News and Press Releases

Staten Island Real Estate Developer Sentenced to 10 Years for Operating a Multi-million Dollar Ponzi Scheme

June 15, 2012

A Staten Island man who was convicted of running a $14 million Ponzi scheme at trial was sentenced to 10 years’ imprisonment in Brooklyn federal court earlier today. Joseph Mazella, the founder and president of the Great Atlantic Group, Inc., a Staten-Island based real estate and financial consulting company, was sentenced by Chief United States District Judge Carol B. Amon. A federal jury in Brooklyn returned guilty verdicts against Mazella on charges of securities fraud, wire fraud and mail fraud after a three-week trial in February.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.

The evidence at trial proved that Mazella told prospective investors that he would invest their money in real estate projects, including projects in Trenton, New Jersey, a warehouse in Utica, New York, and a golf course in Greene County, New York. Mazella told his victims that their money would be safe and that he would pay them a fixed rate of return. In exchange for their investment, Mazella issued notes to investors that were supposedly backed by mortgages on the properties and encouraged several investors, typically senior citizens, to apply for reverse mortgages on their residences and to invest the proceeds with him. From approximately January 2007 until approximately December 2010, investors gave Mazella more than $14 million. By January 2007, though, 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 also used investors’ money to pay his personal expenses, including payments for a Porsche, mortgages on his personal residences and family expenses.

“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 Lynch. Ms. Lynch extended her grateful appreciation to the Federal Bureau of Investigation, which led the government’s investigation.

The government’s case was prosecuted by Assistant United States Attorneys John Nowak, Winston Paes and Mary M. Dickman.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The Task Force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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