Commercial real estate investor pleads guilty in $35.7M bank fraud case – InForum

Commercial real estate investor pleads guilty in .7M bank fraud case – InForum

ROCHESTER — Matthew Thomas Onofrio, a real estate investor who owns multimillion-dollar properties in Rochester, recently pleaded guilty to one count of federal bank fraud and forfeited $35.7 million stored in a Rochester bank.

As part of a plea agreement, Wisconsin-based Onofrio pleaded guilty to one count of bank fraud involving a Minnesota property in St. Cloud on July 10 in the U.S. District Court in Minneapolis.

He was originally indicted by a grand jury

and charged with three counts on Nov. 17, 2022.

Onofrio, who was trained as a nurse anesthetist at Mayo Clinic, pleaded guilty to defrauding MidCountry Bank in Bloomington, whose deposits were insured by the Federal Deposit Insurance Corp.

Operating under the corporate name Northwoods Management LLC, Onofrio “by means of false and fraudulent pretenses, representations, promises, and omissions of material fact, did knowingly and intentionally cause the issuance of a wire transfer in the amount of $3.25 million to an account of an investor applying for a loan to purchase property in Saint Cloud, Minnesota…” according to the plea agreement.

The wire transfer to the account of an investor listed as “C.F.” was in support of an application for a $9.7 million loan to purchase property on June 3, 2021.

Two other charges involving wire transfers of $430,000 to purchase property in Sauk Centre on Aug. 11, 2021, and $9.5 million to purchase property in Elk River were dismissed as part of the plea deal.

The plea agreement detailed that between 2019 and August 2022, Onofrio “devised and executed a scheme” to defraud banks in Minnesota, Wisconsin and other states. The loans were obtained for an investment program marketed by a company created by Onofrio called Northwoods Management LLC, which sometimes operated under the name of Wild Moose Ventures.

“The scheme falsely represented the investors’ creditworthiness in several ways. Onofrio directed investors to claim in personal financial statements provided to lenders that the investor had sufficient cash on hand to fund a down payment on the property, even though the investor did not actually have such funds,” according to the court documents.

He also used a scheme called “seller carry” to lend investors funds for a down payment, but the debt was not disclosed to the bank.

Prosecutors calculate that Onofrio received at least $35.74 million from his illegal schemes. He agreed to forfeit $35.74 million to the United States held in an account at Premier Bank in Rochester.

The penalties for bank fraud include:

  • Up to 30 years in prison
  • A fine of $1 million or twice the gain from the offense
  • Mandatory restitution
  • A term of supervised release of up to five years

Onofrio is scheduled to be sentenced on Jan. 16, 2024.
While none of the charges included any deals done in Olmsted County, Onofrio has been involved with the purchase and sale of several large commercial properties in Rochester, Stewartville and possibly other nearby communities.

Under the name Moose Enterprises LLC,

he paid $7.7 million for the historic Massey and Blakely buildings

at 16 Second St. SW and 210 First Ave. SW in downtown Rochester in January 2020. Moose Enterprises is still the owner of those buildings.

Onofrio was also involved with

the $12 million purchase of the City Centre complex

at 310 S. Broadway in 2020, which he later sold for $14 million in 2021.

He was involved in the purchase and sale of a northwest Rochester retail center at 3801 Marketplace Drive NW in May 2021. He purchased it for $3.63 million and sold it four days later for $4.22 million.

Onofrio also owns the Flats 55 apartment complex in Stewartville.

He purchased it for $10.5 million

under the name of Stewartville Flats LLC at the end of 2021.

In addition to buying and selling property, Onofrio aggressively marketed himself as an educator and adviser who can teach others how “to create passive wealth through commercial real estate investments and help to break the stigma often associated with big commercial deals.”

He was a popular guest on many real estate podcasts. Before his indictment, Onofrio was promoting a book that he wrote, called “Triple Net Investing — Finding Freedom with Commercial Real Estate’s Best-Kept Secret.” It was expected to be published in early 2024.

Jeff Kiger writes a daily column, “Heard Around Rochester,” in addition to writing articles about local businesses, Mayo Clinic, IBM, Hormel Foods, Crenlo and others. The opinions of my employer do not necessarily reflect my opinions. He has worked in Rochester for the Post Bulletin since 1999. Send tips to jkiger@postbulletin.com or via Twitter to @whereskiger . You can call him at 507-285-7798.

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