• Prosecutors are asking a California federal judge to jail a recent fugitive, Justin Costello, without bail. He is accused of a brazen $35 million fraud.
• Costello falsely told investors he was a billionaire, a Harvard MBA and a special forces veteran who was wounded twice in Iraq.
• When an FBI SWAT team caught Costello, he was carrying a backpack containing gold bars worth $12,000, U.S. currency worth $60,000 and $10,000 in Mexican pesos.
• He is accused of schemes involving penny stocks, shell companies and cannabis businesses, and faces a related Securities and Exchange Commission civil lawsuit.

Prosecutors on Tuesday asked a California federal judge to jail without bail a recent fugitive accused of a brazen $35 million fraud that involved him falsely telling investors he was a billionaire, a Harvard MBA and a special forces veteran who was wounded twice in Iraq.

An FBI SWAT team caught the fugitive, Justin Costello, in a remote area near San Diego on Oct. 4. He was carrying a backpack loaded with six one-ounce gold bars worth $12,000, U.S. currency worth $60,000, $10,000 in Mexican pesos and banking cards and checkbooks, prosecutors said in a court filing.

Costello, 42, also had a receipt for a prepaid phone number in the backpack, along with a driver's license with his photograph under the name "Christian Bolter," the filing revealed.

The U.S. Attorney's Office for the Southern District of California cited the backpack's contents and other factors in the filing as it urged a judge to remand Costello to jail pending trial. Prosecutors argued he is "a serious flight risk and a danger to the community."

They noted that Costello failed to surrender to the FBI's San Diego office as he had agreed through his lawyer on Sept. 29. He had been informed that he was set to face a new indictment in federal court in Washington state on a slew of charges related to schemes involving penny stocks, shell companies and cannabis businesses.

Instead, he "became a fugitive," prosecutors wrote.

"The FBI tried to track Costello by his known cellphone numbers but were unsuccessful," prosecutors wrote. "It is believed Costello took countersurveillance measures to prevent being tracked on devices registered to those numbers."

The FBI eventually "was able to track Costello through location information received from the theft recovery service for the Alfa Romeo vehicle he was driving," the filing revealed.

The SWAT team tracked that car to a remote area of El Cajon, California, where they saw him walking wearing the backpack, the filing said.

When agents arrested him, Costello "stated he was surprised agents had found him because he turned his phone off."

He also told the agents he had not surrendered as agreed, "because he recently had a stroke and needed to recover."

"Costello said that he could have outrun the SWAT agents but for the stroke," the filing said. "Costello admitted that he was the person charged in the Indictment and encouraged agents to 'Google' him to read about the case," it continued.

"Costello was likely referring to the very significant media coverage of both his criminal charges and subsequent flight from prosecution," prosecutors wrote in a footnote, which links to CNBC's article about him published last week.

Prosecutors said the FBI soon after learned that the gold in the backpack was part of a larger quantity of gold, worth $94,000, that Costello purchased in April "using money he had stolen from a banking client."

Investigators have determined that since mid-September, the accused stopped using his only known personal bank account for personal expenses, and instead was using multiple corporate accounts in an apparent effort to cover his tracks online, prosecutors said.

"The weight of the evidence" against Costello in the pending case — where is he charged with wire fraud and securities fraud — "is strong and heavily documented," they added.

Costello, who has ties to La Jolla, California, and Las Vegas, is accused of scamming thousands of investors and others out of millions of dollars by making false claims that companies he controlled had plans to buy 10 other firms.

He also is accused of using one of the companies, Pacific Banking Corp., to divert at least $3.6 million from three marijuana companies that were clients to benefit himself and other companies he owned.

Prosecutors have said that Costello used about $42,000 of money allegedly scammed from investors to pay for costs associated with his wedding. The event featured a cake and ice sculpture with the iconic James Bond 007 movie logo, as well as a belly-dancing performance by his bride.

Costello allegedly duped investors with his tall tales of being a billionaire, an Ivy League grad and an Iraq veteran, prosecutors said. They noted that none of the claims were true.

He also "falsely claimed that two '[l]ocal titans' of the Seattle business community were 'supporting' him," prosecutors wrote in their court filing. They did not identify those business leaders by name.

Costello is due to appear in San Diego federal court on Tuesday. He is expected to soon be transferred to Washington state to face the indictment in U.S. District Court for the Western District of Washington.

A lawyer who is representing him in civil litigation by one of the marijuana companies he is accused of swindling did not immediately respond to a request for comment.

Costello also faces a civil lawsuit filed by the SEC on the same day that criminal charges against him were unsealed. That suit largely tracks the claims in the criminal indictment.