A Wallingford man has been charged with operating a Ponzi scheme.

Joseph A. Castellano was charged in New Haven with fraud and money laundering offenses stemming from an investment scheme that defrauded individuals of more than $1.5 million.

The indictment alleges that Castellano operated numerous businesses out of offices in Wallingford, including Casbo Investments, Wallingford Investors Limited, AIM Realty Investors and Castellano & Co. LLC. As a Certified Public Account and owner of Castellano & Co., he established a client base to which he offered financial services and investment opportunities as part of his tax preparation business. The indictment alleged that beginning in approximately 2007, Castellano falsely told his investors he had clients in need of capital that were unable to secure funding from traditional sources. Castellano told the investors that he would obtain them for a consistent rate of return from approximately 6 to 8 percent annually. Through Casbo Investments, Castellano allegedly also prepared fraudulent documents with investment contracts to back up his promise to return the principal amount, with interest, at any time.

However, no investments were made and Castellano allegedly used the funds for his own benefit, including giving money to investors as false interest payments.

The indictment alleges through this scheme that Castellano defrauded more than 10 investors.

Castellano was arrested Wednesday and detained. He was released on Thursday on a $250,000 bond.

The indictment charges Castellano with 10 counts of wire fraud, one count of mail fraud and four counts of securities fraud, and could face up to 20 years in prison on each count. The indictment also charges Castellano with three counts of money laundering, which carries a maximum term of imprisonment of 10 years on each count.