All language subtitles for American Greed s08e03 The Cunning Cowgirl Crook Dollars for Dumps

In this episode of American Greed, ride
them, cowgirl.

Rita Cronwell appears to be a humble
small -town civil servant, which is

a double life as a world champion horse
breeder. It's a deception that comes at

a huge price.

Everything that I've learned about
showing horses, you must either be

independently wealthy or you're stealing
the money.

When this cunning comptroller diverts
more than $53 million of Dixon,

money into her horse empire,

She leaves a city on the verge of
collapse.

People are going to have to lose their
jobs to balance this budget. For what? A

divorce? For a trophy?

Are you kidding me? And later, Staten
Island native Joe Mazzella wants to help

friends and neighbors with the promise
of using their money to turn distressed

properties into highly profitable
residential oases.

Joe's pitches.

We're just like you going out and having
a beer with a friend. He lures in

retirees, policemen, firemen, and even
members of the deaf community.

But this opportunity is a $14 million
scam, where his clients' savings and

end up as gutted as his junk properties.

I was calling him every single day.

Where's my money? Where's my money?
Where's my money? And there was no

Nothing came.

In the fall of 2011, as autumn leaves
begin to warm the landscape of the

picturesque town of Dixon, Illinois, a
cold reality is taking hold.

The city was drowning in debt. There
were streets that went unpaved. There

sidewalks that went, you know, unfixed
because the city, as they believed, had

no money to take care of those sorts of
things.

Dixon Mayor Jim Burke hears the message
of distress year after year from the

city official pulling Dixon's purse
strings, Comptroller Rita Cronwell.

She would present the figures for the
annual budget workshop, which

showed that it was going to be nip and
tuck because of the financial situation.

But this fall, Cronwell is taking
vacation time to prepare for a quarter

exhibition.

She's hoping to add to her already
extensive collection of trophies as a

champion show horse breeder and
exhibitor.

Back in Dixon, however, the woman
filling in for Cronwell goes through the

city's financials and uncovers a
mysterious bank account under Cronwell's

control.

In September alone, she finds more than
$750 ,000 are inexplicably siphoned

into that strange account from the
city's coffers.

She alerts the mayor.

Our city clerk brought a bank statement
to me, and she

said, I cannot connect this with
anything.

I started to get sick to my stomach
because I realized this was a big ripoff

going on.

Six months later, Mayor Berg sits in
front of the citizens of Dixon and

from media outlets across the country to
explain what authorities believe may be

the biggest municipal fraud in U .S.
history.

First of all, I'd like to thank the FBI
for their comprehensive response to our

request for a criminal investigation
into this matter.

This is a traumatic, upsetting event
that the citizens and council are

experiencing. Traumatic and upsetting
are not words typically used in

association with Dixon, Illinois.

U .S. Marshal Jason Waddillo is
dispatched to Dixon just days after

Burke's press conference in the spring
of 2012.

The city was the size of 15 ,000, 16
,000 people, good, hardworking farmers,

lot of farmers in the community. You
know, your typical heartland of America

city.

Rita Cronwell has worked in Dixon City
Hall since 1970, beginning as an eager

high schooler and eventually making her
way up to city comptroller in 1983.

My name is Dan Langloss. I'm the chief
of police in the city of Dixon. By the

time Dan Langloss becomes the Dixon
chief of police in 2008, Cronwell has

the trusted guardian of the city's
finances for 25 years.

She was very highly regarded, very well
respected.

If you had a question, go to Rita. If
you need something, go to Rita. And

everybody always looked at her that she
could fix any problem or just take care

of anything that needed to be done.

If Cronwell's dependability is exhibited
in her work, her passion is on display

in another arena, showing quarter horses
at exhibitions nationwide.

Marsha Freeman breaks and trains horses
near Cronwell's home in Illinois and

remembers Cronwell's early years in the
industry in the mid-'80s.

