Feds won't talk about their investigation of Mastro

Bankruptcy court isn't the only forum in which the Michael R. Mastro saga is playing out.

The U.S. Attorney's Office is conducting an investigation of the former Seattle real-estate kingpin, but won't talk about it.

James Frush, a criminal-defense attorney retained by Mastro after the probe began, said his client has been cooperating with investigators. It's unclear just what their focus is, Frush said, but he's working to set them up with former Mastro employees for interviews.

When he first confirmed the government probe in February, Frush, a former federal prosecutor, characterized it as routine. Federal officials were almost required to look at Mastro, he said, given the magnitude of his creditors' losses and allegations against him by state regulators.

The state Department of Financial Institutions charged Mastro last October with violations of state securities law. It settled with him in January: Mastro did not admit guilt, but agreed to accept the agency's proposed sanctions.

When it filed the administrative case, the department charged that Mastro had misled so-called "Friends & Family" investors, providing them with little information and failing to adequately disclose risk.

The state agency contemplates no further action against Mastro, a representative said this past week.