Michael Mastro

From Wikipedia, the free encyclopedia
Jump to: navigation, search

Michael R. Mastro (born June 1, 1925[1]), is a former American real estate developer who was in business for forty years managing apartments and midsize office parks in Seattle.[2] He declared bankruptcy in 2009. Mastro and his wife, Linda, a former Bellevue grade school teacher,[3] moved to France in 2011.[4] They were arrested in Lake Annecy of the French Alps in 2012 where they faced extradition hearings.[5][6] After several months of house arrest, they were freed in June 2013, by a French court that denied extradition back to the United States.

Mastro’s bankruptcy has been described as the largest personal bankruptcy in the history of Washington state.[7] Prior to the bankruptcy, the Mastros' moved many of their assets, including a $15 million home in Medina, into an Irrevocable Trust in Belize.[8]


Michael Mastro has been in the real estate business since 1967. He has developed real estate projects worth at least $2 billion over 40 years, including commercial buildings and houses. He was involved in hard money loans, mostly to desperate real estate developers, with second or third deeds of trust on the project as collateral.[9] His company, Michael R. Mastro Properties, is well known in and around Seattle, the location of most of its projects and properties. The company's developments include Vancouver's Town Plaza,[10] originally called the Tower Mall,[11] the Oasis waterpark (sold in 2001[12]) in Palm Springs, Allison Park Apartments[13] in Des Moines and Ballard Lofts[14] in Seattle.

In 1974, Michael Mastro met divorcee Linda Ann Gale(b. 1949) in the Peoples Bank where they both worked, she as loans officer, he as branch manager.[15] They were married on June 3, 1989.[16]

In 1989 Mastro sold office buildings which he developed with a partner to Boeing for $211 million. In the early 2000s Mastro started buying raw land for development of residential housing.[17]


Mastro was forced into involuntary bankruptcy [18] in July 2009, and filed for Chapter 7. On September 9, 2009, he listed assets in excess of $249 million and liabilities of over $586 million in a filing with the U.S. Bankruptcy Court for the Western District of Washington.[16]

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.[19]

In February, 2011, Michael Mastro suffered a head injury while residing in Palm Desert. He was hospitalized for two weeks and underwent brain surgery.[20]

June 2011 a judge ordered Michael and Linda Mastro to hand over two diamond rings owned by Mrs. Mastro. [21]

In May 2013 it was reported that the bankruptcy trustee, James Rigby, had filed an 82-page report which valued of all jewelry seized from the Mastros at $3 million.[22]

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

Bankruptcy fraud and money laundering[edit]

The couple did not comply with the judge's order to hand over the diamond rings and disappeared in June 2011.[23] In August 2011 a sealed[1] criminal complaint was filed against Michael Mastro and his wife Linda charging them with bankruptcy fraud.[24] After warrants for contempt of court (civil violation[1]) were issued for their arrest they were apprehended and taken into custody in France on October 24, 2012.[23]

On October 25, 2012, a day after being arrested in France, Mastro and his wife, Linda were indicted by a federal grand jury on forty three counts of bankruptcy fraud and money laundering.[25] They were accused of hiding assets from creditors. [26] They remained in custody in Chambéry after their hearing held on Nov 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 files for extradition. Prior to their arrest the Mastro's were pursued by both the FBI and U.S. marshals for sixteen months.[28]

On Nov 15, 2012, the Seattle Times reported that the two diamond rings were in French authorities' possession. According to Thomas Terrier, the Masto’s French lawyer, the rings were in a safety box in Annecy. [29]

On December 12, 2012 the Seattle Times reported that Michael and Linda Mastro had been released from jail after being incarcerated for seven weeks. A three judge panel 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-appointed bankruptcy trustee, must be filed by December 26, 2012.[30]

Extradition from France to the United States[edit]

