David Saks: Real Estate Investment Partner Indicted for Alleged Fraud

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Real Estate Investment Partner Indicted for Alleged Fraud

Real Estate Investment Partner Indicted for Allegedly Cheating at Least 50 Mostly Chicago-Area Investors of $10 Million

U.S. Attorney’s Office May 02, 2014
  • Northern District of Illinois (312) 353-5300

CHICAGO—A former Chicago-area real estate investment partner was indicted on federal charges alleging that he fraudulently obtained more than $10 million from more than 50 investors, many of whom lived in the Chicago area, and misused the funds he obtained from them as well as lenders. The defendant, MATTHEW STOEN, was a founder of Stone Rose, LP, and effectively was its managing general partner.

Stoen, 35, of Wayzata, Minnesota and formerly of St. Charles and Chicago, 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.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.




David Saks



Time&Temp Memphis

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Comment balloon 2 commentsDavid Saks • May 04 2014 12:18AM

Comments

We have lots of fraud here in Vegas also. :(

Posted by Jimmy Chickey, Realtor, Nationally Recognized Author, Teacher (Keller Williams Realty Southwest) almost 6 years ago

Real estate fraud is pandemic, Jimmy. There's less media saturation about it because of the public burnout on negative foreclosure and subprime reporting. Nice to hear from you.

Posted by David Saks ((retired)) almost 6 years ago

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