Brooklyn, NYThe President of Great Atlantic Group Inc., a Staten Island, New York-based real estate consulting firm, was convicted at a trial for a case of stock fraud that ended up costing investors more than $14 million, Bloomberg reported.
According to the news outlet, prosecutors told jurors in the Brooklyn courthouse that Joseph Mazella solicited money by falsely claiming that he would invest capital in real estate projects that included a warehouse and golf course in upstate New York.
Following a two-week trial, the jury found him guilty of securities fraud, wire fraud and money laundering, according to a statement made by US Attorney Loretta Lynch.
"Mazella’s victims, many of whom are senior citizens on a fixed income, turned to him to ensure their security in their golden years," Lynch said. "Instead, their security was raided to fund his fraud, and they will feel the impact of Mazella’s crimes for the rest of their lives."
According to the news outlet, Mazella used investor money to pay his mortgage, make payments on a Porsche and cover other expenses. He received more than $14 million from January 2007 to December 2010, as he noted that he would provide a fixed rate of return for investors.
When he is sentenced, the former president of the firm will face as many as 25 years in prison for the alleged Ponzi scheme. In this type of financial fraud, money from new investors is used to pay those who had invested capital earlier.
Reuters reported that he had promised investors that he had a safe harbor for their funds and a significant return on their money, but more notably he encouraged some of his victims, primarily elderly individuals, to apply for reverse mortgages on their homes.
Mazella's lawyers acknowledged that his investors suffered losses, but they argued that the lost money reflected the "unyielding and worsening world economic recession" and not a scheme to defraud. His sentencing date is yet to be scheduled, according to the news outlet.
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