At that point, I think she was just like
the regular horse person showing horses

as a hobby, which would involve moving
in on a Thursday, showing horses Friday,

Saturday, Sunday, and returning back
home and going back to a normal job and

work week.

But Cronwell takes this more seriously
than a weekend hobby. In 1990, she

her own horse breeding business named R
.C. Quarter Horses, LLC.

There's only one problem.

Showing horses is an expensive hobby, so
you're...

You're going to need to have some
startup cash to do it correctly.

With her humble background, Cronwell
doesn't have enough money to support the

boarding, medical care, transportation,
and trainers necessary for a world

-class breeding program.

But as Dixon's comptroller, large
amounts of cash pass through her hands

day. According to Assistant U .S.
Attorney Joe Peterson, on December 18,

Cronwell crosses a line that will change
her life and the city of Dixon forever.

She opened a secret bank account in the
city's name, and only she has control of

it. She named it the RSCDA account,
which stood for some acronym involving a

sewer, reserve sewer account, but it
really was not a legitimate city account

all. Because Cronwell has full authority
to write checks on the city's behalf,

it's easy for her to filter government
money into the new account.

She was creating fictitious invoices,
purportedly representing different

projects that were going on in the city
that, in fact, never were going on. And

then she would pay the bills. She would
pay the invoices and then deposit those

checks into the secret bank account.

As the FBI will come to learn, with no
one else's eyes on the secret account,

Cronwell is free to divert the city's
money into her personal business.

And she does.

It has become known as the single
largest municipal fraud in U .S.

When American Greed returns, Rita
Cronwell uses Dixon's money to become a

beater. But the city of Dixon is just
beaten down.

It becomes a free -for -all for her. She
was aware of the infrastructure project

that needed to be performed in the city.
But again, feeding her ego seemed to be

more important.

By 2010, small -town comptroller Rita
Cronwell has developed an unbridled

passion for victory in the world of show
horses.

Mike Jennings is a veteran horse
auctioneer who has also been showing and

judging horse competitions for more than
30 years.

And even he is impressed as he watches
Cronwell turn a one -horse stable into

American quarter -horse dynasty.

Over the last...

I'd say 10 to 12 years, she had elevated
herself to be in the very top echelon

of breeders and exhibitors. If she is
not the leading owner or breeder of

champions, she would be very close.

Cronwell comes to own more than 400
horses, with more than 50 of them

world champions in their class.

And she isn't shy about flaunting her
success in front of other horse

exhibitors.

When she would show up, it was this
entourage of tractors and trailers, you

know, 18 -wheeler type rigs. Rita
Cronwell, in her mind, became a brand.

And it was that brand that was built
over time that was feeding her ego.

And the only way it was being fed in
this case was by siphoning money off

the city of Dixon.

Because with prize money typically
coming in at $5 ,000 to $10 ,000,

doesn't equal riches.

It's expensive to get to the level that
she was at, and she had horses in over

15 states where she would pay people to
board the horses, train them, feed them,

and that cost a lot of money.

Everything that I've learned about
showing horses, you must either be

independently wealthy or you're stealing
the money.

And Rita Cronwell is not independently
wealthy.

While Dixon citizens believe that
Cronwell's world champion horse business

for itself in prize money and breeding
fees, in reality, it's all being funded

by the city coffer. And each year, her
theft grows more outrageous.

This sort of depicts a graph of what the
total loss was, what she was stealing.

She started out in 1991.

She stole $181 ,000.

As it progressed in 1999, she had hit
the million -dollar mark. And then two

years later, she's into the $2 million
mark.

It escalates to over $5 million by 2008.

It all depicts the total loss of more
than $53 million.

It's a simple fraud that Wadillo says
points to a systemic failure of Dixon's

government. There were no checks and
balances.

There was no separation of duties, no
segregation of duties.

She did it all.

With that power, Cronwell has the city's
checkbook to use as she pleases.

When you have part -time city
administrators, the mayor's part -time,

commissioners are part -time, you know,
they're trying to earn a living to

provide for their families doing
something other than running the city.

simply weren't asking enough questions
or perhaps the right questions.

