Police Inspector Castro pleads not guilty, free on bail

Philadelphia Police Inspector Daniel Castro pleaded not guilty Monday to federal charges of extortion and bribery and was allowed to remain free on bail pending his trial.

Castro, charged in an alleged scheme to strong-arm a former business partner into returning a $90,000 investment, had been placed under 24-hour house arrest since Friday. On Monday, his attorney, William Brennan, successfully petitioned a magistrate judge to lift that restriction.

Castro, 47, is a lifelong resident of Philadelphia with strong ties to the area and no prior criminal record, Brennan said.

He called Castro's arrest "an unfortunate situation."

"This is not your typical police-corruption case," Brennan said in court. "This is a situation in which an individual has had an exemplary career and is alleged to have, in his personal life, made a very bad mistake."

Assistant U.S. Attorney Leo R. Tsao countered that Castro deserved house arrest because he encouraged a hired enforcer to use threats of violence in order to collect Castro's money. At times, Tsao said, Castro was led to believe that the enforcer had used violence to collect some of the money.

Castro "has demonstrated his willingness to violate the law," Tsao said.

Castro, who is out on $100,000 bail after his Friday arrest, was suspended from the police force for 30 days with the intent to dismiss.

Several of Castro's friends and family members attended the arraignment Monday, including his mother, Virginia Castro. After the proceedings, Castro stood outside the courthouse with Brennan, who spoke briefly to the media gathered there.

Without commenting on the charges against Castro, Brennan cautioned against making a rush to judgment.

"The ink's not dry on the indictment, and people are holding press conferences saying he's guilty, he's a disgrace," Brennan said. "This is a guy who has lived an exemplary life."

Brennan added that the federal indictment against Castro was "one side of the story."

Castro, whose full name is Carlo Daniel Castro, declined to comment.

Though Castro is the 15th officer to be put in handcuffs since March 2009, he is believed to be the highest-ranking officer to face criminal charges in the last two decades. He was well-known in the department, where he rose quickly through the ranks over 25 years. Earlier this year, he was assigned to head up the Traffic Division, and, as detailed in the indictment, he had ambitions of one day becoming police commissioner.

Prosecutors have indicated they possess wiretapped recordings to support the allegations against Castro.

The federal indictment unsealed Friday alleges that Castro invested $90,000 in a real estate venture that failed to generate any revenue. When the deal went bad, Castro tried for several years to get his money back and even filed a lawsuit as part of that effort.

In April, according to the indictment, Castro went to someone he knew, asking if the person could hire a "collector" who could get Castro's money back, plus $50,000 interest. The person Castro approached was a witness who was cooperating with the FBI and who informed the FBI of Castro's plan. According to the indictment, that witness then introduced Castro to a "collector," who was actually an undercover FBI agent.

Castro is also accused of using a police computer to look up a license-plate number as a favor to the FBI witness - the license-plate number of someone who supposedly owed the witness money. In exchange for Castro's help, the indictment alleges, the FBI witness gave him a 42-inch flat-screen television.