Ex-Philly Police Inspector Danny Castro Released Early, Gets a Job, Then Finds Out it Was a Mistake

A former Philadelphia police inspector who was convicted for his involvement in a scheme to use violence to collect on a debt was accidentally released early from prison before he was eventually taken back into custody, according to an attorney with knowledge of the case.

Carlo Daniel "Danny" Castro, 50, was sentenced on Oct. 4, 2011 to five years in prison for his involvement in a scheme to use threats of violence and actual violence to collect a $26,000 debt owed to local businessman Alan Kats.

While Castro was scheduled to be released on April 7, 2016, an appeals attorney who asked not to be named because he doesn't represent Castro in this particular case but rather another case told NBC10 Castro was accidentally released this year due to a clerical error at Philadelphia's federal detention center.

A probation officer placed Castro in a home monitoring program, believing he was eligible, the attorney said. Castro prepared for his release for over a month and even had a job with UPS lined up.

The attorney told NBC10 Castro was home for two weeks before officials realized he wasn't actually eligible for the program. Castro was then taken back into custody.

The attorney did not reveal when Castro was released but told NBC10 his client is “devastated.”

A law enforcement source also confirmed with NBC10 Castro was accidentally released and is now back in custody, though the source also did not reveal when Castro was actually released.

Castro invested $90,000 in a Delaware real estate development project with his business associate, Wilson Encarnacion, back in 2006. The project never materialized however and Castro repeatedly demanded Encarnacion repay him but Encarnacion failed to do so, according to prosecutors.

In April, 2010, Castro hired a man, referred to as the “Collector,” to collect the original $90,000 debt as well as $60,000 in interest from Encarnacion, prosecutors said. Castro understood the Collector would scare Encarnacion into paying back the money, according to officials.

Unbeknown to Castro, the “Collector” was actually an undercover FBI agent.

On Sept. 10, 2010, Castro authorized and instructed the undercover agent into using violent threats to collect his debt from Encarnacion. That same day he also referred the undercover agent to William Wong, who had asked Castro for help in collecting a $26,000 business debt owed to Alan Kats by Romeo Calleung, prosecutors said.

Both Wong and Kats knew the collector would use threats of violence and actual violence if necessary in collecting the debt from Calleung, according to investigators. Kats is accused of accepting $8000 supposedly collected by the agent from Calleung.

Castro spoke with Wong about the status of the Calleung extortion over the next several months and also accepted a $500 referral fee from the Collector for referring him to Wong and Kats, investigators said.

After an investigation involving the FBI, Castro was arrested in November of 2011. At the time, Castro was in charge of the Philadelphia Police department’s traffic division.

In June, 2011, Castro pleaded guilty to one count of conspiracy to interfere with the interstate commerce by extortion. He was convicted in April, 2011 to five years in prison for lying to the Federal Bureau of Investigation in connection with another extortion scheme.

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