In the meantime, Cronwell is stealing
more money under Dixon's nose every

And every year, Dixon is forced into
painful decisions to stay afloat.

In April of 2009, they needed to cut $38
,000 that was intended to be used to

purchase ambulance equipment.

While at the same time, in 2009, Rita
Cronwell stole almost $5 .6 million from

the city of Dixon.

Year after year, it's more of the same.
Less money for Dixon's basic needs and

more money for Rita Cronwell's world
champion lifestyle.

When she purchased several motorhomes
during the course of the scheme, the

one she purchased for over $2 million.

She also purchased several homes.

She purchased land. She purchased a
large number of vehicles. She purchased

jewelry for herself and others.

Hundreds and hundreds of pieces of
jewelry. A lot of it custom -made, as

see, with her name on it, with the RC,
again, her brand. Good Ride was the

theme of that necklace.

And back on her ranch, her extravagant
trophy room is a shrine to all her

accomplishments, paid in full by Dixon
taxpayers.

The room, it reeks of wealth.

She had custom -made bar stools that had
a horse theme.

The sofas in the trophy room were of a
horse theme. Again, it was clear where

she was spending a lot of the money that
she was stealing.

But to residents of Dixon, the newfound
wealth is a perfectly reasonable

explanation.

Well, there would be stories like, you
know, floating around town that, you

know, that she'd sold a horse for, say,
$250 ,000.

She had people coming from all over the
United States and even some people from

Europe that came for this auction. So
she did a great job of cultivating this

image of having a very, very profitable
and successful horse business.

Besides, Cornwell works hard to keep her
modest down -home image in Dixon

separate from the celebrity image. she
cultivates on the exhibition circuits.

It is my understanding that she really
didn't show a lot of glamour in the

She wasn't wearing a lot of expensive
jewelry.

You know, wasn't wearing a lot of
expensive clothing.

Now, the clothing that she bought to
take to the horse shows, if you're in

industry, you understand that it is
rather expensive.

It's another way that Cronwell keeps her
double life a secret.

We've had a lot of people come into our
industry and spend a lot of money.

Sometimes you find out where their money
came from and sometimes you don't. But

mostly we're glad they're in our
business, you know, for a while.

But she won't be an industry leader much
longer.

When American Greed returns on her quest
for fame as a horse breeder, Rita

Cronwell lets go of the reins at work
and takes a nasty fall.

The fraud was caught because, again, as
is often the case with fraudsters, it

occurs when they go on vacation.

By the fall of 2011, Dixon Comptroller
Rita Cronwell's message of austerity has

become agonizingly repetitive.

Each year at the budget hearings, you
know, she would show up, certainly in

latter years, as came out as evidence in
this case, she would show up with

booklets where she had characters of,
you know, someone drowning or, you know,

pair of scissors.

And her message was cut, cut, cut.

Eventually, the heads of the city's
various departments learned to simply

asking for funding.

Again, not to be critical of the form of
government, but when you have part

-time city administrators, the mayor's
part -time, the city commissioners are

part -time, they were relying very
heavily, understandably, as many city

officials do, on their annual audits
that were occurring, or perhaps not

occurring. 21 annual audits and no
warnings of any red flags.

Nothing. I'd read these audits over
every year, and there was never any

indication that...

that they found anything that we ought
to be taking a look at. Another piece of

the puzzle is that evidence came out
during the civil litigation that the

auditor had a personal interest in Rita
Cronwell. She had had him over for

dinner. He had asked her out on dates.

So perhaps his eyes were a little glazed
over in looking at the numbers.

Could the entire town have been seduced
by Cronwell's charms?

How could they have not known $50
million were missing from the town's

To put this in context, when the city
was a smaller population, a smaller

government, when the large box stores
didn't exist in the community,

when the Illinois toll road wasn't going
through the county, the budget wasn't

as large.

And so as the city grew over time...

