Inside the Shocking Real Estate Scam: How This 'Ringleader' Scammed Millions—And What Happens Next Will Shock You!

ROCHESTER — Matthew Onofrio, a former nurse anesthetist at the Mayo Clinic, was sentenced to three years in prison this week for his role as the “ringleader and architect of a vast bank fraud” scheme. In addition to the prison time, he has been ordered to pay $5.39 million in restitution to a Bloomington, Minnesota bank, highlighting the financial repercussions of his fraudulent activities.

U.S. District Judge Susan Richard Nelson emphasized the need for a strong message to deter potential fraudsters, stating that there is no path to quick wealth through deceit. Onofrio’s sentencing will commence on February 10, 2024.

Onofrio’s attorney, Marsh Halberg, had argued for a lesser sentence of home detention or community confinement, while federal prosecutors recommended a six-year prison term. Comparatively, the average prison sentence for similar crimes stands at five years, underscoring the severity of Onofrio’s actions.

Onofrio pleaded guilty to one count of bank fraud in connection with a property in St. Cloud, Minnesota, on July 10. His legal troubles began with a grand jury indictment on three counts on November 17, 2022. This case culminated in a complex web of fraud involving a staggering $420 million in fraudulent bank loans across 68 commercial real estate deals over approximately two years.

Although none of the properties listed in the indictment were located in Olmsted County, Onofrio was notably active in Rochester’s commercial real estate market. As part of the case, authorities seized a $35 million bank account he held with Premier Bank in Rochester. Under the business name Moose Enterprises LLC, Onofrio purchased the historic Massey and Blakely buildings for $7.7 million in January 2020. These buildings, which were under the control of a court-appointed receiver, sold for $4.5 million in 2024.

In addition, Onofrio acquired the Flats 55 apartment complex in Stewartville for $10.5 million at the end of 2021, which later sold for $9.35 million. His portfolio included other notable properties, such as the City Centre complex at 310 S. Broadway and the Tile Superstore & More complex at 2411 Seventh St. NW in Rochester, as well as the Wabasha Marina & Boatyard. Onofrio purchased the City Centre complex for $12 million in 2020 and sold it for $14 million in 2021, demonstrating the scale of his real estate dealings.

Onofrio's fraudulent system was built on a promise of guaranteed wealth for investors, as long as they and the banks were unaware of the underlying deceit. He sought out undervalued properties, negotiating purchase agreements that allowed him to buy properties at a later date for predetermined prices. These agreements were then assigned to his investors at a higher price, allowing Onofrio to pocket substantial profits without disclosing the original agreements.

His strategy primarily attracted inexperienced investors who lacked the financial resources to purchase high-value properties. According to prosecutors, this led to misrepresentations on loan applications, where Onofrio assisted clients in creating fraudulent financial statements to falsely demonstrate their creditworthiness. In a clever ruse, he would temporarily wire funds into clients' accounts to create the illusion of sufficient cash for down payments, advising them to claim it was “family money.”

Even in cases where Onofrio provided loans to investors, he concealed these transactions from the banks, effectively deferring part of his assignment fee and minimizing his financial risk. The U.S. Attorney's office poignantly described the situation, noting, "Onofrio could do this with little risk because the loan proceeds always exceeded the contract price." This unethical approach left Onofrio in a position where his potential losses were significantly lower than his gains, creating a financial game rigged in his favor.

In a related case, 82-year-old Rochester Realtor Merl Groteboer received a one-year probation sentence and a $10,000 fine after pleading guilty to making false statements during an FBI interview linked to the investigation of Onofrio.

While federal prosecutors painted Onofrio as a fraudulent mastermind, his attorney portrayed him as a remorseful individual who led a law-abiding life, apart from the 14-month period in which he committed these offenses. Supporters, including family and friends, submitted around 30 letters to the judge, advocating for leniency in his sentencing.

This case serves as a stark reminder of the risks associated with high-stakes real estate investment and the potential for devastating consequences when ambition gives way to deception. As Onofrio prepares for his prison term, the effects of his actions will reverberate through the Rochester community and beyond, reiterating the importance of integrity in financial dealings.