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Local real estate investor sentenced to 41 months in prison for $1M PPP fraud – RichmondBizSense

Moe Mathews was sentenced Friday to 41 months in a low-security prison for his admitted role in stealing $1.1 million in loans through the federal Paycheck Protection Program. (Photo courtesy of LinkedIn)

A local real estate agent, investor and house flipper has been sentenced to nearly three and a half years in prison after pleading guilty to defrauding the federal government and eight banks out of more than $1 million in COVID relief funds.

Moe Mathews, co-owner and manager of Rockville-based brokerage Fresh Start Team and other businesses using the “Fresh Start” name, was sentenced Friday to 41 months in a low-security prison for his admitted role in stealing $1.1 million in loans through the federal Paycheck Protection Program.

U.S. District Court Judge Henry Hudson also sentenced Mathews to five years’ probation after his release and required him to make full restitution of the stolen funds. Mathews is to start his prison term Nov. 9 at FCI Petersburg, the federal correctional institution in Hopewell.

Mathews, who has been active in real estate locally for over a decade, had sought a lesser sentence of 24 months, while the U.S. Attorney’s Office had asked for 44 months to help deter others from considering similar crimes.

Addressing Hudson before his sentence, Mathews admitted his guilt and apologized for his actions.

“I made multiple mistakes, and for that I am sorry,” Mathews said, his voice quivering at times. “I was in serious distress, and I apologize for the decisions I made because they were completely the wrong decisions.”

At one point shedding tears, Mathews continued, “I am embarrassed of the guilt and shame I have brought on this country I served to protect, and my family. I’m committed to pay back every penny I received.”

A former U.S. Marine, Mathews pleaded guilty in May to a charge of conspiring to commit wire fraud and bank fraud by submitting false and misleading PPP loan applications to the banks that served his various businesses.

From April 2020 to April 2021, prosecutors alleged, Mathews and a co-conspirator submitted 38 fraudulent applications that misrepresented the numbers of employees and average monthly payroll for the businesses.

Mathews’ co-conspirator is not named in the filings but is described as being represented in the applications as a co-owner of the businesses along with Mathews.

The U.S. Attorney’s Office alleged that Mathews had sought as much as $1.7 million in PPP loans and obtained the $1.1 million, after he had successfully obtained a legitimate PPP loan. The PPP program was designed to provide small businesses affected by the pandemic with emergency financial assistance for job retention and other expenses.

At Friday’s sentencing in U.S. District Court, prosecutors argued that Mathews’ actions took those funds away from other businesses in need.

Mathews’ attorney, William Dinkin, asked for 24 months, arguing that the funds were used to support Mathews’ businesses and were not for his own personal gain. But Assistant U.S. Attorney Kashan Pathan said that argument didn’t stand up.

Moe Mathews at the Veterans Path Up house in a CBS 6 report in 2017. (CBS 6 footage screenshot)

“Any use of these funds obtained by fraud is misuse,” Pathan said.

Dinkin noted Mathews’ service as a U.S. Marine and other achievements despite a troubled childhood, which he said included physical and verbal abuse from his parents. Dinkin described Mathews as a devoted husband and father of two adult children, who were present in the courtroom along with other family members.

“The man that sits before you today is a considerably better person than the offense would suggest,” Dinkin said, describing Mathews’ decisions as an act of desperation and not an act of greed as the government alleged. He also said Mathews’ struggles with post-traumatic stress disorder may have factored into his actions.

When the pandemic hit, Dinkin said, Mathews had nearly 40 properties that were being renovated or sold as lower-income housing. When those cash flows dried up during the economic shutdown, Mathews found himself in a position where he couldn’t pay his loans, he said.

“He has great remorse for what he did,” Dinkin said. “He is so humbled and ashamed, because this is not who he is.”

Pathan argued that Mathews’ distress was shared by the millions of other business owners who applied for PPP loans legitimately. Because the billions of dollars provided through the program were a finite amount, the funds Mathews stole were effectively taken away from others who needed them, Pathan said.

“He chose to lie and cheat and steal, and he did it 38 times,” Pathan said.

Of his past service as a Marine, Pathan added, “What makes this case sad is that someone who served this nation would turn around and steal from it.”

A plea agreement in the case lists the eight banks and amounts that Mathews is required to pay back to them, as well as to the Small Business Administration that administers the PPP program.

According to the agreement, the SBA is owed $192,209, while the required payments to the banks include $375,222 to Primis Bank, $196,449 to Atlantic Union Bank, $129,700 to Blue Ridge Bank, $121,284 to Loan Source Inc., $42,700 to TowneBank, $38,125 to Fulton Bank, $37,282 to JP Morgan Chase, and $33,969 to Cross River Bank.

The case against Mathews came two years after a group of lawsuits and at least two state-level investigations were brought against him by investors who said their real estate projects with Mathews were not completed according to their contracts.

Those lawsuits, from Wyoming-based Common Cents Solutions Inc., were resolved last year with a cash settlement from Mathews that totaled about $700,000. Buckley Warden of Richmond law firm ThompsonMcMullan, who represented the investors in the case, said the settlement was reached to his clients’ satisfaction and in light of threatened lawsuits from five other clients.

Mathews led a local chapter of Veterans Path Up, a since-dissolved nonprofit that had planned to use one of his properties as transitional housing for homeless military veterans.

Mathews ran a “We Buy Ugly Houses” franchise that ended in 2019 after nine months. His businesses also were linked to a networking group called Richmond Real Estate Investors Association, which listed the same address as his Fresh Start Team office at 15430 Pouncey Tract Road.



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