Editor’s note: Below is the first in an occasional series that will profile people and places affected by home foreclosures and a faltering economy.
Sandee Malina worked out a plan with her two young children: Whenever they heard the doorbell ring or a knock on the door, they were to run into a room with a phone and lock the door.
If they heard yelling and screaming, either mommy’s or somebody else’s, they should call 9-1-1. She didn’t tell them that the police said she could shoot someone who barged into the house without permission.
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Malina holds back tears as she recalls how the dream she and her husband had of owning their own home — something their children could be proud of — turned into a nightmare.
When she confronted her real estate agents with evidence they were running a scam, they had threatened to send over people to throw her family out of their home.
"It really freaked me out," 35-year-old Malina said. "I didn’t want me and my kids to get thrown out on the driveway. I called everybody for help but didn’t get anywhere.
"The police said I could shoot anyone who broke in. But I don’t have a gun. I’m afraid of guns."
For five years, Rodd and Sandee Malina have wanted Las Vegas to be home.
It’s the place where their 10-year-old son, Josiah, learned to play baseball, where their 7-year-old daughter, Jurnee, discovered her love for drawing, where Mom and Dad cheered them on and relished the chance to put down roots.
That all changes today.
This afternoon, the Malinas board a plane for their native Hawaii with only their family pictures and the clothes they can stuff into their luggage.
"We put our trust in people, and it blew up in our face," said Rodd Malina, an operating room technician. "And then the economy blew up, too."
Marine Corps veteran Rodd Malina, 37, stood tall as he talked about how the stress has worn on his wife and children.
If he didn’t have a responsibility to take care of them, he said, he might have gotten physical with those who bilked him out of thousands of dollars.
"I’m not sure I would have worried about the consequences," he said.
The Malinas say that last year, they unwittingly got caught up in one of the many real estate schemes that have made federal authorities refer to Southern Nevada as "mortgage fraud ground zero."
The Malinas negotiated a deal for a home in 2007 that quickly went sour.
Unbeknownst to them, they were trying to purchase a home in foreclosure that could be taken by the bank at any time. They had entered into the lease-purchase deal with Distinctive Real Estate & Investments, owned by Eve Mazzarella.
Early in 2007, Sandee Malina saw an ad from the firm owned by Mazzarella, who in 2006 recorded sales of $13.8 million, making the National Association of Realtors’ "30 Under 30" list in 2006, which names the top young agents in the nation.
A $250,000 house in northwest Las Vegas on Sierra Paseo Lane was available for sale under a "lease-purchase" arrangement. Put $5,000 down, the ad said, and then pay $1,300 a month for a year and the real estate company would qualify the buyers for a regular mortgage on the 1,700 square-foot residence.
The Malinas moved in on Feb. 1, 2007, following a negotiation with an employee of Mazzarella’s.
"It was just what we wanted," Sandee Malina said. "My kids had always wanted a two-story house. It had three bedrooms with a loft and a catwalk. We saw ourselves living there for a long time."
Two months after the Malinas moved in, there was a knock on the door. A real estate agent not with Distinctive Real Estate wanted to know if the owner of the house wanted help in getting the residence out of foreclosure.
Stunned, the Malinas repeatedly called Distinctive Real Estate. They were told there must be a mix-up.
Later, the Malinas said they contacted county authorities who said the house had been in foreclosure for months. The bank said no payments were going toward the mortgage.
Not wanting to lose more money on the deal, the Malinas didn’t make payments to Distinctive in May or June.
"I wish we could have afforded an attorney to sue, but we didn’t have the money," Rodd Malina said.
Soon the Malinas said they started receiving threatening eviction phone calls from Distinctive.
"Every day for two months, I got those calls about how they were going to throw us out," Sandee Malina said. "I was crying every day, and my children were wondering what was wrong with me."
In June 2007, a knock at the door came from a constable. The Malinas were to be evicted for not making payments to Distinctive.
"No one would believe then what that company was doing," Sandee Malina said. "I tried to explain, but it seemed foreign to people, like it couldn’t be done."
The Malinas were told to get out. They took only their clothes with them. A week later they were able to get their furniture.
The family bunked with nearby families for days.
"I had to borrow money from my family to get another place," Rodd Malina said.
"Losing five or six thousand dollars may not seem like much to some people, but we’re working people. But that doesn’t bother me as much as what has happened to my wife and children. How could they put children through this?"
In March of this year, the family cheered when they saw U.S. Attorney Gregory Brower on television announcing the indictments of Mazzarella, 31, and her husband, Steven Grimm, 45, in connection with a complex real estate scheme.
The government accusing Mazzarella of real estate fraud — even if the indictment didn’t specifically include their situation — felt like vindication for the Malinas.
"At that point, I realized there really was a God," said Sandee Malina, who schedules medical procedures. "We realized they couldn’t get away with treating people like they did."
Neither Grimm nor Mazzarella nor their attorneys would comment for this story.
The pair has pleaded not guilty to all charges. Their trial is slated for October 2009.
Still stressed and disappointed, Sandee Malina determined last spring that they should move back to Hawaii in April to be with family.
Possessions were sold, the children were taken out of school. The Malinas left good jobs.
And then the day before they were to leave, ATA, the airline they were to fly to Oahu, went bankrupt.
"I thought it was a sign to stay in Las Vegas," Sandee Malina said. "So we got ready to stay in Las Vegas long term."
They were able to stay in the property they rented after their lease-purchase agreement fell apart.
Rodd Malina went back to work in the operating room. But Sandee Malina lost her job as a scheduler for Dr. Julio Garcia, a plastic surgeon. And she hasn’t been able to find another one.
"I feel so terrible about what has happened to these people," Garcia said. "They’re hard-working people who are good for our community and for our economy. There was nothing I could do. Sandee trained her replacement that I hired in good faith."
Recently, the patient flow has slowed down at the outpatient clinic where Rodd Malina worked.
The worsening economy means people are putting off elective procedures, leaving Malina with only two or three days of work each week. What had been a difficult financial situation for the family became intolerable.
Discussions with family and potential employers in Hawaii made the Malinas decide once again to go back to the place they once criticized for not having enough opportunity.
Rodd Malina already has a full-time job lined up, and Sandee has several potential employers who want to talk with her.
Her sister says Sandee’s family can live with her until they get back on their feet.
As she stood near the garage of her rental home last week, Sandee Malina said she hoped she could sell most of her furniture. Whatever she doesn’t sell she said she would give away.
"I can’t help feeling like a failure, but my husband says I shouldn’t feel that way," she said. "We saw Las Vegas as a place of opportunity where if you worked hard, you could live a good life. And we did for a while.
"If I hadn’t lived through this, I wouldn’t have believed it could happen."
Contact reporter Paul Harasim at email@example.com or 702-387-2908.REPORT FRAUD U.S. Attorney Gregory Brower said that anyone who has information about potential mortgage fraud may contact the Southern Nevada Mortgage Fraud Task Force at 584-5555.