Understandably, there was more revenue
being generated from taxes, from real

property, and the like. As that grew,
the city wasn't necessarily missing it

because they didn't know it existed.

In October 2011, Cronwell looks to add
yet more trophies to her collection from

one of the biggest single -breed horse
shows in the world in Columbus, Ohio.

But it comes at a huge cost.

While filling in for Cronwell, a city
clerk uncovers Cronwell's phony sewer

account that has eluded city hall's eyes
for more than 20 years.

One of the statements from the RSCDA
account came across her desk. She looked

it, didn't recognize it as a city
account, and then expressed those

the mayor, and then he forwarded that
information to the FBI.

For Mayor Burke, it's the beginning of
six months of nearly unbearable anxiety

as he sits back and watches Cronwell
continue to steal millions while the FBI

conducts its investigation.

Once I knew what her method of operation
was, we were able to see that she was

taking these funds.

And I even told the FBI agent once, I
said, you know, if we don't find this

pretty quick, there won't be any money
left at the rate that she's going.

Finally, in the spring of 2012, Mayor
Burke is told that the FBI is ready to

make an arrest.

Early in the morning on April 17th,
Cronwell walks into Mayor Burke's office

finds three FBI agents waiting.

I said, these three gentlemen would like
to talk with you. She said, sure.

And her face never changed a motion or
anything.

I was watching that carefully to see how
she would react. And it was just

like... Real nonchalant.

Almost made me wonder if she hadn't, you
know, kind of mentally rehearsed.

Later that day, Cronwell is escorted
from the office, charged with one count

wire fraud.

But for U .S. Marshal Jason Wadillo, the
work is just beginning.

He seizes Cronwell's possessions and
brings in auctioneer Mike Jennings to

conduct one of the largest, most
prestigious horse auctions in the world.

All to raise money to give back to the
town.

This was a world -prized herd that was
being sold.

And I knew that people were going to
come from around the world to Dixon,

Illinois for this auction.

And they were going to spend money. They
were going to eat at restaurants.

They were going to stay at hotels.

And all that tax revenue was going to be
a byproduct of our auction.

But it was very important to me.

Having sat down across from the dinner
tables of many of these people in this

community who were true victims, who
were victimized for so long and deprived

services, public services, it was very
important to me to have that auction,

live auction, in Dixon, Illinois.

Cronwell's horses bring in $5 .5
million.

Combined with selling Cronwell's other
properties and assets, the U .S.

return to Dixon about $9 .2 million.

Most of the rest of the $53 million she
stole are simply the sunken costs of

Rita Cronwell riding after her
extravagant and expensive dream.

In the five months that we managed the
herd, we spent about $1 .8 million in

costs. And that's simply to manage the
herd. We're not showing the horses.

So, you know, our taking over of the
operation, I think, speaks to knowing

we were paying, clearly what she must
have been paying.

But it turns out, all is not lost.

In October 2013,

Mayor Burke addresses the town of Dixon
once again.

The year before, the city sues its two
auditors for not detecting $53 million

being diverted into Cronwell's pocket.

And sues Fifth Third Bank for allowing
her to operate the secret account right

under their noses.

Without admitting wrongdoing, the three
companies agreed to pay $40 million back

to the city of Dixon.

Out of this will come a better, a
sounder, and a more attractive Dixon for

of us to live in.

Cronwell pleads guilty to one count of
wire fraud.

And on February 14, 2013, is sentenced
to 19 years and seven months in prison.

If she's ever going to see Dixon's
economic recovery...

It won't be until she's 77 years old.

In the meantime, people who work with
her day in and day out, like Police

Dan Langloss, still have questions.

How could you, Rita?

How could you? How could you hurt so
many people? How could you do this? How

could you get people's jobs, people's
families at risk over your greed?

For what, a horse?

For a trophy?

Are you kidding me?

Next on American Greed.

Staten Island native Joe Mazzella
convinces investors that he can make

by turning distressed properties into
gold mines.

