Kansas City man gets 8 years in prison for $6M scheme that defrauded dozens, feds say
A Kansas City man was sentenced Wednesday to more than eight years in federal prison for defrauding dozens of victims in a $6 million investment fraud scheme, according to prosecutors.
Matthew R. Peterson, 51, was sentenced to eight years and one month in federal prison. He was also ordered to pay more than $2.5 million in restitution to his victims, according to the U.S. Attorney’s Office in the Western District of Missouri.
Peterson admitted to operating the Ponzi scheme from 2012 to 2016, getting at least 37 victims to invest about $6 million in sporting wagers. He claimed to be a sports betting expert and said their investments were “yielding large returns,” prosecutors said.
“Peterson, for the most part, did not invest funds on behalf of the investors,” federal prosecutors said in a news release after the sentencing. “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.”
Additionally, Peterson diverted about $560,000 of the investors’ funds for personal use, which included luxury vacations with his family, according to prosecutors.
The financial harm done to some victims — who invested between $1,000 to $100,000 — was significant. And financial institutions and credit card companies incurred losses of more than $460,000 because of the scheme, according to court records.
In September, Peterson pleaded guilty to one count of bank fraud and one count of money laundering in the case, which was investigated by the FBI.
