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Michael Mastro

From Wikipedia, the free encyclopedia
This article is about the real estate developer and accused criminal. For the actor, seeMichael Mastro (actor).

Michael R. Mastro(born June 1, 1925)[1]is an American real estate developer, who was in business for forty years managing apartments and mid-size office parks inSeattle.[2]He declaredbankruptcyin 2009. Mastro and his wife, Linda, a formerBellevuegrade schoolteacher,[3]fled toFrancein 2011 after a warrant was issued for their arrest due to their failure to comply with a judge’s order that they turn over two diamond rings valued at $1.4 million to their creditors.[1][4]They were arrested in 2012 inLake Annecy,in theFrench Alps,and facedextraditionhearings, after which it was revealed that the prior August, the U.S. Attorney’s Office had filed an initially sealed criminal complaint charging them with bankruptcy fraud.[1][5][6]The day after being arrested in France, the Mastros wereindictedby an Americanfederal grand juryon forty-three counts ofbankruptcy fraudandmoney laundering.[7]After several months ofhouse arrest,they were freed in June 2013 after a French court denied a request for their extradition back to the United States, finding that while they stole the life savings of elderly people, they themselves were too elderly to (potentially) be incarcerated.[8]

Mastro's bankruptcy has been described as the largestpersonal bankruptcyin the history ofState of Washington.[9]Prior to the bankruptcy, the Mastros moved many of their assets, including a $15 million home inMedina, Washington,into an irrevocable trust based inBelize.[10]

Biography

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Michael Mastro started his career in the real estate business in 1967, developing real estate projects worth at least $2 billion over 40 years, including commercial buildings and houses. He was involved inhard money loans,mostly to desperate real estate developers, with second or thirddeeds of truston projects as collateral.[11]His company, Michael R. Mastro Properties, was well known in and around Seattle, the location of most of its projects and properties. The company's developments includeVancouver's Town Plaza,[12]originally called the Tower Mall,[13]theOasis water park(sold in 2001[14]) in Palm Springs, Allison Park Apartments[15]inDes Moines,and Ballard Lofts[16]in Seattle.

In 1974, Mastro metdivorceeLinda Ann Gale (b. 1949[3]) in the Peoples Bank branch where they both worked, she as aloan officer,he asbranch manager.[17]They were married on June 3, 1989.[18]

In 1989, Mastro sold office buildings, which he had developed with a partner, toBoeingfor $211 million. In the early 2000s, Mastro started buying raw land for the development of residential housing.[19]

Bankruptcy

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Mastro was forced into involuntary bankruptcy[20]in July 2009 and filed forChapter 7.On September 9, 2009, he listed assets in excess of $249 million and liabilities of over $586 million in a filing with theU.S. Bankruptcy Courtfor the Western District of Washington.[18]

In May 2010, a ruling was handed down by bankruptcy judge Samuel Steiner that two diamond rings valued at $1.4 million were not available to creditors since they belonged to Linda Mastro.[21]

In February 2011, Mastro suffered a head injury while residing inPalm Desert.He was hospitalized for two weeks and underwentbrain surgery.[22]

In June 2011, a judge ordered Michael and Linda Mastro to hand over the two diamond rings.[1]

In May 2013, it was reported that the bankruptcy trustee, James Rigby, had filed an 82-page report that valued all of the jewelry seized from the Mastros at $3 million.[23]

Mastro's bankruptcy is believed to be the largest personal bankruptcy ever in the state of Washington.[1]

Bankruptcy fraud and money laundering

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The couple did not comply with the judge's order to hand over the diamond rings and disappeared in June 2011.[24]In August 2011, asealed[1]criminal complaint was filed against Michael and Linda Mastro, charging them with bankruptcy fraud.[25]After warrants for contempt of court (acivil violation[1]) were issued for their arrest, they were apprehended and taken into custody in France on October 24, 2012.[24]

On October 25, 2012, one day after being arrested in France, the Mastros wereindictedby afederal grand juryon forty-three counts ofbankruptcy fraudandmoney laundering.[7]They were accused of hiding assets from creditors.[26]The couple remained in custody inChambéryafter a hearing held on November 7, 2012.[27]A panel of three French judges rejected the couple's plea, based on their age and poor health, for a conditional release. The court felt that the charges against them for bankruptcy fraud and money laundering were serious enough to keep them in jail until such time as the US filed for extradition. Prior to their arrest, the Mastros were pursued by both theFBIandU.S. marshalsfor sixteen months.[28]

On November 15, 2012, theSeattle Timesreported that the two diamond rings were in French authorities' possession. According to Thomas Terrier, the Mastros' French lawyer, the rings were in a safe deposit box inAnnecy.[29]

On December 12, 2012, theSeattle Timesreported that Michael and Linda Mastro had been released from jail after beingincarceratedfor seven weeks. A three-judge panel had ruled that their health was suffering. They were to wear electronic monitoring devices and were free to walk around Annecy.

