West Palm Beach developer, Robert V. Matthews, was accused by the Security and Exchange Commission of intentionally defrauding foreign investors. According to the SEC, Matthews attempted to elicit funds for a redevelopment project in West Palm Beach that was never completed. Matthews has since been charged with felony wire fraud and more. The SEC also filed civil charges against Matthews during which Matthews admitted to some of the allegations against him.
According to the SEC, Matthews is permanently enjoined from violating SEC regulations, which may sound odd because isn’t everyone? Furthermore, the SEC is contemplating whether or not Matthews should be disgorged of any and all funds that he fraudulently acquired. This is also odd because shouldn’t anyone?
Palm House Hotel
In the middle of this mess is the Palm House Hotel, which was recently sold for $40 million after years of being tied up in lawsuits. The development on the project was never finished. The sale took place after a federal bankruptcy judge ordered the property liquidated on behalf of Matthews’ creditors.
Prosecutors claim that Matthews defrauded foreign investors under the U.S. Immigration EB-5 program which allows those willing to invest their own capital in the United States to get expedited green cards. Matthews told (mostly) Chinese investors that the property would be turned into a luxury hotel and resort but nothing ever materialized.
The SEC filed several charges and civil lawsuits against Matthews and his partner Joseph J. Walsh, Sr., who they claim abandoned his right to defense after he fled to China at an unknown address. Together, the SEC claims that these men defrauded 88 Chinese nationals out of more than $40 million. The court has yet to issue a response to the SEC’s request for a default judgment against Walsh.
Material Misrepresentations and Wire Fraud
Matthews in a plea agreement admitted to knowingly defrauding EB-5 investors by “materially misrepresenting” his interest in the Palm House Hotel. According to the SEC, Matthews and Walsh led investors to believe that their investment capital would be used solely for the development of the Palm House Resort. However, Matthews misappropriated the investor’s money in the purchase of a home for himself.
Matthews used a shell company to run interference between the investment fund that he was fraudulently managing and the bank that sold the home valued at $2.6 million. The home was located in Connecticut which is where Matthews faced charges.
Matthews’ wife is also facing charges of tax evasion in Connecticut. Meanwhile, Walsh is nowhere to be found and a third player, attorney Leslie R. Evans is awaiting trial in Connecticut on charges of wire fraud and bank fraud, all related to the Palm House.
Talk to a West Palm Beach Criminal Defense Attorney
If you’ve been accused of defrauding Chinese investors, the West Palm Beach criminal attorneys at the Skier Law Firm, P.A. can help defend you from the charges or at least mitigate the damage to your personal and professional reputation. Talk to us today for more details.
Resource:
palmbeachdailynews.com/news/20190919/court-in-securities-fraud-case-rules-against-former-palm-beach-developer-with-his-consent