Rolls-Royce Phantom V and Bentley Flying Spur (Photo credit: Wikipedia)

On October 25, 2012, a federal grand jury in Seattle, WA indicted  Michael Mastro, 87, and his wife Linda Mastro, 62, on 43 counts alleging bankruptcy fraud and money laundering. The Mastros were arrested on October 24^th in France following the prior filing of a criminal Complaint, and they are now awaiting extradition.

NOTE: The charges contained in the indictment are only allegations and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law

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The Indictment alleges that between August 2008 and May 2009, as the real estate market plummeted, the Mastros undertook actions to protect their assets from creditors. Among the assets cited by prosecutors were expensive diamond rings, valuable art, and furnishings to a $15 million home in Medina, WA. In furtherance of their efforts to secure their assets, in October 2008, the couple allegedly set up an offshore Belize trust – and then used that trust as the designated “owner” of various limited liability corporations.  The couple transferred certain assets, including diamond rings, Rolls Royce automobile, and their Medina home to the LLCs.

Money Laundering

Following the Mastros’ 2009 bankruptcy, the Indictment alleges 16 counts of money laundering attendant to the couple’s failure to disclose to the bankruptcy court a bank account associated with the LLCs, from which they paid out between July 2009, and July 2010, over $761,000 for

• payments on an American Express credit card;
• car loans for a 2006 Range Rover, a 2007 Bentley Continental, and a 2008 Rolls Royce Phantom Coupe;
• household expenses;
• legal expenses;
• department stores purchases; and
• a bulk gold coin purchase.

Bankruptcy Fraud

In addition to the money laundering allegations, the Indictment charged bankruptcy fraud counts in the in the form of false statements, oaths and declarations. Among the assets that the couple purportedly failed to disclose were a wine collection, Steinway piano, and Chihuly glass artwork.  Further allegations involve Linda Mastro’s claim that a 15.93 carat diamond ring was her personal, pre-marital property – and that diamond and another 27.8 carat ring she claimed to have left with a person outside of the United States although it is alleged that she retained possession of both items of jewelry.