By December 12, 2012, the United States had not filed for extradition, which according to James Rigby, the United States court-appointedbankruptcy trustee,had to be filed by December 26, 2012.[30]

Attempted extradition from France to the United States

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On February 23, 2013, theSeattle Timesreported that theCourt of AppealsinChambery, France,had ruled that the Mastros could not be extradited to the United States unless American authorities guaranteed that the couple would not face any sanctions other than electronic surveillance. The extradition treaty between France and the United States allows France to deny extradition when the extradited party faces serious consequences related to health or age. Michael Mastro and his wife had been wearing surveillance devices but were freed after spending seven weeks in a French jail.[31]

On June 5, 2013, the Court of Appeals of Chambéry denied the extradition of Michael and Linda Mastro fromFranceto theUnited States,basing this decision on Michael Mastro's age (88), poor health, and daily dependence on his wife.[1][32]The appeal had been filed by theU.S. Department of Justice.[33]The United States' request that the case be sent to theFrench Supreme Courtwas turned down by French prosecutors, who found no grounds for appeal.[1]As a result, the couple are no longer prevented from leaving their home in the evenings.[34]

Movement of Mastros after financial problems surfaced

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Before their bankruptcy, the Mastros lived in a large waterfront house inMedina,a city in the Seattle metropolitan area. They moved toCaliforniain 2010. In 2011, they started a journey that began at Mr. Mastro's sister's house in Seattle, continued toToronto, Ontario,Canada, and, according to investigators at Focus Ltd., ended in a €5,000 per month house inVeyrier-du-Lac,France, on the eastern shore ofLake Annecy.[35]They then moved toSaint-Marceau, France,where the Mastros were arrested in 2012.[36]

[edit]

Tom Hazelrigg is a long-time business associate of Michael Mastro who was forced into bankruptcy by James Rigby and two other creditors in February 2012. On December 14, 2012, Judge Timothy Dore denied Hazelrigg a discharge of his debt. Hazelrigg owed Mastro $76 million.[37]In March 2015, he was sentenced to four and a half years in prison fortax evasion.[38][39]

Controversy surrounding sale of Mastro's Medina home

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In November 2012, Judge Marc Barreca denied Jack Dorssers, a former business associate of Mastro, a share in the $8.36 million proceeds from the sale of Mastro's Medina, Washington, home. The judge ruled that Dorssers' contention that Mastro had put up the house ascollateralin 2009 for a $1.2 million loan was ashamdesigned to keep the house out of reach of othercreditors.Dorsser is appealing Barreca's decision.[40]

Appeal

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On September 9, 2014, Rami Grunbaum of theSeattle Timeswrote that a federal appeals court in San Francisco had ruled that Linda Mastro was entitled to appeal the bankruptcy court's ruling about her assets.[41]

