Former Inyx chairman convicted for fraud that led to collapse of Puerto Rico bank

By PharmaCompass

2019-07-11

Impressions: 83 Article

Jack Kachkar, former chairman and CEO of Inyx Inc, a publicly-traded multinational drug company, has been convicted of financial fraud. The 56-year-old South Florida resident has been sentenced to 30-years imprisonment by a federal judge in Miami, followed by five years of supervised release.

Kachkar has been convicted for his role in a US$ 100 million international fraud scheme that led to the collapse of Westernbank, one of Puerto Rico’s largest banks.

US District Judge Donald Graham also ordered Kachkar to pay US$ 103.5 million in restitution to the Federal Deposit Insurance Corporation (FDIC) as receiver for Westernbank.

During 2005 to 2007, when Kachkar served as chairman and CEO of Inyx Inc., he caused Westernbank to enter into a series of loan agreements in exchange for a security interest in the assets of Inyx and its subsidiaries.

The trial evidence showed that Kachkar orchestrated a scheme to defraud Westernbank by causing numerous Inyx employees to make tens of millions of dollars worth of fake customer invoices purportedly payable by customers in the UK, Sweden and elsewhere.

Kachkar used US$ 100 million worth of phony receivables as collateral to obtain loans that Inyx failed to repay.

The evidence showed that Kachkar diverted tens of millions of dollars for his own personal benefit, including for the purchase of a private jet, luxury homes (in Key Biscayne and Miami), luxury cars, luxury hotel stays, and extravagant jewelry and clothing expenditures.

Around June 2007, Westernbank declared the loan in default and ultimately suffered losses exceeding US$ 100 million on the Inyx loans. According to trial evidence, these losses later triggered a series of events leading to Westernbank’s insolvency and ultimate collapse.

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