EB-5 developer in Palm Beach pleads guilty to money laundering and tax evasion charges

Robert Matthews once claimed that Donald Trump and President Bill Clinton would be on the project’s advisory board

Apr.April 25, 2019 06:20 PM
Bob and Mia Matthews (Credit: PRWeb)

Bob and Mia Matthews (Credit: PRWeb)

Robert Matthews, the developer of the Palm House Hotel, pleaded guilty on Thursday in federal court to money laundering and tax evasion charges for defrauding foreign EB-5 investors in the Palm Beach condo-hotel project.

Matthew’s wife Maria “Mia” Matthews also pleaded guilty Thursday to tax evasion in federal court in Bridgeport, Connecticut.

Matthews was the developer of the project at 160 Royal Palm Way that began soliciting EB-5 investment in 2012.

EB-5 is a federal program where investors can get a green card in exchange for investing at least $500,000 in a U.S. enterprise and creating at least 10 jobs. The development group was able to solicit more than $40 million of EB-5 money for the Palm House development.

The development group assured investors that the project would be completed in less than a year and that their money would be protected in an escrow account with a bank. It also claimed that Donald Trump, Bill Clinton and Celine Dion would be on the condo-hotel’s advisory board.

In reality, no such advisory board existed and much of the money was instead diverted for the personal use of the Matthewses, according to federal prosecutors.

The Matthewses used the funds to pay off their credit card debts and to purchase two properties located in Washington Depot, Connecticut. One of the Washington Depot properties was a property that Robert Matthews had previously lost in foreclosure, according to federal officials.

The case became a key example of the problems and challenges facing the federal EB-5 program. Forty-four investors have filed a lawsuit in Palm Beach County Circuit Court alleging fraud against Robert Matthews along with the EB-5 Regional Center for the project, the South Atlantic Regional Center, and its director, whom they claim misled them into investing in the project.

About 80 EB-5 investors, largely from China and Iran, lost their entire $500,000 investment in the project and never received a green card.

Robert Matthews pleaded guilty to one count of conspiracy to commit bank fraud and wire fraud, which has a maximum sentence of 30 years; one count of illegal monetary transactions, that has a maximum sentence of 10 years; and one count of tax evasion, that has a maximum sentence of five years.

Maria Matthews pleaded guilty to one count of tax evasion.

In their guilty plea, Robert and Maria Matthews also said they sought to evade paying federal income tax they owed for the 2005 and 2007 years.

Both are currently released on bond, awaiting sentencing.

Others involved in the case have already pleaded guilty. Gerry Matthews, Robert’s brother, pleaded guilty to one count of conspiracy to commit wire fraud. The contractor of the project, Nick Laudano of Boynton Beach, pleaded guilty to one count of conspiracy to commit bank fraud and one count of illegal monetary transactions.

In March, a federal judge approved the sale of the still unfinished Palm House Hotel to a U.S. affiliate of London + Regional Properties for $39.6 million.

Related Articles

Harbourside Place in Jupiter

More EB-5 investors allege fraud at Jupiter development

Joseph Menaged with his units at Faena House and One57 (Credit: Facebook, Redfin, StreetEasy)

Father of “Property Wars” star pleads guilty to bank fraud

Georgina Pineda and King David Condominium at 17555 Atlantic Boulevard (Credit: Realtor)

Property manager stole HOA money, then gambled it away: police

2965 West Corporate Lakes Boulevard and Black Creek Group CEO Raj Dhanda (Credit: Google Maps, Blue Vault)

TIAA sells Weston warehouse for $33M

Daily Digest Miami

Moishe Mana sells Hibiscus Island home for $12M, CitizenM scores $48M loan to build Brickell hotel

Glenn Straub and the Palm House Hotel

Glenn Straub loses appeal on Palm House sale

Robert Matthews and Palm House Hotel

Embattled Palm House developer Robert Matthews agrees to federal securities charges

Robert Matthews and the Palm House Hotel (Credit: NAIOP)

Palm House Hotel developer will use taxpayer money to pay legal bills: report