Real Estate Investment Partner Indicted for Allegedly Cheating Investors of $10M

Allison Tussey —  May 6, 2014 — Leave a comment

Matthew Stoen, 35, Wayzata, Minnesota, and formerly of St. Charles and Chicago, Illinois, was indicted on federal charges alleging that he fraudulently obtained more than $10 million from more than 50 investors and lenders.

The defendant was a founder of Stone Rose, LP, and effectively was its managing general partner.

Stoen was charged with four counts of mail fraud and two counts of wire fraud in an indictment returned by a federal grand jury on Wednesday and announced today. He will be arraigned on a date to be determined in U.S. District Court in Chicago.

The indictment also seeks forfeiture of more than $10 million in alleged fraud proceeds.

According to the indictment, Stoen falsely represented to investors and lenders his personal background and financial condition, including claiming that he was the beneficiary of a trust fund, which he knew was false. He allegedly carried out a financing fraud scheme to benefit himself by fraudulently raising millions of dollars through the offer and sale of limited partnership interests and through loans.

Stoen fraudulently obtained and retained these funds by making false representations regarding the intended use of the funds raised for Stone Rose, the terms of Stone Rose’s real estate transactions, Stone Rose’s financial condition, his personal financial condition, and his interest in Stone Rose real estate transactions. Stoen misappropriated Stone Rose funds for his own benefit, and concealed his scheme by creating and distributing to investors a false and misleading financial review of Stone Rose, the indictment states.

Stoen allegedly represented to investors and lenders that funds invested in Stone Rose would be used for real estate investment projects in the Kansas City area as well as certain Stone Rose fees and expenses, knowing that he intended to misappropriate a portion of the funds for other purposes, including for his own use and benefit.

Each count of mail and wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The government is being represented by Assistant U.S. Attorney Kenneth Yeadon.

Allison Tussey

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