But his promises are as empty as the
buildings he claims to restore.

Real estate development was never a
vocation for him. His real business, his

real vocation was fraud.

Winter 2011.

Linda Giovinello and her husband Tony
are house hunting in the woods of North

Carolina.

They're earning money for a $175 ,000
investment with Staten Island real

developer Joe Mazzella. And after 27
years of marriage and a lifetime of hard

work, they think their vision of their
golden years is within their grasp.

The dream home, the retirement,
everything.

We thought we were getting there.

While searching for the perfect home by
the water in which to live out a secure

future together, they get some
disturbing news.

Our friend called, and he said, turn
your TV on.

And I said, why?

And he said, well, the FBI just went
into Joe Mazzella's office and seized

files. The couple cuts their trip short
and reaches out to Mazzella to find out

what's going on.

And then he called me and said, nothing
to worry about, everything's fine.

And I said, Joe, don't tell me that.

I said, FBI does not go in unless
something's wrong. And like my husband

that was the start of a broken dream.

Their dream is alive and well only
months earlier when they first come

Joe Mazzella. As FBI agent John
Robertson explains, Mazzella is a former

insurance salesman looking to expand his
horizons.

In the early 90s, he begins his own
company that eventually becomes the

Atlantic Group.

The Great Atlantic Group was a one -stop
shop for real estate services. You

could do loan origination.

You could modify your existing mortgage.

You could do wills, estates, trusts.

To many people, people just in off the
street for a loan modification, that's

all he would provide them. He'd modify
their mortgages or he'd provide them

mortgage loans.

But for others, Joe would identify them
as people with

significant money to invest, and Joe
would offer real estate investment

services.

Mazzella tells these deep -pocketed
clients about an opportunity to invest

commercial and residential properties
across New York and New Jersey. He says

that with their investments, he'll be
able to rehab and develop these

into prime holdings.

The phrase he used to always use was,
everything's rocking and rolling.

Loretta Lynch is the U .S. Attorney for
the Eastern District of New York.

He had this foolproof method, according
to Joe Mazzella.

Invest your money with me. I guarantee
10%, sometimes 8%, sometimes more, but

usually around 10%. And he would
differentiate himself from the big

who were, according to him, promising 20
% and 24%. So he's making people feel

safe.

Mazzella guarantees the investment with
a promissory note.

and projects such confidence that he
even provides a schedule letting

know exactly what their investment will
be worth every step of the way.

Joe would provide this to his investors
to say, look, here, you can see in July

of 2008, eight years from now, this is
exactly what your investment will be

worth. While the numbers are enticing,
in Staten Island, what really seems to

pull in clients is the man doing the
picking.

Joe wasn't some guy sitting in a 100
-story building on 48th and Park in

Manhattan. Joe was a Staten Islander. He
was your kid's baseball coach.

He was your uncle. He was your nephew.

Joe's pitches were just like you going
out and having a beer with a friend. And

just a normal conversation turns into,
hey, listen, I've got an investment

program.

It may be something you want to hear
about. And, in fact, Joe would also hold

investor meetings where his friends
would bring in their friends.

He started off by providing routine tips
on how to save money that you can get

from a Google search and then went into
his spiel and into his pitch, and he

brought out all these pictures of these
properties that he was telling his

investors were going to be worth all
this money.

This is right across from the reservoir.

This is about 120 units.

Ann and Joseph Martucci have been
married for 30 years.

They first heard of Mazzella in 2006, at
a time when the couple could use some

financial help.

Ann suffers from diabetes, and Joseph
survived a heart attack earlier in the

year, and neither is able to work.

The family is collecting disability, but
they can't seem to make ends meet.

We were drowning, literally drowning.

Martucci says that her husband has
always provided for her and their two

children. But after facing his own
mortality, he not only worries about the

present, but a possible future when he
may not be around to help at all.

So he was just desperately scrambling,
continuously scrambling.

How is he going to provide?

