Former Las Vegas real estate broker Eve Mazzarella has been released from federal prison while she appeals her conviction in a $52 million mortgage fraud scheme.
The 9th U.S. Circuit Court of Appeals in San Francisco late last month granted her temporary freedom, saying her lawyers raised a “substantial question of law or fact” that could result in her conviction being overturned.
The court added that Mazzarella, 36, does not pose a flight risk or danger to the community.
On Tuesday, under direction from the 9th Circuit, Senior U.S. District Judge Roger Hunt held a brief hearing to set conditions of her release.
Hunt restricted her travel between California and Nevada for court appearances and to Washington state to visit family. Mazzarella is staying with her father, Mark Mazzarella, in San Diego and working at his law firm. She is not to obtain a passport, and she must stay away from witnesses in her case and not engage in any real estate transactions.
Following a lengthy federal trial in Hunt’s courtroom, Mazzarella and her ex-husband, former mortgage broker Steven Grimm, 51, were convicted in December 2011 of orchestrating a scheme that caused banks to lose more than $52 million over five years.
The lending institutions made more than $107 million worth of mortgage loans on 227 properties in the Las Vegas Valley, according to federal prosecutors. Most of the properties went into default.
Two years ago, Hunt sentenced Grimm, the mastermind of the scheme, to 25 years in prison and Mazzarella to 14 years behind bars. Mazzarella was at a federal prison camp in Victorville, Calif.
After the sentencings, Nevada U.S. Attorney Daniel Bogden said the scheme involved the largest number of properties and loss amount of any mortgage fraud case charged in the state.
The couple engaged in roughly 450 unlawful straw buyer transactions during the massive scheme, which occurred between 2003 and 2008, prosecutors alleged.
Mazzarella was considered a rising star in the real estate business until her federal indictment.
Grimm also is seeking release pending appeal, but prosecutors are opposing it.
Contact reporter Jeff German at firstname.lastname@example.org or 702-380-8135. Follow him on Twitter @JGermanRJ.