A couple once dubbed “the Bonnie and Clyde of mortgage fraud” were convicted of multiple counts by a federal jury in Las Vegas on Thursday.
The U.S. attorney’s office said that after a 37-day jury trial, Eve Mazzarella, 34, of San Diego, and her estranged husband, Steven Grimm, 48, of Las Vegas, were convicted of one count of conspiracy to commit bank fraud, mail fraud and wire fraud, seven counts of bank fraud, five counts of mail fraud, and two counts of wire fraud.
Prosecutors said the couple, along with others, engaged in a scheme in which Las Vegas housing values were inflated and straw purchasers were used in transactions that defrauded banks and funneled money to the defendants.
Mazzarella, formerly a maid, worked as a Las Vegas real estate broker and Grimm, formerly a truck driver, was a local mortgage broker during the scheme, records show.
Both entered the real estate industry and then cashed in on the Southern Nevada real estate boom before their indictment in 2008. Records show the couple is now separated.
They were described by Bloomberg News in 2008 as a Bonnie and Clyde-type pair in the real estate industry and as “among the greediest of a band of swindlers who took advantage of lax lending standards at profit-hungry banks, which stopped verifying income and assets for even questionable borrowers.”
Straw buyers — individuals who allow residential real estate to be purchased in their names — were paid to participate in the conspiracy, the government said.
After mortgage loans were funded on the homes at issue, Grimm and Mazzarella caused title and escrow companies to disperse a portion of each loan to one of their limited liability companies and caused mortgage brokers, loan officers and others to pay a portion of their commissions and fees to Grimm and Mazzarella, the government said.
Once Grimm and Mazzarella obtained control of a property, they resold the same property to another straw buyer at an inflated price, prosecutors said.
Grimm and Mazzarella engaged in some 432 straw-buyer transactions involving some 227 properties with a total purchase price of more than $107 million, the government said.
Grimm and Mazzarella then defaulted on mortgage payments on many of the loans, which caused the properties to go into foreclosure. At least 143 of the approximately 227 properties purchased by the defendants are in default, causing losses to the banks estimated at more than $24 million, the government said.
“Today’s verdict should send a clear message to all real estate and mortgage professionals who engage in these types of schemes that they will be held responsible for their actions,” Kevin Favreau, special agent in charge of the FBI’s Las Vegas division, said in a statement.
The defendants face numerous lawsuits in Las Vegas and, when they are sentenced, up to 30 years in prison and a fine of up to $1 million on each count. Sentencing is scheduled for March 23 before U.S. District Judge Roger Hunt.
Besides the criminal sentencing and civil lawsuits she faces, Mazzarella filed for bankruptcy on April 13.
She was earning $8,500 per month at that time as a paralegal at her father’s San Diego law firm, Mazzarella Caldarelli LLP.
Also convicted Thursday on the same counts was former loan officer Melissa Beecroft, 32, of Las Vegas.
Eight other defendants — Christina R. Thompson, Amy R. Ortiz, Jyothi Panikkar, Daicy Vargas, Benjamin Labee, Shauna Labee, Craig Christians and Robert Samora — were also charged in the scheme and pleaded guilty to various charges.