
When Inyx filed for Chapter 11 in 2007 the company filed a lawsuit against Westernbank seeking $500 million in damages. According to a press release issued by Inyx in 2007, the complaint alleged “Westernbank acted in bad faith and in a commercially unreasonable manner by blocking the flow of funds from Inyx’s customers to the company, and preventing the Inyx companies from paying their debts.”
