Ex-CT politically connected developer gets 5 years in prison for real estate swindles in three states
Politically connected real estate developer Robert Matthews was sentenced to more than five years in prison Monday for tens of millions of dollars of frauds in Connecticut, Massachusetts and Florida.
The 65-year old Matthews, now a resident of West Palm Beach, was charged with the crimes of conspiracy, money laundering, and tax evasion for real estate swindles that the government argued were responsible for losses to banks and investors of more than $30 million.
Matthews, who’s real estate deals were attracting law enforcement attention in Connecticut more than three decades ago, faced 15 years in prison under the advisory sentencing guidelines used by federal courts. His lawyer argued that a two-year sentence would be appropriate, an unusual acknowledgment by the defense to the scale of the financial damage Matthews inflicted.
At the end of a four-hour sentencing hearing in Bridgeport, the judge imposed a sentence of a total of 65 months.
Matthews previously had pleaded guilty to a variety of frauds associated with resort hotel projects on Nantucket and in West Palm Beach, and a luxury home in Washington Depot in Litchfield County.
He admitted financing the Florida and Connecticut deals with a scheme that raised money under a state department visa program allowing foreign nationals legal entry to the U.S. by investing at least $500,000 in a U.S. development projects that employ 10 or more people.
In Matthews case, he collected $500,000 each from 61 foreign nationals, ostensibly to redevelop a run down Palm Beach resort, the Palm House Hotel, that Matthews said would rival former President Donald Trump’s nearby Mar-a-Lago resort.
Prosecutors say in court filings that the foreign investors, many of whom were trying to reach the U.S. to educate children, lost more than $30 million. Matthews, they said, spent money on a 151-foot yacht called the Alibi and charity balls for the Palm Beach glitterati, while paying off loans, forestalling foreclosures on other properties and underwriting another crooked real estate deal in Washington Depot, in Litchfield County.
Matthews has been a longtime player in political and real estate circles in Connecticut and a player whose work has been followed for just as long by federal law enforcement.
He was interviewed by FBI agents as long ago as the 1990s about a $25,000 cash payment to former Waterbury Mayor Joseph Santopietro. Matthews, who was trying to develop downtown property at the time, was not charged. Santopietro was ultimately accused, convicted and sentenced for taking payoffs from bankers and other real estate developers.
Mathews surfaced repeatedly during the administration of former Gov. John G. Rowland. He and partner Wayne Pratt, then a well-known Woodbury antiques dealer, agreed to rent – and later, buy for an amount far above the market rate- a Washington, D.C. condominium Rowland was trying to unload. Matthews later complained that he got taken to the cleaners when Rowland changed him $5,000 for the appliances.
Matthews and Pratt were in the news not long after when they offered for sale an original copy of the Bill of Rights they had acquired. The deal fell apart when it was determined the document had been filched from the North Carolina archives by a union soldier during the Civil War.
Under the sentence guidelines used in federal court, the 65-year old Matthews could have faced from 12 to 15 years in prison. He previously pleaded guilty to a dozen fraud, conspiracy, money laundering and tax crimes.
The offenses date to 2007, when Matthews is accused of cheating a banking lender of millions of dollars ostensibly borrowed to develop a resort on Nantucket. As was the case with the Palm House Hotel between 2012 and 2018, Matthews is accused of spending much of the money on himself. Prosecutors said Matthews later uses some of the Palm Beach visa money in what was a Washington Depot bank fraud in 2014.
“While running these various scams, the defendant evaded at least $2,750,000 in tax, penalties and interest based on his failure to pay taxes in 2005 and 2007,” the prosecution said in a court filing. “Using shell companies and bank accounts in the names of other people, the defendant put real property, personal property, and cash assets beyond the reach of the Internal Revenue Service.”
The Palm House Hotel was Matthews’ most audacious project. In the prospectus provided to foreign investors, he described himself as rich and famous, and he is shown in posed photographs with Trump, as well as former President Bill Clinton and his wife Hillary.
Matthews boasted in the Palm House Hotel promotional material of having a “World Renown Advisory Board,” with Trump and the Clinton’s as members. In fact, neither Donald Trump nor the Clintons were on the board, the government said.
