A Staten Island, New-York man was sentenced this month to 10 years in prison for his participation in a reverse mortgage Ponzi scheme.
Joseph Mazella, who was sentenced in Brooklyn federal court June 15 was found guilty this year of conducting a reverse mortgage Ponzi scheme that defrauded investors for $14 million, according to the Eastern District of New York U.S. Attorney’s Office.
In the scheme, Mazella told victims their money would be safe and they would be paid a fixed rate of return on their investment, through notes issued to investors that were supposedly backed by mortgages. Some investors were encouraged to apply for reverse mortgages and invest the proceeds in the scheme, which ran from January 2007 through December 2010. Mazella ran the operation through Staten Island-based Great Atlantic Group, Inc.
“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 Lynch.
The case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force.
Written by Elizabeth Ecker