How did a Medina couple get away with alleged bank fraud?November 21, 2013 @ 6:02 pm (Updated: 7:38 am - 11/22/13 )
While federal lawyers continue to sell off property worth millions of dollars, seized from Michael and Linda Mastro, the husband and wife from Medina were featured on CNBC's "American Greed," Thursday night.
The Mastros were indicted on 43 counts of bankruptcy fraud and money laundering, but will likely never serve any time for the white collar crimes.
How did this couple - a classic rags-to-riches story - get away with it?
"I learned so many things from him just watching his mannerisms, the way he ate, the way he behaved, the way he dressed, the way he handled business situations," says John Mastandrea, a business associate of Mastro's for 40 years. "He was a very smart man, real disciplined."
Michael Mastro is a Seattle native. He grew up poor, literally digging ditches with his father.
The now 88-year-old real estate developer was in business for 40 years before he retired. He managed apartments and midsize office buildings in the Seattle area.
"He built, owned, developed and sold thousands and thousands of house lots. He built a water park and hotel in Palm Springs, California," says Mastandrea. "He kind of had his hands in everything."
His wife Linda, now in her 60s, went to Roosevelt High and graduated from Central Washington University.
They shared a love of money.
She was working as a bank loan officer when she met Michael, who worked with her at the same bank before he got into real estate development.
Through his real estate deals, they ended up rolling in money.
Diamonds were Linda's best friends. She has a 27-carat, pear-shaped diamond and a 15-carat round diamond.
Together they had a $15 million home in Medina.
The Mastros ran into trouble during the real estate downturn and knew they would be wiped out in 2008, owing about $500 million to family, friends and investors.
Before declaring bankruptcy, they found a law firm that specialized in "asset protection."
With money and cars parked safely, the Mastros declared bankruptcy in 2009. Their case is believed to be the largest personal bankruptcy ever in the state of Washington.
"Mastro did not disclose actually several different bank accounts he had. Mastro did not disclose that he had purchased 100 ounces of gold shortly after the bankruptcy was filed," says James Rigby, a bankruptcy court trustee. "He did not disclose much of anything."
The Mastros moved to France in 2011 and a whole lot of people have been fighting to get their hands on the money they're owed.
Michael and Linda Mastro were charged with bankruptcy fraud and arrested in October of last year.
In December of last year they were released from jail because their health was declining.
The U.S has tried to extradite them twice. Courts in France have refused, citing the couple's declining health.
"It would be inhumane to return him to the United States where he would serve a long prison sentence," Rigby says of the French court's decision.
"So apparently you can steal money from old people but you can't be subject to jail term for having done so."
By LINDA THOMAS
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