A widely covered Ponzi scheme arrest in Staten Island, N.Y. involved reverse mortgages as one of its several alleged illegal operations.
The alleged scheme, estimated to be valued at $12 million, lasted from 2007 to 2010 and its operator has been charged with securities fraud, wire fraud and money laundering in a federal indictment.
The company behind the alleged Ponzi scheme was a real estate and financial consulting company, which allegedly encouraged some investors to obtain mortgages and invest the proceeds into two separate companies. According to the Federal Bureau of Investigation, some senior investors were encouraged to do the same with reverse mortgages, never seeing a return on the investments.
“Perhaps the most egregious aspect of this case is that the defendant allegedly encouraged victims, some senior citizens, to obtain mortgages on their homes and to invest the proceeds in what the indictment charges was nothing more than a Ponzi scheme,” stated United States Attorney Loretta Lynch. “We will aggressively investigate and prosecute those who perpetrate these crimes.”
If convicted, for each count count of fraud and money laundering, Mazella faces a maximum 20 years’ imprisonment, according to the FBI.
View the FBI’s report on the alleged Ponzi scheme.
Written by Elizabeth Ecker