On February 23, 2013 the Seattle Times reported that the Court of Appeals in Chambery, France ruled that the Mastros cannot be extradited to the United States unless American authorities guarantee that the couple will 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. Eighty-seven-year-old Michael Mastro and his wife have been wearing surveillance devices but were free to walk in Annecy, France after spending seven weeks in a French jail. [31]

On June 5, 2013, La cour d'appel de Chambéry denied the extradition of Michael and Linda Mastro from France to the United States basing this decision on Michael Mastro’s age (88), poor health, and daily dependence on his wife.[1][32] The appeal was filed by the U.S. Department of Justice.[33] The United States request that the case be taken to the French Supreme Court was turned down by French prosecutors who found no grounds for appeal.[1] As a result, the couple no longer is prevented from leaving their home in the evenings.[34]

Movement of Mastros after financial problems surfaced[edit]

Before their bankruptcy the Mastros lived in a large waterfront house in Medina, a city in the Seattle metropolitan area. They moved to California in 2010. In 2011 they started a journey that began at Mr. Mastro’s sister's house in Seattle, went on to Toronto, Canada and according to investigators Focus Ltd. ended in a €5,000 per month house in Veyrier-du-Lac, France, on the eastern shore of Lake Annecy.[35] Then they moved to Marceau, France where the Mastros were arrested in 2012.[36]

Related bankruptcy of Tom Hazelrigg III[edit]

Tom Hazelrigg is a longtime 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 for tax evasion. [38][39]

Controversy surrounding sale of Mastro’s Medina home[edit]

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 the contention that Mastro had put up the house as collateral in 2009 for a $1.2 million loan was a sham designed to keep the house away from the reach of other Mastro creditors. Jack Dorsser is appealing Basrreca’s decision.[40]


On September 9, 2014 Rami Grunbaum of the Seattle Times wrote that a federal appeals court in San Francisco ruled that Linda Mastro is entitled to appeal the bankruptcy court ruling about her assets. [41]

See also[edit]


