Rochester-Linked Investor Sentenced in $420M Bank Fraud Scheme
St. Paul, MN (KROC-AM News) - A real estate investor with ties to Rochester has been sentenced to prison in connection with what federal prosecutors described as a $420 million bank fraud scheme.
According to the U.S. Attorney for Minnesota, 34-year-old Matthew Thomas Onofrio was the architect of a massive fraud scheme that involved a real estate investment program that would enter into purchase agreements for commercial properties and then assign them to novice investors at highly inflated prices. He was accused of coaching those investors to lie to banks to obtain loans they could not afford based on false information.
Prosecutors: Scheme Involved 68 Real Estate Deals
It was alleged that he helped investors prepare fraudulent personal financial statements and then temporarily wired money into their bank accounts to make it appear they had the funds needed for down payments on the properties. Prosecutors say that over the course of two years, Onofrio completed 68 deals involving more than $420 million in fraudulently obtained bank loans.
Self Promotion on Social Media
Federal prosecutors say he “promoted his own financial success and real estate investment strategies in online professional networking groups and on a popular podcast geared toward aspiring real estate investors, called Bigger Pockets. Onofrio leveraged those platforms to create a reputation as something of a real estate savant, which attracted more investors.”
A news release states that, following his indictment in the case, many of the investors stopped paying on their promissory notes, but Onofrio was still able to fraudulently obtain nearly $36 million from a Bloomington bank before he was caught.
Onofrio has been sentenced to three years in federal prison followed by two years of supervised release. He has also been ordered to pay almost $5.4 million in restitution.
Rochester Connections
News reports indicate Onofrio was a nurse anesthetist at Mayo Clinic and owned several commercial properties in the Rochester area.
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