A Kansas City, Missouri, man was sentenced in federal court for engaging in a $6 million Ponzi scheme that defrauded dozens of victim investors.
Matthew R. Peterson, 51, was sentenced by U.S. District Judge Howard F. Sachs to eight years and one month in federal prison without parole. The court also ordered Peterson to pay $2,516,010 in restitution to his victims.
On Sept. 10, 2020, Peterson pleaded guilty to one count of bank fraud and one count of money laundering.
Sports Wagering Investment Fraud
Peterson admitted that he operated an investment fraud scheme from 2012 to November 2016. During this scheme, Peterson persuaded at least 37 victims to invest approximately $6 million into sporting wagers.
Peterson lied to prospective investors about being an expert in sports betting in order to carry out his investment fraud scheme. Peterson created fictitious spreadsheets, financial statements, and betting reports that indicated the investments were yielding large returns. Peterson, for the most part, did not invest funds on behalf of the investors. Instead, Peterson perpetrated a multimillion-dollar Ponzi scheme through which he fraudulently transferred new investor money to earlier investors, falsely representing these payments as profits earned on their funds invested with him. Peterson used about $3.3 million of the approximately $6 million obtained from investors to make Ponzi-type payments to existing investors.
Peterson spent approximately $565,000 of investor funds on luxury vacations for himself and his family, personal gambling, retail, automobiles, credit card payments, a house, and made cash withdrawals of more than $90,000 of investor money.
Peterson’s widespread criminal activity caused significant financial harm to numerous victims, who invested amounts ranging from $1,000 to $100,000. One of the investors, identified in court documents as T.C., went into business with Peterson. T.C. liquated his 401(k) retirement account and gave the net proceeds to Peterson. Peterson used T.C.’s personally identifiable information without T.C.’s knowledge or consent to obtain an American Express card. Peterson also made additional charges to the card, charging over $248,862 on this card without T.C.’s knowledge. Due to his scheme, financial institutions and credit card companies also incurred a loss of approximately $461,000.
Church Travel Fraud Scheme
According to court documents, Peterson also used his business to establish credibility within his church community as someone with great connections.
Peterson owned and operated AIS Travel, which attempted to find discounted deals for people who wanted to travel. Peterson approached his pastors about helping the church save money with his travel business. Peterson requested the church staff promote his business to church members and, in return, he would donate a portion of the profits to the church.
The pastors declined Peterson’s proposal but told him they would consider using his business for church staff travel. In November 2016, Peterson approached church staff with a proposal that they should hold their staff retreat in Cancun, Mexico. The cost for approximately 20 people would be $18,000. The church paid Peterson over $16,000 for the airline tickets and room reservations before the date of travel. However, upon arrival at the airport, the church group learned that the tickets had never been purchased, and no reservations were made.
This case was prosecuted by Assistant U.S. Attorney Rudolph R. Rhodes IV. It was investigated by the FBI.