CT real estate investor faces lengthy prison sentence for fraud

Robert V. Matthews’ luck may have finally run out, as the politically connected real estate speculator faces a potential lengthy prison sentence after evading federal investigators for three decades. 

Matthews is scheduled to appear in U.S. District Court, where he could be sentenced to up to 15 years in prison for bank and real estate frauds — which resulted in tens of millions of dollars of losses for investors — across Florida, Massachusetts, and Connecticut, the Hartford Courant reported.  

One of the central schemes involved Matthews collecting $500,000 from 61 foreign nationals under the pretense of redeveloping a dilapidated Palm Beach resort called the Palm House Hotel. 

He promised investors that the project would rival Donald Trump’s Mar-a-Lago resort and included false claims in promotional material suggesting that he had a “World Renown Advisory Board” that included Trump and the Clintons, though the former presidents were never involved.

However, federal prosecutors allege that Matthews diverted the funds, using them for personal luxuries like a 151-foot yacht named the Alibi, and organizing charity balls for Palm Beach’s elite. The foreign investors, who sought legal entry to the U.S. and education opportunities for their children, lost over $30 million in the scam.

Matthews has been on the radar of federal law enforcement for years. He was questioned by the FBI in the 1990s regarding a cash payment to a former Waterbury Mayor, but no charges were brought against him. He has also been associated with former Gov. John G. Rowland, with controversial dealings related to a Washington, D.C. condominium and an attempted sale of an original copy of the Bill of Rights that was later found to be stolen.

The current charges against Matthews involve a dozen fraud, conspiracy, money laundering, and tax crimes dating back to 2007. He was accused of defrauding a banking lender in the Nantucket resort development scheme and using the Palm Beach visa money for bank fraud in Washington Depot.

Federal prosecutors say Matthews evaded over $2.7 million in taxes by using shell companies and other tactics to hide real estate, personal property, and cash assets from the IRS.

“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.”

In his defense, Matthews claims that his development ambitions were genuine, but the Great Recession of 2008 derailed his plans, and he never fully recovered. He cites divorce and ill-health as additional challenges in his life.

“Throughout his life, Bob has always dreamed big and lived as if the universe would shine favor on him at every turn, no matter how dark the clouds,” his lawyer, David Ring, wrote. “Obviously, that full-sails-ahead approach to life has not ended well for Bob. He now finds himself a man who dreamed big, gambled bigger, took for himself what was not his, and, as a result, has lost nearly everything — his family, his home, his life’s savings, and now, likely, a portion of his remaining years.”

Matthews’ most ambitious project, the Palm House Hotel, involved false claims in promotional material, including suggesting that he had a “World Renown Advisory Board” that included Trump and the Clintons, though the former presidents were never involved.

— Ted Glanzer