New Haven Register (New Haven, CT)
Former CT real estate developer headed to prison
Bob Matthews had ties to Clintons, John Rowland
A former Connecticut real estate developer whose financial fraud reached across the globe is scheduled to be sentenced Monday in federal court, the U.S. Attorney’s office says.
Robert V. Matthews, 65, is expected to be sent to prison for money laundering and tax evasion. The charges stem from “multiple schemes to defraud foreign investors and financial institutions,” federal officials say, with losses to the victims topping $30 million.
“These frauds were widespread and brazen,” U.S. Attorney Vanessa Roberts Avery and Assistant U.S. Attorney John T. Pierpont Jr. wrote in court documents.
A former developer in Waterbury and New Haven, Matthews has ties to former Waterbury Mayor Joseph Santopietro and former Connecticut Gov. John G. Rowland — both of whom were convicted on corruption charges. Matthews was questioned by authorities investigating both politicians, but never was arrested in the cases, according to the New York Times.
Matthews also socialized with more widely known personalities, like Bill and Hillary Clinton, who visited his house during a charitable fundraiser in 1999, according to court documents.
There were no allegations stemming from the fundraiser, but 20 years later, on April 25, 2019, Matthews and his nowex-wife, Maria “Mia” Matthews, pleaded guilty to tax evasion in U.S. District Court in Bridgeport.
Robert Matthews also pleaded guilty to conspiracy to commit bank and wire fraud and illegal money transactions. COVID-19 played a role in the sentencing delay, said Tom Carson, U.S. Attorney spokesperson.
Matthews’ maximum sentence could be as much as 45 years in prison, but guidelines call for him to be sentenced to 155 to 188 months, or 13 to 15 years, Carson said. The judge may go above or below the range, he said.
Saying his client has health problems, is broke and has taken full responsibility for his crimes, his lawyer, David A. Ring, asked for a sentence of 27 months, or 2¼ years, court documents show.
The sentencing is scheduled for noon Monday in the Bridgeport federal courthouse where he pleaded guilty, Carson said. Maria Matthews’ sentencing hasn’t been scheduled yet.
Tony Bennett, Celine Dion ‘part of the club’
According to court documents, Matthews’ crimes focus on real estate in the Washington Depot section of Washington in Litchfield County, Palm Beach, Fla., and in Rhode Island.
The Palm House Hotel development in Palm Beach was a government “EB-5” visa project through which foreign citizens can invest with the goal of getting a green card. Around 2012, Matthews sent potential investors misleading promotional brochures that claimed he had $22 million in equity in the Palm House Hotel when he didn’t own the property, court documents state.
The investment documents also “contain pictures of the defendant with Donald Trump and statements that the PHH (Palm House Hotel) would be an exclusive resort location and attract celebrities based on the fame of the defendant’s wife, Mia Matthews,” an actress. The literature includes pictures of Matthews with the Clintons and Trump, and, coupled with the text, wrongly implied the nationally known figures were on the advisory board, according to the court documents.
Under “Frequently Asked Questions,” the literature suggested former President Bill Clinton, billionaire Bill Koch, Eric Schmidt, former Google CEO and singers Tony Bennett and Celine Dion “will be part of the club,” which also was not true, the documents state.
Millions of dollars of funding came in from around the world, including from China and Iran, the government said. There were 61 foreign investors in the Palm House Hotel, each of whom invested at least $500,000. The overall loss to the investors was at least $30.5 million, court documents stated.
Instead of using the money for the Palm House Hotel, Matthews used it for personal purchases, such as a $5.3 million house, a yacht called “the Alibi,” and cars — including a Maserati, according to the documents.
Two properties on Lower Church Hill Road in Washington Depot were among the purchases, the government said. Matthews then committed more fraud, the court documents stated.
Connecticut fraud
In 2001, Matthews purchased the property at 115 Lower Church Hill Road, along with a nearby vacant lot. He refinanced in 2004 with a different bank and the mortgage was later assigned to J.P.
Morgan Chase, the court documents show.
He sought to refinance the property again in June 2008, but in September 2013, J.P. Morgan Chase foreclosed on the loan and took ownership of the property, according to the documents. Matthews lost money in the market crash of 2008, his lawyer said in a sentencing memo.
Matthews wanted the property back, so he conspired with others to use the foreign investment money and buy back 115 Lower Church Hill Road at a discount during the foreclosure sale through a straw entity — under someone else’s name — so his involvement would be concealed, court documents state. This made a federal tax lien on the property disappear.
The court documents state that Matthews also used an inactive, or “shell,” company owned by his then-wife to spend more than $450,000 of
the foreign investors’ money to buy the property at 105 Lower Church Hill Road as well.
The court documents state that Matthews also sold the property at 105 Lower Church Hill Road and placed the money into company accounts and accounts in the name of his children. He also arranged for $1.14 million in insurance money from flood damage to his Lower Church Hill Road home to be deposited into a business account under his control or into his brother’s business account for his personal use, the court documents state.
‘Unfitting to be human’
According to the court documents, Matthews’ bank fraud dates back to 2007, when he used “significant portions” of the money from a $40 million-plus loan for purposes unrelated to a project called Point Breeze Hotel in Nantucket, R.I.
He also “regularly failed to pay subcontractors for work performed,” the documents stated.
The tax evasion counts stem from him and Maria Matthews moving money around to avoid paying taxes, the documents show.
“Stated differently, the defendant and his wife moved millions of dollars through shell companies, properties and accounts in the name of other individuals to evade their multi-million-dollar tax liabilities. At the time he
was indicted, he had not filed a federal income tax return since 2009 and had not made a single voluntary payment against his tax liabilities,” the documents stated.
The court documents include victims’ statements about the impact of Matthews’ crimes.
“Bob Matthews, his partners and relevant people, acting obnoxiously, unfitting to be Americans, even unfitting to be human being, mercilessly plundered into and squandered the wealth that my family had gifted me!” one victim wrote.
Another said he has endured a decline in his quality of life and a feeling of indebtedness to his family. The fraud also ruined his career and has “shaken up the trust (he) has in the U.S. nation and its people.”
But Ring, Matthews’ the lawyer, said his client “fervently sought to succeed” with the Palm Beach project in particular and hoped “to earn rich profits for everyone involved.”
“Bob accepts full responsibility for what he did — which was fraudulent and criminal,” Ring continued. “But it should be clear that Bob did not act with intent to take the investors’ money and run. It must be remembered that the scheme spun by Bob not only caused the investors to lose roughly half their investments, but led to Bob’s own final financial ruin.”