Joseph Martucci finds a ray of hope.

when he hears about Joe Mazzella from a
local businessman.

The couple meets with Mazzella in his
Staten Island office.

He kind of connected with my husband,
like, almost immediately, because my

husband was looking for a way out. On
the other hand, I'm not easy, and I

just didn't trust the whole situation.

But he was so scared, and rather than
argue with a man who's had a heart

I said, it's his money.

Convinced, Joseph eventually invests his
entire 401k with Mazzella, worth more

than $260 ,000.

According to the paperwork, their
investment is backed by the mortgage on

Mazzella's properties in Trenton.

This is what Joe described to his
investors as a renovation project

942 Prospect Street in Trenton. This is
what actually was located at 942

Prospect Street.

This is bird feces all over the first
two steps. The windows are smashed out.

The place was empty.

As a matter of fact, none of Joe
Mazzella's properties are living up to

artist's vision.

Joe owed money on these properties to
his lenders.

They were worth nothing.

He had some pretty drawings.

He had some very nice renderings.

But the reality of those properties were
they were nothing but a financial

drain. And they simply were a cover.
They were the conduit by which he

people's money into his own pockets.

When American Greed returns,

Joe Mazzella recruits more than 100
investors into his scheme, preaching

Island values to Staten Island people.

They didn't hear the snake oil salesman.
They didn't see the carnival operator.

They saw a neighbor.

They saw someone who really was
espousing their values.

To see more of Joe Mazzella's money
pits, go to AmericanGreed .CNBC .com.

Feeling greedy?

Want more than your share of behind -the
-scenes dirt?

Follow us at AmericanGreedTV on Twitter.

We'll be right back.

Between 2007 and 2011, purported real
estate developer Joe Mazzella brings in

more than $14 million from over 190
investors on the promise of

renovating and developing commercial and
residential properties.

Mazzella's defense attorney, Ephraim
Savitt, believes the business is built

solid foundation.

He claims that Mazzella has been
satisfying investors for decades.

There are 20 years that preceded the Joe
Mazzella case.

Those 20 years didn't generate any
problems whatsoever.

As the economy was good and real estate
prices kept on rising, everybody was

doing good.

Nobody complained.

But according to Special Agent John
Robertson, it's all a ruse.

Most investors only think they're making
money. Many of them simply roll over

their returns and never actually get
their hands on their so -called

When somebody says, you know, how's your
money with Joe? Well, what do they do?

They look at their amortization piece of
paper, and they look and they say, oh,

well, my $100 ,000 investment, it's not
worth $190 ,000. Look how well I'm

doing.

Investors believe that Mazzella has
commercial and private real estate

properties all over New York and New
Jersey making profits.

But in reality...

His properties are absolute money pits.

This is a property that Joe described to
be his, located on Stokes Avenue in

Ewing, New Jersey.

And this is 8894 Stokes in reality.

Joe never even owned this piece of
property.

He didn't put the money into those
properties to develop them, and he had

motivation to develop them. His
motivation was to fleece people.

For Joe Mazzella, the fraud was his job.

And the job pays quite well.

After a few expenses.

Well, the money that he would take in
from new investors would go to pay the

old. It was a classic Ponzi scheme.

I have to add, though, a good part of it
went to pay Mr. Mazzella. It went to

pay for his house in a fairly exclusive
area of Staten Island. He went to buy

his cars.

He was a sports memorabilia nut, a great
hobby if you can afford it with your

own money.

Unfortunately, he financed it with the
money from his investors.

And Mazzella seems to have a particular
skill in infiltrating different

communities within Staten Island.

Joe took the assets of an entire local
postal union and squandered them. He

had many retired police officers and
firemen liquidate their pensions in a

sum and invest them.

But Mazzella isn't limited to civic
workers.

He also got himself in with a deaf
community.

He had an investor who was deaf and
introduced Joe to a lot of other deaf

people.

