Fugitive Seattle real-estate magnate Michael R. Mastro and his wife, Linda, have been arrested in France after 16 months on the lam.
James Frush, Michael Mastro's Seattle attorney, said he learned of the arrests Wednesday morning. The couple are in the custody of French authorities, he said.
A U.S. grand jury has indicted Mastro on criminal charges, several sources said, but the indictment has not yet been unsealed and the nature of the charges is not known.
Frush said he doesn't know for certain that his client has been indicted, and has requested a copy of any charges. He also said he doesn't yet know whether Mastro will fight extradition.
Details of the arrests were not immediately available. A spokeswoman for the U.S. Attorney's Office in Seattle declined comment Wednesday.
The Mastros disappeared in June 2011, days after the judge in Michael Mastro's massive bankruptcy case ordered them to turn over two giant diamond rings valued at $1.4 million.
They officially became fugitives a month later when warrants were signed for their arrest. But those warrants were for contempt of court, a civil violation, and experts said it would be difficult to extradite the Mastros without a criminal charge.
Michael Mastro, now 87, was a longtime and prolific real-estate developer and lender whose website alluded to his "billion-dollar career." But his highly leveraged empire fell apart when the market tanked.
Three lenders pushed Mastro into bankruptcy in 2009. The most recent estimate of his debt to unsecured creditors is $250 million, and court-appointed trustee James Rigby has said those creditors will be lucky to get back more than a few pennies on the dollar.
Federal authorities began a criminal investigation of Mastro nearly three years ago.
Rigby said Wednesday he was pleased to learn of the arrests. He has maintained for years that Mastro has hidden assets that should go to his creditors — allegations Frush has denied.
"This is a good day for the bankruptcy system, and this is a good day for the criminal-justice system," Rigby said. "Now Mr. Mastro can come back to Seattle and explain to his friends and family and creditors where the money's at."
If the Mastros bring back the diamonds, that would be even better news, Rigby added. A bankruptcy judge ruled after the Mastros' disappearance that the jewels rightfully belong to creditors.
Eric Pryne: 206-464-2231 or email@example.com