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Real Estate Mogul's Bankruptcy Fraught With Accusations Of Fraud

Posted By admin || 31-Jul-2010

Real Estate Mogul's Bankruptcy Fraught With Accusations Of FraudBankruptcy Trustee James Rigby says he smells a rat and can't figure out how it is that real estate mogul Michael R. Mastro is able to continue his lavish lifestyle while in bankruptcy.  Last September Mastro and his wife vacationed in Italy the very same month that he filed bankruptcy papers revealing that he was hundreds of millions of dollars in debt; but the vacations and lavish spending didn't stop there.  There were subsequent vacations in Paris, New York, Palm Springs and payments of $8,000 a month on a Rolls-Royce and a Bentley.  The bankruptcy trustee suspects that the real estate magnate is hiding assets and his creditors agree.  Already, Mastro has been found guilty of illegally transferring assets to his son.  The bankruptcy trustee obtained a $362,000 judgment against Mastro's son which is being satisfied by the sale of 10,000 one-ounce silver coins which were found in a basement wall behind a furnace vent in the younger Maestro's home.  But despite this finding, Mastro's attorneys have insisted that there is no wrong doing in the bankruptcy case.

The Mastros' lifestyle remains lavish by most standards, admits James Frush, one of Mastro's lawyers - "but that's not a crime."

The money his client is spending doesn't come from Swiss bank accounts, Frush said. It's money from friends, his wife's separate assets, and hundreds of thousands he has earned as a real-estate consultant since entering bankruptcy - income to which his creditors have no claim.

But the bankruptcy trustee and creditors are not buying it.  They want to know how Mastro is able to continue his lavish lawsuit and 11 lawsuits have been filed to find and seize assets that Mastro is accused of hiding.  A bankruptcy discharge has already been denied for the real estate mogul, which means that creditors will be able to still pursue Mastro for payment even after the bankruptcy case is closed.

Categories: Bankruptcy Fraud
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