Tony Giovinello has been deaf since
birth. After working for decades as a

mechanic in Center Reach, New York, he
and his wife of 28 years moved to

Arizona. But Arizona isn't what they
envisioned. And with a settlement from a

car accident, they're hoping to
recapture better times.

When we were living in Center Reach,

Those are happy times. You know, we had
a nice house.

We had a boat.

Tony loves fishing, loves boating. In
Arizona, you just can't do

that, you know.

While back visiting New York, the
Giovinellos hear from one of Tony's deaf

friends about Joe Mazzella.

We were in New York, and his friend...

told us about this person that he was
investing money with, and that this

of his also had a lawyer friend that had
also invested money with him. And

seven, ten years they've been doing it,
and they had no problems. They were

getting their monthly income.

Linda decides to meet Bozella in person.

After hearing his pitch, she discusses
the idea again with Tony.

I told him, I said, he seems to be fine.
I didn't see anything that I didn't

like. And then we decided to invest $100
,000 with him.

And that was in August of 2010.

What the Giovinellos don't know is that
by August 2010, Mazzella is in serious

trouble. With the economy struggling,
More and more investors are asking for

their money, and he's having trouble
paying his clients their monthly

distributions.

Once he had about 150 to 200 investors,
it became managing chaos.

How to is whack -a -mole. If one
investor came up and they were screaming

money, Joe would pay him off, and
hopefully another investor would come in

door the next day to make him whole
again.

In his desperation, Mazzella turns up
the recruiting efforts.

He's still trying to get money from
people. He's still telling them that

real estate investments are profitable.

He kept using the phrase rocket and
rolling when they weren't doing anything

declining.

Mazzella even comes up with a new
investment opportunity, a golf course

condominium project in upstate New York
called Golden Greens.

In reality, it's just another empty
promise.

This is what was supposed to be the golf
course.

Absolutely no evidence of any
development or the existence of any golf

whatsoever.

It's a lot as empty as Mazzella's own
bank accounts.

Most of the $14 million Mazzella has
taken in from more than 190 investors in

the past four years is gone.

It's used to pay interest to past
investors.

Near the end of 2010, December, Joe may
have had about $15 ,000 across the

different bank accounts. Even his own
home, he had a million -dollar mortgage

on. The only thing that Joe owned were
the sports memorabilia that were hanging

in his office.

When American Greed returns, Joe
Mazzella can't keep the balls in the air

longer. And some investors aren't going
to just let them fall without a fight.

I was calling him every single day.

Where's my money? Where's my money?
Where's my money? And he kept saying to

it's... You know, it's coming. The
lawyers are working on it. Blah, blah,

blah, blah, blah, blah.

And there was no money.

In the summer of 2009, Joseph and Ann
Martucci received stunning news.

Ann is diagnosed with lymphoma.

On September 16th, She goes in for her
first chemotherapy treatment.

The next morning, the family's troubles
get even worse.

Ann has to call an ambulance when her
husband complains of chest pains.

He walked out, down my front steps, got
on the gurney himself, and all of a

sudden, we see his arm go to the side.

I did not believe that that was going to
be the last time I saw him.

At only 54 years old, Joseph Martucci
dies that morning of congestive heart

failure.

The Martucci's have $260 ,000 invested
with Staten Island real estate developer

Joe Mazzella.

They believe the interest in the
investment has been accruing in their

But with their husband's death, Martucci
begins taking monthly payouts.

I...

was receiving money for one year of, I
believe it was $2 ,210.

And it just, it was great at the time
because I needed it. That's exactly what

my mortgage payment was. So that went
from here to my mortgage.

Meanwhile, inside the Great Atlantic
Group, Mazzella's luck is about to run

In October 2010, an employee of the
company contacts the FBI with

that Mazzella may be running a Ponzi
scheme.

Special Agent John Robertson begins
investigating Mazzella's properties and

finds one rat trap after another.

All the hopes and dreams of these
investors were in awful areas in

We're in an empty warehouse in Utica.

And then we went to the golf course
where we thought if there's going to be

hope that it's legitimate, it'll be at
the golf course.

