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Elderly Seattle Developer and Wife Arrested in France

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SEATTLE (AP) — An elderly, bankrupt Seattle real-estate developer who vanished with his wife after a judge demanded they hand over two huge diamonds was arrested Wednesday in a lake town in the French Alps.

Police arrested Michael Mastro, 87, and his wife, Linda, at the request of American authorities, said Kayla Celaya, a supervisory deputy with the U.S. Marshals Service. The arrests came in the town of Annecy, near the Swiss border in southeastern France.

The Mastros were charged in a six-count FBI complaint for bankruptcy fraud unsealed Wednesday in federal court in Seattle. The complaint accuses them of concealing one of their bank accounts from creditors, and using $285,000 from the account for personal expenses — including payments on their Bentley and Roll Royce automobiles, credit card bills, and the purchase of $100,000 in gold.

“It’s a great day for the Mastro bankruptcy estate,” said Jim Rigby, the trustee overseeing the estate. “It just not right he’s living in the Ritz in Europe when other people have been forced out of their homes. The money he was living on belonged to those creditors.”

Mastro attorney James Frush did not immediately return a call seeking comment.

Mastro was a developer and money lender who oversaw more than $1 billion in projects during the real estate boom last decade. But the market’s crash left him short, and three of his creditors forced him into bankruptcy in 2009. He owes more than $200 million to creditors, who are expected to receive just pennies on the dollar.

The couple disappeared 16 months ago after a judge ordered them to turn over two of Linda Mastro’s rings. With diamonds of 27.8 and 15.9 carats, they’re worth an estimated total of $1.4 million.

The criminal complaint made no mention of the diamonds, and it remains unclear where they are. Rigby says he hopes the Mastros bring them when they return from France.

Many of the couple’s personal items have been sold at auction to repay Michael Mastro’s creditors. Dozens of designer handbags sold for up to $900 apiece; a baby grand piano sold for $17,000; and a Dale Chihuly chandelier sold for $35,000. Their 2007 Bentley convertible went for $92,500.

The Marshals Service says that if the Mastros fight extradition, it could take months or years for them to be returned to the U.S.

– Copyright 2012 The Associated Press.

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