Real estate broker, spouse indicted on fraud charges

A Las Vegas real estate broker and her husband have been indicted on charges of defrauding federally insured financial institutions of millions of dollars in a mortgage scheme, a special task force investigating mortgage fraud in Las Vegas announced.

Eve Mazzarella and her husband, Steven Grimm, were allegedly involved in a scheme of inflated housing values, straw buyers and limited liability companies, authorities said.

They're charged with six counts of bank fraud and one count of money laundering. Grimm was arrested Thursday and is scheduled to appear before a U.S. Magistrate Judge. Mazzarella has not been arrested.

The couple operated a number of limited liability companies registered in Nevada. They recruited "straw buyers," or individuals to make purchase offers substantially above the seller's asking price.

Once the purchases were negotiated, the straw buyers apply for mortgages at financial institutions and transfer the title to a designated LLC. After the mortgage loans were funded, the defendants would direct the title and escrow companies to disburse a portion of each loan to their LLC. They would then sell the property to another straw buyer at an inflated price.

The case was uncovered by the Southern Nevada Mortgage Fraud Task Force, composed of local and federal agencies such as the FBI, Internal Revenue Service, Metropolitan Police Department, Nevada attorney general's office and office of the inspector general for the Department of Housing and Urban Development.

U.S. Attorney Gregory Brower said mortgage fraud schemes have a trickle-down effect on Las Vegas residents.

"Home values and availability of credit are undermined by schemes like this one," he said.

When home prices are fraudulently inflated, legitimate home-buyers will also pay a higher price because appraisals throughout the neighborhood are increased.

"All of us are victims," Brower said. "This type of fraud scheme impacts the real estate market."

Steve Hawks of ReMax Platinum said these scams have been prevalent in Las Vegas for a while.

He cited a mortgage fraud case involving Pacific Wealth Management LLC, a Nevada company alleged to be one of four operators in violation of the RICO (Racketeering Influenced and Corrupt Organizations) act.

The lawsuit alleges that more than 700 victims have been scammed in several states with total damages exceeding $1.2 billion.

Review-Journal writer Adrienne Packer contributed to this report. Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.