87-year-old Seattle developer, wife indicted
SEATTLE (AP) — An 87-year-old Seattle real-estate developer and his wife, arrested in France after 16 months on the lam, were indicted Thursday on dozens of charges of bankruptcy fraud and money laundering.
The 43-count grand jury indictment accuses Michael Mastro and his wife, Linda, of fraudulently transferring interest in their $15 million home in the tony Seattle suburb of Medina; failing to disclose a bank account that contained hundreds of thousands of dollars; and lying about the whereabouts of two huge diamonds valued at $1.4 million, all to conceal those assets from creditors in a bankruptcy proceeding.
It also alleges the couple withdrew more than $760,000 from their secret account to pay for a variety of personal expenses, including payment on their Bentley and Rolls Royce automobiles.
The Mastros vanished 16 months ago, after a judge ordered them to turn over the 27.8- and 15.9-carat diamonds. French police arrested the pair Wednesday in Annecy, a lake town near the Swiss border in southeastern France.
"Those who flaunt the law and ignore our legal process will be held to account," First Assistant U.S. Attorney Annette L. Hayes said in a written statement. "Thanks to the unrelenting efforts of law enforcement both here and abroad, the Mastros have been arrested and will face the charges that the grand jury returned in their indictment today."
Michael Mastro's lawyer, James Frush, said Thursday the charges simply rehash allegations made during the bankruptcy proceeding. And, he suggested, if it was such serious criminal activity, the government could have charged them long ago.
"This is an attempt to criminalize behavior that occurred in this bankruptcy proceeding and that occurs commonly in others," Frush said. "There's a real lack of evidence that this was part of a scheme to defraud."
Frush said of his client: "He got out over his skis in a bad real-estate market and like a lot of other people, went broke. But he's not a criminal."
Frush acknowledged that the Mastros refused to turn over the diamonds in violation of a court order. But he said that's a civil offense, not a criminal one.
The indictment references many false statements the Mastros are accused of making with regard to the diamonds and other assets as part of the bankruptcy.
Mastro was a developer and money lender who oversaw commercial and residential projects worth an estimated $2 billion over a 40-year career. But the market's crash left him short, and three banks forced him into bankruptcy in 2009. He owes more than $200 million to creditors, who are expected to receive just pennies on the dollar.
The Mastros are being held without bail in France, Frush said. He said they will fight extradition to the U.S.
Frush said the Mastros had been living under their own names in Annecy, where they had rented an apartment.
Many of the couple's personal items have been sold at auction to repay Michael Mastro's creditors. Dozens of designer handbags sold for up to $900 apiece, a baby grand piano sold for $17,000, and a Dale Chihuly chandelier sold for $35,000. Their 2007 Bentley convertible went for $92,500.
The 43-count grand jury indictment accuses Michael Mastro and his wife, Linda, of fraudulently transferring interest in their $15 million home in the tony Seattle suburb of Medina; failing to disclose a bank account that contained hundreds of thousands of dollars; and lying about the whereabouts of two huge diamonds valued at $1.4 million, all to conceal those assets from creditors in a bankruptcy proceeding.
It also alleges the couple withdrew more than $760,000 from their secret account to pay for a variety of personal expenses, including payment on their Bentley and Rolls Royce automobiles.
The Mastros vanished 16 months ago, after a judge ordered them to turn over the 27.8- and 15.9-carat diamonds. French police arrested the pair Wednesday in Annecy, a lake town near the Swiss border in southeastern France.
"Those who flaunt the law and ignore our legal process will be held to account," First Assistant U.S. Attorney Annette L. Hayes said in a written statement. "Thanks to the unrelenting efforts of law enforcement both here and abroad, the Mastros have been arrested and will face the charges that the grand jury returned in their indictment today."
Michael Mastro's lawyer, James Frush, said Thursday the charges simply rehash allegations made during the bankruptcy proceeding. And, he suggested, if it was such serious criminal activity, the government could have charged them long ago.
"This is an attempt to criminalize behavior that occurred in this bankruptcy proceeding and that occurs commonly in others," Frush said. "There's a real lack of evidence that this was part of a scheme to defraud."
Frush said of his client: "He got out over his skis in a bad real-estate market and like a lot of other people, went broke. But he's not a criminal."
Frush acknowledged that the Mastros refused to turn over the diamonds in violation of a court order. But he said that's a civil offense, not a criminal one.
The indictment references many false statements the Mastros are accused of making with regard to the diamonds and other assets as part of the bankruptcy.
Mastro was a developer and money lender who oversaw commercial and residential projects worth an estimated $2 billion over a 40-year career. But the market's crash left him short, and three banks forced him into bankruptcy in 2009. He owes more than $200 million to creditors, who are expected to receive just pennies on the dollar.
The Mastros are being held without bail in France, Frush said. He said they will fight extradition to the U.S.
Frush said the Mastros had been living under their own names in Annecy, where they had rented an apartment.
Many of the couple's personal items have been sold at auction to repay Michael Mastro's creditors. Dozens of designer handbags sold for up to $900 apiece, a baby grand piano sold for $17,000, and a Dale Chihuly chandelier sold for $35,000. Their 2007 Bentley convertible went for $92,500.
Glad to see them caught red handed. I'm curious how the insurance fraud investigations have proceeded.Â
"'Those who flaunt the law and ignore our legal process will be held to account,' First Assistant U.S. Attorney Annette L. Hayes"
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Oh really? Then what about "holding to account" all the illegal aliens hiding within our borders, and their quisling U.S. employers who "flaunt" (sic) the law while completely ignoring our Nation's legal process for lawful immigration?Â
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How about getting right on that, Ms. First Assistant U.S. Attorney Annette L. Hayes? There's about 30,000,000 of them infiltrated here so you may want to get cracking.
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Oh and by the way, as Fooey Patooey! said:
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flaunt Verb:
Display (something) ostentatiously, esp. in order to provoke envy or admiration or to show defiance. Dress or behave in a sexually provocative way.
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flout Verb: To show contempt for; scorn: flout a law; behavior that flouted convention.
To be scornful. n. A contemptuous action or remark; an insult.
 @TheTruncheon Shut up.
their $15 million home in the tony Seattle suburb of Medina
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"Tony" suburb? Â Really? Â Great editing.
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At 87 he'll probably die before he ever sees the inside of a prison - sounds like they intend to drag this out as long as possible.
@JusticeSeeker
Actually "tony" is a proper word.
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Tony adjective: marked by an aristocratic or high-toned manner or style
"tony private schools"
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It's usage these days does seem somewhat Archaic, however.
The Bluths.
At 87 he has had a pretty good life until now on someone else's dime. No matter the punishment, it's hard to take that away... I wish we could travel back in time and punish him earlier ;-)
They flaunted the law to be as wealthy as they are and should be shot without a trial because they did. If you flaunt the law you should forfeit any protection it gives.
 @Common-Tater Maybe you should move to China... sounds like you'd like it there. Here in the US, suspects are innocent until proven otherwise... regardless of your circular logic.
And by the way, it's FLOUT, not flaunt, so now you've learned something today.
 @Fooey Patooey! Maybe Ms. First Assistant U.S. Attorney Annette L. Hayes will read your comment and also learn something, since she's the one who used it in the story... unless it was a typo or a mistake by Mr. GENE JOHNSON, who may have misheard her, and used the incorrect word while writing this story.
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We'll probably just never know....