A New York jury this week found guilty the defendant in a $14 million Ponzi scheme that included the investments of senior borrowers’ reverse mortgage proceeds. The defendant, Joseph Mazella, 52, faces a maximum sentence of 25 years in prison for the crime.
Mazella, founder and president of the Great Atlantic Group, a Staten-Island based real estate and financial consulting company was found guilty of charges of securities fraud, wire fraud and money laundering. The trial lasted two weeks and included evidence of reverse mortgage proceeds being used in the Ponzi scheme.
“Mazella encouraged several investors, typically senior citizens, to apply for reverse mortgages on their residences and to invest the proceeds with him,” according to court documents. “From approximately January 2007 until approximately December 2010, investors gave Mazella more than $14 million. By January 2007, though, the evidence showed that 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 used some of the proceeds on personal expenses as well.
“The evidence at trial showed that the defendant callously and systematically defrauded his victims of their lives’ savings. Mazella’s victims, many of whom are senior citizens on a fixed income, turned to him to ensure their security in their golden years. Instead, their security was raided to fund his fraud, and they will feel the impact of Mazella’s crimes for the rest of their lives,” said United States Attorney Lynch.
The case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force.
Written by Elizabeth Ecker