March 20, 2018

Flamboyant '90s New Haven real estate mogul charged in alleged Florida real estate scam

PHOTO | COURTESY OF PALM BEACH DAILY NEWS
PHOTO | COURTESY OF PALM BEACH DAILY NEWS
Robert V. Matthews

Few flew higher in 1990s New Haven and Connecticut than flamboyant real estate investor and businessman Robert V. Matthews. A charming, photogenic whiz kid who counted then-Gov. John G. Rowland as a close friend, Matthews made millions buying and selling properties and businesses in New Haven and the region, often with state and local assistance.

Last week, the flashy millionaire who dominated New Haven's business scene in the 1990s and early 2000s fell to earth in dramatic fashion. Federal authorities charged him and another man in an alleged Florida real estate scam that reportedly used the promise of green cards to defraud well-off Chinese and Iranian investors of millions of dollars.He faces fraud and money laundering charges that could send him to prison for the rest of his life.

On Monday, Matthews, 60, appeared in court, his hands and feet shackled, after spending the weekend in detention, according to the Palm Beach Daily News. A federal magistrate ordered him to surrender his passport and released him on the condition he remain at his seaside Palm Beach mansion while his family seeks to secure a $500,000 personal surety bond, the paper reported.

The indictment alleges that Matthews and others lured well-heeled Chinese and Iranians into investing in Palm House, a Palm Beach real estate project, with the promise of obtainng EB-5 visas. The visas give foreigners and their families the right to live in the United States for an investment of at least $500,000 that creates a minimum of 10 jobs, according to court papers.

Matthews, however, never used the funds for the project, instead allegedly diverting them to pay credit card bills, help buy a 151-foot yacht and purchase two Litchfield County properties that he had earlier lost to foreclosure, according to the indictment.

A related civil lawsuit filed in 2016 charges that Matthews and more than 30 co-conspirators bilked the mostly Chinese and five Iranian investors of $50 million.Their pitch included false statements that Donald Trump, not yet president, and former President Bill Clinton would sit on the development's advisory board and that celebrities such as Celine Dion, Tony Bennett and Bill Koch were already members of its club, the suit alleges.

Instead of being spent on the long-delayed project, which remains unfinished, the funds were "pillaged for the personal pleasure of the conspirators," the suit charges. It accuses the defendants of allegedly using the money for, among other things, expensive cars, vacations and "other accoutrements of a luxury life." None of the investors, who number more than 50, received the promised visas, the suit says.

While Matthews earned widespread praise during his Connecticut years – New Haven officials credited him with lowering the city's commercial vacancy rate and lauded his charity work – controversy and the whiff of scandal were never far behind.The Massachusetts native, who began his career doing real estate deals in Waterbury in the 1980s, tangled in court with creditors and former business partners who accused him of misdeeds. In one instance, an ex-fiance sued him, alleging he had looted her family's bank accounts to the tune of $5 million (Matthews dismissed it as a misunderstanding and returned the money).

His deals, meanwhile, often relied on millions in state aid or other assistance, raising eyebrows and leading to charges of favoritism from the administration of his friend Rowland. In perhaps his most famous deal, he won approval from a state utility committee dominated by Rowland appointees to buy the former Southern New England Telephone Company building in downtown New Haven for $500,000 and later sold it for $27 million.

Matthews' dealings with the state and relationship with Rowland came under scrutiny during the 2004 investigations that eventually led to the then-governor's resignation, conviction and imprisonment. Matthews escaped indictment in spite of lingering questions on a number of deals and faded from the New Haven scene, moving to Florida. In 2016, his company sold the One Long Wharf office building, long a flagship of his holdings in the city.

Arrested with Matthews was Leslie R. Evans, 70, also of Palm, Beach, Fl., who was released in lieu of $250,000 bond.

Earlier this month, Matthews' brother Gerry Matthews, 57, of Middlebury pled guilty to one count of conspiracy to commit wire fraud and Nicholas Laudano, 48, of Boynton Beach, Fl. admitted to one count each of conspiracy to commit bank fraud and illegal money transactions in the case, according to the U.S. attorney.

Laudano, a New Haven area native, is a contractor who also has operated pizza restaurants in Florida and New Haven, including Ah-Beetz on Temple Street, which has since business gone out of business..

Lawyers for none of the men could be reached for comment.

Mathews will soon find himself back in the Elm City, where he was once seen as a star and a savior. Because money from the alleged scam was sent to Connecticut, the case will be adjudicated here, meaning Matthews will have to appear in U.S. federal court in New Haven for his arraignment, said Tom Carson, spokesman for the Connecticut U.S. Attorney's Office.

No date for the arraignment had been set as of Tuesday, Carson said.

Christopher Hoffman can be reached at news@newhavenbiz.com

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