| Fear & foreclosure in Las Vegas |
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Page 4 of 7 Assistant US Attorney Brian Pugh says the couple stole a total of $8.7 million. Only $50,000 is left in accounts that the government has found. Grimm and Mazzarella are living in the San Diego area now, after having surrendered their passports. Their trial is scheduled to begin on October 19, 2009.In the past, fraudsters had to forge tax forms and payroll stubs to dupe lenders. Not anymore, says FBI Special Agent Scott Hunter in Las Vegas. Around 2002, banks started making more loans based on information provided by the buyer. Originally, such “stated-income” loans were aimed at the self-employed and non-US citizens whose income was difficult to verify. Then banks started offering them more widely. The era of the liar loan had begun. The no-documentation loans meant less forgery, which made mortgage scams even more attractive, Hunter says. “There’s a lot of money in mortgage fraud, and you can make it very quickly,” Hunter says. Nevada attracts people who are looking to get rich quick, says Gregory Brower, the US attorney for the state. “This is my hometown,” Brower says, in an interview at the gleaming, eight-year-old Lloyd D. George US Courthouse in Las Vegas. “It’s a Mecca for fraud.” Mortgage fraud isn’t confined to Nevada. The US attorney in Oregon won a guilty verdict in November 2007 against Clifford Brigham for using straw buyers to defraud lenders. Georgia’s US attorneys have prosecuted dozens of mortgage fraudsters. Eric Nelson, who auctioned off more than $1 billion of real estate after the 1980s savings and loan crisis, came out of retirement last summer to buy distressed real estate in the Southwest. Fully half of the applications for mortgages he’s examined in Nevada, Arizona and Utah contain false information, he says. “No-verification loans are 100 percent of the problem in the real-estate crisis,” he says. Nelson, 49, knows Mazzarella. She worked as an executive assistant at his company, Eric Nelson Auctioneering Inc. in Las Vegas, for about a year starting in May 2000. She worked hard and demonstrated keen intelligence, he says. “She was as good as they come,” Nelson says. “I encouraged her to go to real-estate school.” Mark Mazzarella is a cofounder of and a senior partner at law firm Mazzarella Caldarelli LLP in San Diego. He’s former chairman of the litigation section of the State Bar of California and has served as a judge pro tem for the San Diego County Superior Court. If what his daughter did is a crime, then thousands of other real-estate speculators committed the same offense, Mark Mazzarella says. “How many people have bought a property and transferred it to a family trust the next day? It’s a very common structure in real estate,” he says. Straw buyers and private corporations aside, the crime in this case is lying on mortgage documents, Mark Mazzarella says. “What this case is going to turn on is if there was false information on the loan applications, and Eve didn’t deal with those at all,” he says. Eve grew up in Seattle, her father says. She and her mother moved there after her parents divorced. Eve got pregnant at about 15 and dropped out of high school. She was ambitious and went on to earn both her high school equivalency and a two-year associate’s degree from a local junior college, her father says. “She did it with little help from Dad,” he says. “All she wanted was for me to pay tuition.” Eve met her first husband, Stephen Lindsay, sometime around 1998 and had a second son at the age of 20. Mazzarella, still using her maiden name, filed for personal bankruptcy in Seattle on June 15, 1998, listing her income as $546 a month from “welfare.” She listed debts of $9,013.50, including $642.55 to Victoria’s Secret and $633.83 to Macy’s. Three months later, Mazzarella started a cleaning service called Pro Maids Inc. north of Seattle, according to her application for a real-estate license filed with the Real Estate Division of the Nevada Department of Business and Industry. Mazzarella, Lindsay and her two children moved to Las Vegas in 2000. She worked as a maid at first, says her father. Soon, she found Eric Nelson’s auction company. Within months, she and Lindsay had split up, and he moved back to Washington, according to an address for him on Mazzarella’s license application. Mazzarella left the auction company in 2001, got her real-estate license and became an agent at Prudential Americana that December, according to her license records. In 2002, she got her bachelor’s degree in business administration and marketing from the University of Nevada, Las Vegas. Mazzarella began selling houses just as the market took off. Prices in Vegas rose 26 percent in the two years starting in December 2001, according to the S&P/Case-Shiller housing price index for Las Vegas. “You’d meet three people in a bar, and two of them would be real-estate agents or mortgage brokers,” says Ryan McPhee, founder of development company RPM & Associates LLC. “Agents could walk in the door, trip over the front step and make a $10,000 commission.” Grimm has been in the real-estate business much longer than Mazzarella. Grant Stolworthy, a Las Vegas paramedic, says Grimm claimed to have years of experience when he helped Stolworthy refinance his house in April 1997. |
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