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Originally published October 30, 2012 at 11:39 AM | Page modified October 31, 2012 at 12:38 PM

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Mastros’ $1.4M diamonds now reportedly in France

But the whereabouts of the $1.4 million in jewelry remain unclear.

Seattle Times business reporter

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They have been living LAVISHLY off of other people's money. Ruined by circumstances? ... MORE
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Michael R. and Linda Mastro have not sold the enormous diamond rings that have played a central role in their bankruptcy and criminal cases, Michael Mastro’s Seattle lawyer says.

The rings, valued at $1.4 million, are in France, James Frush said Tuesday.

But they aren’t in the Mastros’ possession and were not in the apartment in the village of Doussard at which the couple was arrested last week, he said.

However, the rings may be in the Mastros’ control, Frush added. He would provide no additional details.

Frush said his information came from the Mastros’ French lawyer, Thomas Terrier, who in turn got it from the Mastros.

James Rigby, the court-appointed trustee representing creditors in Michael Mastro’s massive bankruptcy proceeding, was skeptical.

“These guys have not proven to be exactly forthright and honest in the past,” he said of the Mastros.

They could be attempting to use information about the rings as a bargaining chip, Rigby added.

Michael Mastro, a longtime Seattle real-estate magnate, and his wife disappeared in June 2011 after a federal bankruptcy judge ordered them to turn over the rings, which sport diamonds of 27.8 and 15.93 carats.

The judge later ruled the rings rightfully belong to the unsecured creditors Rigby represents.

The Mastros are in a Lyon prison awaiting a Nov. 7 court hearing on a bid to be freed while U.S. authorities seek to extradite them. They have been indicted by a federal grand jury in Seattle on 43 counts of bankruptcy fraud and money laundering, and have indicated they intend to fight extradition.

Frush said neither he nor Terrier knows where the rings are.

Frush also said Terrier will argue the Mastros should be freed from prison in part because of Michael Mastro’s age — 87 — as well as the serious head injury he suffered in February 2011 and Linda Mastro’s health problems.

“Their age and mental condition are factors the French court will consider,” he said. Linda Mastro is 62.

The French court also will be told the rings haven’t been sold, Frush said.

Michael Mastro’s 40-year-old real-estate development and lending business collapsed when the real-estate market tanked.

He was pushed into bankruptcy in 2009, and his debts to unsecured creditors have been estimated at $250 million.

Eric Pryne: epryne@seattletimes.com or 206-464-2231

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