See also

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References

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  1. ^abcdefghi"Mastros defend their actions, plan to 'retire in peace'".The Seattle Times.Archived fromthe originalon 2021-03-05.Retrieved2024-01-29.
  2. ^Brown, Eliot (2011-09-21)."THE PROPERTY REPORT: Creditors Seek Missing Developer - WSJ".Online.wsj.Retrieved2012-11-29.
  3. ^ab"How to Go Bankrupt, the Millionaire's Way!".Seattle Weekly.Archived fromthe originalon 2018-07-15.Retrieved2018-07-14.
  4. ^"French judge spares Seattle couple from extradition".Q13 FOX News.2013-06-06.Retrieved2018-07-14.
  5. ^"Fugitive Seattle real-estate developer, wife arrested in France now face 43-count indictment".Archived fromthe originalon 7 May 2019.Retrieved28 October2012.
  6. ^Pryne, Eric."Mastros' $1.4M diamonds now reportedly in France | Business & Technology".The Seattle Times.Retrieved2012-11-29.
  7. ^abBill Singer (2012-04-18)."Rolls Royce, Diamonds, Gold Coins, Wines Cited In Couple's Bankruptcy Fraud".Forbes.Retrieved2012-11-29.
  8. ^"Diamonds Aren't Forever; Cover Your Assets".American Greed: The Fugitives.Season 1. Episode 13. Kurtis Productions. 2013-11-21.CNBC.
  9. ^Sanjay, Bhatt (2013-11-20)."Mastro story featured on CNBC's 'American Greed'".The Seattle Times.Retrieved2017-06-05.
  10. ^Buhain, Venice (2012-10-26)."Michael and Linda Mastro Accused of Stashing Assets in Belize Off-Shore Trust".Bellevue Patch.Retrieved2017-06-05.
  11. ^James F. Rigby, Jr., Trustee, solely in his capacity as Chapter 7 trustee of the bankruptcy estate of Michael R. Mastro, Plaintiff,v.Michael R. Mastro and Linda A. Mastro, and their marital community; Michael K. Mastro and Jane Doe Mastro, and their marital community; LCY, LLC, a Delaware limited liability corporation; LCY, LLC–Series Home; LCY, LLC–Series Jewelry; LCY, LLC–Series Automobiles; The LCY Trust; Compass Trust Corporation, a purported Belizean entity; Compass S.A.; Mastro Revocable Living Trust; Mastro Irrevocable Trust; Concept Dorssers, a purported Monaco company; Hendrik J. Dorssers; and Avatar Income Fund I LLC, a Delaware limited liability company, Defendants.(Bkrtcy.W.D.Wash. September 27, 2011),Text.
  12. ^Anderson, Julia (June 21, 1999)."DRIVERS LICENSING OFFICE TO GO INTO TOWN PLAZA".The Columbian.McClatchy-Tribune Information Services. Archived fromthe originalon March 28, 2015.
  13. ^Gardner, Steven (January 22, 2001)."TOWN PLAZA TO GET $1.5 MILLION MAKEOVER".The Columbian.McClatchy-Tribune Information Services. Archived fromthe originalon March 28, 2015.
  14. ^"DOWNTOWN RENTON GETS MORE LUXURY HOUSING".Seattle-Post Intelligencer.Hearst Communications Inc. July 5, 2001. Archived fromthe originalon January 25, 2013.
  15. ^Taus, Margaret (September 6, 2001)."JUDGE LETS LANDLORD GO, BUT TROUBLE ISN'T OVER COURT DEADLINE FOR APARTMENT REPAIRS CAME AND WENT $25,000 FINE POSSIBLE".Seattle-Post Intelligencer.Hearst Communications Inc. Archived fromthe originalon January 25, 2013.
  16. ^Mulady, Kathy (June 1, 2000)."A DAVID VS. GOLIATH BREW-HAHA JAVA JAHN FIGHTS BIG NAMES FOR BUILDING'S CAFE".Seattle-Post Intelligencer.Hearst Communications Inc. Archived fromthe originalon January 25, 2013.RetrievedDec 6,2012.
  17. ^"How to Go Bankrupt, the Millionaire's Way!".Archived fromthe originalon 2016-03-02.
  18. ^abhttp:// assetsearchblog /files/2012/11/Mastro-indictment.pdf[bare URL PDF]
  19. ^"The ritual: Father and son, Mastros share lunches and profits".
  20. ^Jay Adkisson (2012-04-18)."The Washington Woes Of Michael Mastro And Friends".Forbes.Retrieved2012-11-29.
  21. ^Frank, Robert (2010-07-19)."Michael Mastro Is Living Large in Bankruptcy - The Wealth Report - WSJ".Blogs.wsj.Retrieved2012-11-29.
  22. ^"Mastro's mental competency could be an issue in French court this week, lawyer says".Puget Sound Business Journal.Bizjournals. 2012-11-05.Retrieved2012-11-29.
  23. ^Bhatt, Sanjay."Seized Mastro jewelry valued at $3 million".The Seattle Times.
  24. ^abPryne, Eric (2012-11-09)."Mastros to remained in a French jail after judges refuse appeal | Business & Technology".The Seattle Times.Retrieved2012-11-29.
  25. ^"French court denies extradition request for former Seattle real estate investor".The Oregonian.2013-06-05.
  26. ^Pulkkinen, Levi (2012-10-25)."Captured Medina developer Mastro, wife indicted".seattlepi.Retrieved2012-11-29.
  27. ^Kepes, Laure."Lawyer seeks no jail for Mastro | Business & Technology".The Seattle Times.Retrieved2012-11-29.
  28. ^"Mastros must remain in jail, French court rules - Puget Sound Business Journal".Bizjournals. 2012-11-09.Retrieved2012-11-29.
  29. ^Pryne, Eric (2012-11-15)."Mastros' $1.4 million diamond rings recovered, attorney says | Business & Technology".The Seattle Times.Retrieved2012-11-29.
  30. ^Pryne, Eric."Mastros freed from French jail".The Seattle Times.
  31. ^Pryne, Eric."French court: Mastros can't be extradited if there's jail ahead in U.S."The Seattle Times.
  32. ^"La cour d'appel de Chambéry refuse l'extradition du couple Mastro vers les États-Unis".France 3 Auvergne-Rhône-Alpes.5 June 2013.
  33. ^"The Seattle Times | Local news, sports, business, politics, entertainment, travel, restaurants and opinion for Seattle and the Pacific Northwest".
  34. ^"French Court Declines to Extradite Michael and Linda Mastro".5 June 2013.
  35. ^Goodley, Simon (2013-06-23)."On the trail of Michael Mastro: how to flee the law when you are 87".The Guardian.London.
  36. ^Pryne, Eric."Fugitive Mastro and wife arrested in France".The Seattle Times.
  37. ^"Mastro creditor Hazelrigg loses round in court".
  38. ^"Mastro pal Hazelrigg gets 4.5-year sentence for tax evasion".The Seattle Times.19 March 2015.
  39. ^"Mastro associate Tom Hazelrigg III appeals prison sentence for tax evasion - Puget Sound Business Journal".Archived fromthe originalon 2015-04-26.
  40. ^Pryne, Eric."Mastro associate appeals bankruptcy ruling on mansion".The Seattle Times.
  41. ^Grunbaum, Rami."Mastro case gets new life in court".The Seattle Times.
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