Architect of Massive $420 Million Bank Fraud Scheme Sentenced to 3 Years in Prison

ST. PAUL – Matthew Thomas Onofrio, 34, of Plymouth, Minnesota, has been sentenced to 36 months in federal prison for bank fraud, announced U.S. Attorney Daniel N. Rosen. Over the course of two years, Onofrio devised and carried out a $420 million bank fraud scheme.

Between 2020 and 2022, Matthew Onofrio—a young nurse anesthetist and real estate investor—devised and carried out a massive bank fraud scheme. To carry out his fraud scheme, Onofrio created a real estate investment program whereby Onofrio 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.

Onofrio promoted his own financial success and real estate investment strategies in online professional networking groups and on a popular podcast geared towards 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.

Onofrio’s investors did not have the kind of money (typically, 30% of the purchase price) that was necessary to purchase the multi-million-dollar properties that Onofrio offered. To solve this problem, Onofrio counseled his investors defraud the banks.

Onofrio helped investors prepare fraudulent personal finance statements falsely indicating they had enough cash to cover the requisite down payment. When the lending banks inevitably requested proof of funds, Onofrio temporarily wired the money into his investors’ bank accounts, making it appear they actually had the money.  If the banks asked about the source of the funds, Onofrio instructed his investors to tell the banks it came from other investments, or they had family money. Onofrio would also loan his investors money 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.

Over the course of approximately two years, Onofrio completed 68 deals involving $420,564,795 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 $35,745,252 from his fraudulent scheme before being caught.

U.S. District Judge Susan Richard Nelson sentenced Onofrio to 36 months in prison, followed by 2 years of supervised release, and ordered him to play $5,398,641 in restitution.  In handing down her sentence, Judge Nelson identified Onofrio as the “ringleader and architect of a vast bank fraud.” Judge Nelson explained that she wanted to send a message to other would-be fraudsters that there is no such thing as a get-rich-quick-scheme—at least not a legal one.

This case is the result of an investigation conducted by the FBI, the IRS, and the Federal Deposit Insurance Corporation – Office of Inspector General.

Assistant U.S. Attorney Matthew C. Murphy prosecuted the case.