  1. ^ a b c d e f http://seattletimes.com/html/businesstechnology/2021208987_mastroxml.html
  2. ^ Brown, Eliot (2011-09-21). "THE PROPERTY REPORT: Creditors Seek Missing Developer - WSJ.com". Online.wsj.com. Retrieved 2012-11-29. 
  3. ^ http://www.seattleweekly.com/home/948284-129/mastro-linda-mastros-mike-million-creditors
  4. ^ http://q13fox.com/2013/06/05/french-judge-spares-seattle-couple-from-extradition/#axzz2VX9FQuzJ
  5. ^ "Fugitive Seattle real-estate developer, wife arrested in France now face 43-count indictment". Retrieved 28 October 2012. [dead link]
  6. ^ Pryne, Eric. "Mastros’ $1.4M diamonds now reportedly in France | Business & Technology". The Seattle Times. Retrieved 2012-11-29. 
  7. ^ Sanjay, Bhatt (2013-11-20). "Mastro story featured on CNBC’s ‘American Greed’". The Seattle Times. Retrieved 2017-06-05. 
  8. ^ Buhain, Venice (2012-10-26). "Michael and Linda Mastro Accused of Stashing Assets in Belize Off-Shore Trust". Bellevue Patch. Retrieved 2017-06-05. 
  9. ^ 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. Sept. 27, 2011). Text
  10. ^ Anderson, Julia (June 21, 1999). "DRIVERS LICENSING OFFICE TO GO INTO TOWN PLAZA". The Columbian. McClatchy-Tribune Information Services.  – via HighBeam Research (subscription required)
  11. ^ Gardner, Steven (January 22, 2001). "TOWN PLAZA TO GET $1.5 MILLION MAKEOVER". The Columbian. McClatchy-Tribune Information Services – via HighBeam. (Subscription required (help)). 
  12. ^ "DOWNTOWN RENTON GETS MORE LUXURY HOUSING". Seattle-Post Intelligencer. Hearst Communications Inc. July 5, 2001.  – via HighBeam Research (subscription required)
  13. ^ 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.  – via HighBeam Research (subscription required)
  14. ^ 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. Retrieved Dec 6, 2012 – via HighBeam. (Subscription required (help)). 
  15. ^ http://www.seattleweekly.com/home/948284-129/mastro-linda-mastros-mike-million-creditors
  16. ^ a b http://www.assetsearchblog.com/files/2012/11/Mastro-indictment.pdf
  17. ^ "The ritual: Father and son, Mastros share lunches and profits". 
  18. ^ Jay Adkisson (2012-04-18). "The Washington Woes Of Michael Mastro And Friends". Forbes. Retrieved 2012-11-29. 
  19. ^ Frank, Robert (2010-07-19). "Michael Mastro Is Living Large in Bankruptcy - The Wealth Report - WSJ". Blogs.wsj.com. Retrieved 2012-11-29. 
  20. ^ "Mastro's mental competency could be an issue in French court this week, lawyer says - Puget Sound Business Journal". Bizjournals.com. 2012-11-05. Retrieved 2012-11-29. 
  21. ^ Zennie, Michael (2012-10-26). "Bankrupt real estate magnate and wife arrested in France one year after skipping out on $250M debts and refusing to hand over $1.4M diamond rings". Daily Mail. London. Retrieved 28 October 2012. 
  22. ^ http://seattletimes.com/html/businesstechnology/2020997737_mastrobankruptcyxml.html
  23. ^ a b Pryne, Eric (2012-11-09). "Mastros to remained in a French jail after judges refuse appeal | Business & Technology". The Seattle Times. Retrieved 2012-11-29. 
  24. ^ "French court denies extradition request for former Seattle real estate investor". The Oregonian. 2013-06-05. 
  25. ^ Bill Singer (2012-04-18). "Rolls Royce, Diamonds, Gold Coins, Wines Cited In Couple's Bankruptcy Fraud". Forbes. Retrieved 2012-11-29. 
  26. ^ Pulkkinen, Levi (2012-10-25). "Captured Medina developer Mastro, wife indicted". seattlepi.com. Retrieved 2012-11-29. 
  27. ^ Kepes, Laure. "Lawyer seeks no jail for Mastro | Business & Technology". The Seattle Times. Retrieved 2012-11-29. 
  28. ^ "Mastros must remain in jail, French court rules - Puget Sound Business Journal". Bizjournals.com. 2012-11-09. Retrieved 2012-11-29. 
  29. ^ Pryne, Eric (2012-11-15). "Mastros’ $1.4 million diamond rings recovered, attorney says | Business & Technology". The Seattle Times. Retrieved 2012-11-29. 
  30. ^ http://seattletimes.com/html/businesstechnology/2019888639_mastrosreleasedxml.html
  31. ^ http://seattletimes.com/html/businesstechnology/2020411359_mastrohearingxml.html
  32. ^ http://alpes.france3.fr/2013/06/05/la-cour-d-appel-de-chambery-refuse-l-extradition-du-couple-mastro-vers-les-etats-unis-264417.html.
  33. ^ http://seattletimes.com/html/businesstechnology/2021123625_mastrofreedxml.html
  34. ^ http://bellevue.patch.com/groups/police-and-fire/p/french-court-declines-to-extradite-michael-and-linda-mastro
  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. ^ http://seattletimes.com/html/businesstechnology/2019510730_mastro25.html
  37. ^ "Mastro creditor Hazelrigg loses round in court". 
  38. ^ http://www.seattletimes.com/business/real-estate/hazelrigg-gets-45-year-sentence-for-tax-evasion/
  39. ^ http://www.bizjournals.com/seattle/morning_call/2015/03/mastro-associate-tom-hazelrigg-iii-appeals-prison.html
  40. ^ http://seattletimes.com/html/businesstechnology/2016599610_dorssers25.html
  41. ^ http://seattletimes.com/html/businesstechnology/2024500625_mastrobankruptcyxml.html