Matthew Thomas Onofrio, a Minnesota real estate investor who previously worked as a nurse anesthetist, was sentenced to 36 months in federal prison for carrying out a $420 million bank fraud scheme.
According to the charges against him, Onofrio used online professional networking groups and the “Bigger Pockets” podcast to promote himself, leveraging those platforms to create a reputation as a real estate expert. Onofrio devised a real estate investment program whereby he would enter into purchase agreements for commercial properties and assign them to novice “investors” at highly inflated prices. Onofrio then coached his investors to lie to banks to obtain loans they could not afford based on false information.
However, Onofrio’s investors lacked the funds (typically, 30% of the purchase price) that was necessary to purchase the multi-million-dollar properties that Onofrio offered. To solve this problem, Onofrio advised his investors on how to defraud the banks. When the lending banks requested proof of funds, Onofrio temporarily wired the money into his investors’ bank accounts, making it appear they had the money. Onofrio would also loan money to his investors to cover the down payment but would not include the loans on the investors’ personal financial statements or record the promissory notes as a second mortgage on the property to keep it hidden from the banks.
Between 2020 and 2022, Onofrio completed 68 deals involving $420 million in fraudulently obtained bank loans. Although many of Onofrio’s investors stopped paying on their promissory notes following Onofrio’s indictment in this case, Onofrio netted at least $35 million from his fraudulent scheme before being caught.
In addition to his prison term, Onofrio was sentenced to two years of supervised release, and ordered him to play $5.3 million in restitution.
