Joseph Mazella, Staten Island, New York, has been sentenced for running a $14 million real estate Ponzi scheme.
As previously reported on Mortgage Fraud Blog, Joseph Mazella was the founder and president of the Great Atlantic Group, Inc., a Staten-Island based real estate and financial consulting company. Evidence at the trial proved that Mazella told prospective investors that he would invest their money in real estate projects, including projects in Trenton, New Jersey, a warehouse in Utica, New York, and a golf course in Greene County, New York. Mazella told his victims that their money would be safe and that he would pay them a fixed rate of return.
In exchange for their investment, Mazella issued notes to investors that were supposedly backed by mortgages on the properties and encouraged several investors, typically senior citizens, to apply for reverse mortgages on their residences and to invest the proceeds with him. From approximately January 2007 until approximately December 2010, investors gave Mazella more than $14 million. By January 2007, though, Mazella was operating Great Atlantic as a Ponzi scheme in which he paid returns to investors from existing investors’ deposits or money paid by new investors. Mazella also used investors’ money to pay his personal expenses, including payments for a Porsche, mortgages on his personal residences and family expenses.
“When this defendant needed money to fund his personal lifestyle, he sought out victims from among the elderly. He promised this vulnerable class of victims security and stability. Instead he took many of their life savings and sources of future support to fund his own extravagant lifestyle. Those who engage in this criminal activity will face significant prison sentences,” said United States Attorney Loretta E. Lynch. Ms. Lynch extended her grateful appreciation to the Federal Bureau of Investigation, which led the government’s investigation.
Mazella was sentenced by Chief United States District Judge Carol B. Amon. A federal jury in Brooklyn returned guilty verdicts against Mazella on charges of securities fraud, wire fraud and mail fraud after a three-week trial in February.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
The government’s case was prosecuted by Assistant United States Attorneys John Nowak, Winston Paes and Mary M. Dickman.