| UNITED STATES OF AMERICA | |
| Before the | |
| SECURITIES AND EXCHANGE COMMISSION | |
| SECURITIES EXCHANGE ACT OF 1934 | |
| Release No. 66796 / April 12, 2012 | |
| ACCOUNTING AND AUDITING ENFORCEMENT | |
| Release No. 3380 / April 12, 2012 | |
| ADMINISTRATIVE PROCEEDING | |
| File No. 3-14846 | |
| : | |
| In the Matter of : ORDER INSTITUTING ADMINISTRATIVE | |
| : PROCEEDINGS PURSUANT TO RULE | |
| JORGE L. CASTILLO, CPA, : 102(e) OF THE COMMISSION’S RULES OF | |
| : PRACTICE, MAKING FINDINGS, AND | |
| Respondent : IMPOSING REMEDIAL SANCTIONS | |
| ____________________________________ : | |
| I. | |
| The Securities and Exchange Commission (“Commission”) deems it appropriate and in the | |
| public interest that public administrative proceedings be, and hereby are, instituted against Jorge L. | |
| Castillo (“Castillo” or “Respondent”) pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of | |
| Practice.1 | |
| II. | |
| In anticipation of the institution of these proceedings, Respondent has submitted an Offer | |
| of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the | |
| purpose of these proceedings and any other proceedings brought by or on behalf of the | |
| Commission, or to which the Commission is a party, and without admitting or denying the findings | |
| 1 Rule 102(e)(3)(i) provides, in relevant part, that: | |
| The Commission, with due regard to the public interest and without preliminary hearing, | |
| may, by order, . . . suspend from appearing or practicing before it any . . . accountant . . . who has | |
| been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his | |
| or her misconduct in an action brought by the Commission, from violating or aiding and abetting | |
| the violation of any provision of the Federal securities laws or of the rules and regulations | |
| thereunder. | |
| 2 | |
| herein, except as to the Commission’s jurisdiction over him and the subject matter of these | |
| proceedings, and the findings contained in Section III. 2. below, which are admitted, Respondent | |
| consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) | |
| of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions | |
| (“Order”), as set forth below. | |
| III. | |
| On the basis of this Order and Respondent’s Offer, the Commission finds that: | |
| 1. Castillo, age 56, is and has been a certified public accountant licensed to | |
| practice in the State of New Jersey. From at least 2003 through 2010, Castillo served, and publicly | |
| presented himself, as the independent, outside auditor for Provident Capital Indemnity Ltd. (“PCI”), | |
| a purported insurance and reinsurance company based in Costa Rica. | |
| 2. On April 6, 2012, a final judgment was entered against Castillo by consent, | |
| permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act | |
| of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933, in the civil | |
| action entitled SEC v. Provident Capital Indemnity, Ltd., Minor Vargas Calvo, and Jorge L. | |
| Castillo, Civil Action No. 3:11-CV-045 (REP), in the United States District Court for the Eastern | |
| District of Virginia. | |
| 3. The Commission’s Complaint alleged, among other things, that Castillo | |
| falsely represented that he had audited PCI’s financial statements from at least 2003 through | |
| 2009, when, in fact, he never conducted an audit of PCI’s financial statements for those years; | |
| rather than conduct proper audits, he instead issued clean audit opinions at the bidding of PCI’s | |
| president, which falsely stated that PCI’s financial statements for those years “present fairly, in | |
| all material respects, the financial position of [PCI] in conformity with generally accepted | |
| accounting principles.” The Complaint alleged that Castillo’s actions, in turn, supported the | |
| illusion that PCI had materially larger assets – including a Long-Term Asset that purportedly | |
| comprised 70% to 80% of PCI’s total assets – and a greater financial wherewithal to support its | |
| obligation on financial guarantee bonds issued in connection with life settlement investments. | |
| Castillo allegedly knew or was reckless in not knowing that the Long-Term Asset did not exist | |
| and assisted PCI’s president in manufacturing false backup for the Long-Term Asset. The | |
| Complaint also alleged that Castillo knew, or was reckless in not knowing that PCI was | |
| providing his false audit reports to a rating agency that, in partial reliance on those reports, gave | |
| PCI a high rating. The Complaint also alleged that, on occasion, Castillo assisted PCI’s | |
| president in formulating responses to the rating agency’s questions. The Complaint also alleged | |
| that PCI’s president asked Castillo to issue certificates to life settlement issuers that falsely stated | |
| PCI had made payments to purchase reinsurance, which Castillo did; such actions supported the | |
| illusion that PCI’s obligations on financial guarantee bonds were backed by reinsurance. | |
| 4. The Commission’s Complaint further alleged that in 2010, after learning of | |
| a regulatory inquiry into his conduct, Castillo asked the president of PCI to manufacture backup | |
| 3 | |
| material to support Castillo’s purported audit procedures and told the PCI president that he had | |
| destroyed or was in the process of destroying all of his e-mails. Castillo also urged PCI’s | |
| president to destroy documents. | |
| IV. | |
| In view of the foregoing, the Commission deems it appropriate and in the public interest to | |
| impose the sanction agreed to in Respondent Castillo’s Offer. | |
| Accordingly, it is hereby ORDERED, effective immediately, that: | |
| Castillo is suspended from appearing or practicing before the Commission as an | |
| accountant. | |
| By the Commission. | |
| Elizabeth M. Murphy | |
| Secretary | |