Skip to main content

Originally published October 24, 2012 at 12:29 PM | Page modified October 26, 2012 at 12:58 PM

  • Share:
  • Comments ((0))
  • Print

Mastro case, from bankruptcy to arrest

Timeline: The Mastro bankruptcy case has been through numerous turns over more than three years.

No comments have been posted to this article.


The Mastro bankruptcy case has been through numerous turns over more than three years.

July 2009: Three banks that loaned Michael Mastro money petition to force him into Chapter 7 bankruptcy involuntarily. After at first resisting, Mastro agrees, initially reporting liabilities of $587 million and assets of $249 million.

October 2009: State regulators accuse Mastro of violating state securities law by misleading individual investors from whom he raised more than $100 million for his real-estate ventures. Mastro later settles, not admitting guilt but agreeing to accept a fine and stop soliciting investors.

February 2010: Mastro retains attorney James Frush, a specialist in white-collar criminal defense, who acknowledges Mastro is the subject of a federal criminal investigation.

April 2010: Mastro agrees to forgo "discharge" of his debts by a bankruptcy judge, meaning creditors can continue to pursue him.

May 2010: Credit-card and checking-account statements obtained by court-appointed bankruptcy trustee James Rigby reveal Mastro and his wife, Linda, continue to live lavishly in bankruptcy — trips to Europe, meals in expensive restaurants, payments on a Rolls-Royce and Bentley. Rigby says Mastro is hiding assets from creditors; Frush denies it.

September 2010: The Mastros move out of their Medina waterfront mansion. Rigby sells the 7,000-square-foot house for $9.1 million.

February 2011: Mastro falls off a ladder at the house he is renting in Palm Desert, Calif., suffering severe head injuries that a doctor says incapacitate him. A court-appointed guardian, former state Supreme Court Justice Faith Ireland, represents his interests in court for several weeks while he recovers.

April 2011: Mastro accepts judgment that he owes creditors $7.1 million stemming from allegedly fraudulent transactions.

June 2011: Reversing another judge's ruling, Bankruptcy Judge Marc Barreca orders the Mastros to turn over two enormous diamond rings for safekeeping until their rightful owner is decided (he later rules they belong to creditors represented by Rigby). The Mastros fail to comply, move out of their Palm Desert home and disappear. They become fugitives in July, when Barreca issues arrest warrants. A U.S. marshal later says they were last traced to a vacant apartment in Canada.

September 2011: In a civil suit brought by Rigby, Barreca finds that Mastro, anticipating bankruptcy, engineered a series of transactions designed to put assets — including the rings and Medina mansion — out of most creditors' reach.

January 2012: In Palm Desert, Rigby auctions off the Mastros' Bentley and household goods, including a Chihuly chandelier, a Steinway baby grand piano, 56 designer handbags and 65 pairs of high heels. He nets $341,000.

February 2012: Barreca approves distribution of $2.8 million — a penny on the dollar — to Mastro's unsecured creditors. Rigby's legal and other bills through April — also paid from recovered assets — total $7.8 million.

October 2012: Mastros arrested in France.

— Eric Pryne

News where, when and how you want it

Email Icon

Relive the magic

Relive the magic

Shop for unique souvenirs highlighting great sports moments in Seattle history.



NDN Video