Woman Accused of Stealing Detroit Pension Fund Surrenders in Florida After Trip to Nicaragua

In August of this year, George and Teresa Kastanes were accused of initiating a Ponzi scheme which allegedly stripped more than $10 million from the Detroit Police and Fire Retirement fund.

The Florida couple received a loan in 2008 in the amount of $9.9 million from the pension system according to news reports. This money was purportedly to be used for investing in distressed properties for resale by the couple, who operated Paramount Land Holdings, a South Carolina based company. However, a federal complaint against the couple stated that no payments were ever made in the agreement.

On Tuesday, November 13, Teresa Kastanes surrendered to authorities in Fort Lauderdale, FL after arriving back in the U.S. following a trip to Nicaragua. Kastanes, who is 54 years old, was escorted off of the plane by Homeland Security agents.

News reports state that the pension fund money was to be used to purchase and restore more than 1,400 homes in the Detroit area which had been foreclosed upon. Instead, about half of the money was allegedly used for the purchase of jewelry and exotic art. Court documents state that only $2 million in interest was repaid to the retirement system.

Abner McWhorter was a partner in the Ponzi scheme with the Kastanes, who had approached him about the land-purchase business proposal. McWhorter presented the proposal to the pension board at Paramount Limited where he was president; the board granted the $10 million loan although it did not invest in the business. After reporting to the pension board in July of 2009 that the business was thriving, he requested an additional $8 million. It was while investigating the second loan that “numerous substantial breaches” relating to the initial loan were identified by the board.

Sadly, after being accused in the Ponzi scheme McWhorter took his own life in 2011. Teresa Kastanes’ husband was arrested earlier this year after federal agents were ordered by Judge Raymond Ray to find and arrest the couple who had failed to show up for court appearances. Teresa Kastanes was released from custody after surrendering her passport.


Michigan white collar crime attorneys know that the penalties for those convicted of Ponzi schemes are harsh. If you are under investigation or have been charged with any type of offense involving fraudulent activities, consult with an aggressive Michigan criminal defense lawyer right away for effective legal guidance and representation.