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Updated Monday, February 4, 2013 at 07:46 PM

Seized Mastro jewels cover a table top

By Eric Pryne
Seattle Times business reporter

Between 75 and 200 pieces of jewelry seized after fugitive former real-estate magnate Michael R. Mastro and his wife, Linda, were arrested in France have been returned to Seattle or are on their way back, according to the court-appointed trustee in Mastro’s massive bankruptcy case.

The jewels are in the FBI’s possession, James Rigby said Monday. But he said he got a look last week at the pieces — packaged in evidence bags — that have been returned so far, and they covered a large table.

“It’s hard to describe the emotional impact of seeing a table covered with bags full of diamonds and rubies and emeralds and pearls,” Rigby said. “The amount of wealth it represented was just phenomenal.”

The collection is worth at least $3 million, he estimated.

Rigby asked a bankruptcy judge Monday for permission to hire a jeweler to catalog and appraise the jewelry so he can market it for sale.

But he acknowledged the Mastros could resist.

Michael and Linda Mastro disappeared in June 2011 after failing to comply with a bankruptcy judge’s order that they turn over two giant diamond rings valued at $1.4 million, pieces the judge later ruled belong to Michael Mastro’s many creditors.

The couple were arrested last October near Lake Annecy in the French Alps. A federal grand jury in Seattle has indicted them on 43 counts of bankruptcy fraud and money laundering.

They remain in France while U.S. authorities seek to extradite them. A hearing was held last week, Rigby said, and another is scheduled later this month.

The jewelry was recovered from the Mastros’ French apartment, items they took with them to jail, and two safe-deposit boxes, the trustee said. Among the pieces: the two big diamonds — one 27.8 carats, the other 15.93 — were associated with the Mastros’ disappearance.

The trustee said in November after a trip to France that the recovered jewels probably would result in more money for Mastros’ creditors.

Selling them could be complicated, however.

Linda Mastro has appealed the ruling that creditors own the two big diamond rings, contending they are her separate property.

And James Frush, Michael Mastro’s lawyer, said in November that other items seized in France also could also be her separate property, or gifts, or items seized after Mastro was forced into bankruptcy in 2009.

Frush was not immediately available for comment Monday.

Mastro, 87, a longtime and prolific Seattle real-estate developer and lender, saw his empire collapse when the economy tanked.

His debts to unsecured creditors have been estimated at $250 million. So far those creditors have been awarded just $2.8 million, or a little more than a penny on the dollar.

Eric Pryne: epryne@seattletimes.com or 206-464-2231


James Rigby
This diamond ring, one of two that former real-estate magnate Michael R. Mastro and his wife, Linda, were ordered to deliver to the bankruptcy court, was photographed at the Seattle FBI headquarters.




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