Well, we go to the golf course, and
there's not even a golf course. There's

nothing there.

On January 28, 2011, the FBI raids
Mazzella's office and pulls him aside

questioning. I said to Joe, look, you
know, we have enough bank records to

this room.

And what these bank records show me is
that you've been perpetrating a Ponzi

scheme for several years now. And Joe
said, I cannot argue the bank records.

If you can't argue the bank records, and
the bank records show you taking money

from Peter and paying Paul, you've got a
Ponzi scheme.

Mazzella is charged with 12 counts
related to the fraud and pleads not

In trial, his attorney, Ephraim Savitt,
asserts that the situation is just a

case of a desperate man trying to
operate under difficult circumstances.

Now, there are 20 years that preceded
the Joe Mazzella case.

Those 20 years didn't generate any
problems whatsoever, any complaints, any

lawsuits. Things went wrong essentially
when the real estate market fell.

The developers of various real estate
tracks were unable to pay Mazzella,

as a result of which Mazzella was unable
to pay his clients, as a result of

which he reached out to other clients
with representations.

not all of which were entirely true. In
fact, some of them were false.

Desperation leads to this kind of a
situation.

The jury doesn't sympathize. They find
Mazzella guilty on 10 of the 12 counts

charged.

On June 15, 2012, he is sentenced to 10
years in prison and ordered to repay

$14 million in restitution.

But it's unlikely the victims will ever
see any of it.

John Robinson came out after me when it
was all over because I was hysterical.

And he came out and he put his arm
around me and he said, Ann, make believe

never had the money.

The healthiest attitude in a case like
this is that you have to accept the

possibility, if not probability, that
you'll never see this money again. All

can do with some of these investors is
give them a hug. I mean, it's it. It's

all you can do.

People have lost their homes, they've
lost equity in their homes, they've lost

their savings accounts, and they've lost
their retirement accounts.

But I have to tell you, as tremendous an
impact as that has, what is really even

worse has been the personal impact on so
many of these victims.

Their trust in themselves has been
destroyed.

They no longer think that they have good
judgment.

They feel shame.

They feel guilt.

I would cry.

Yeah, he would cry, you know.

I mean, we sat and had long
conversations, and he says, you know,

-earned money is just gone, you know.
And I said, yeah, it's gone.

The Giovinellos still hope to get to
North Carolina someday, but now

is a long way off.

Linda has returned to nursing in New
York while Tony tries to find work in

Arizona. In the meantime... They have to
sort through the pain they've suffered

and the toll it's taken on their
marriage.

Look at me.

Tell me what you feel.

They want to stay married.

I just want you to know that I don't
blame you.

I mean, it was a joint decision.

We made...

The investment together.

You didn't force me. I didn't force you.

And I love you.

And Martucci's husband is no longer with
her. And now even his legacy is largely

gone. It's devastating.

It really is devastating.

It's a devastating feeling to know how a
man has worked since he's 17 years old.

And he's gone.

And everything he worked for is gone.

Bartucci was depending on Mazzella's
payments to pay her mortgage because she

has diabetes and is recovering from
lymphoma and can't work.

And thanks to Joe Mazzella, she now
faces the likelihood that she'll lose

home.

Still, she is trying her hardest to keep
her thoughts on the good in life.

I wake up in the morning and I can say
hello to my two children.

That's the most important thing in my
life.

And so they come and put the lock on the
store.

That's the way it's going to be.

I can't do anything about it.

And I'm not going to let that SOB be a
part of my thoughts, be a part of my

anxiety. He'll have his day, and either
he's having it now or God's got

something else in store for him.

But he'll get his.

When you work for Steve Stevens.

Two big games tonight on the West Coast.
You ready to kick some ass? We're going

2 -0 tonight. You better always be
closing.

Good afternoon. How are you doing, sir?

Can a young agent cut it in the
cutthroat sports betting biz? Is this

what you want to do or what?

Money Talks. All new right now.