LOS ANGELES (CNS) - A Santa Clarita man who invested in real estate and sold ``coupon bonds'' that promised regular interest payments on top of principal repayment has agreed to plead guilty to a federal criminal charge for defrauding investors out of more than $1.7 million, the Department of Justice announced today.
Matthew Skinner, 45, who in 2014 founded a company called Empire West Equity Inc. and later established Simple Growth LLC, was charged Tuesday with securities fraud, according to the U.S. Attorney's Office.
Federal prosecutors also filed a plea agreement in which Skinner agreed to plead guilty to the offense and admitted he fraudulently sold securities.
Skinner used social media platforms such as Facebook and YouTube to promote himself, falsely claiming to be an experienced and successful real estate investor with more than $200 million in deals under his belt, according to court documents.
After Empire West experienced financial troubles and Skinner was unable to pay his staff and investors, he established Simple Growth in 2018 and falsely told investors who purchased Simple Growth coupon bonds ``that their money would be used to purchase real estate that (Skinner) and Empire West would develop and resell at a profit,'' according to the plea agreement.
Skinner admitted that he did not intend to purchase, develop or resell real estate, and that he instead used investor funds to pay older investors, his employees and himself.
He ``used investor funds from those entities and accounts to pay for personal trips, his mortgage, his utility bills, cosmetic surgery, and alimony payments to his ex-wife,'' Skinner acknowledged in the plea agreement.
Simple Growth raised $1,744,946 from more than 20 investors -- none of whom received any of their money back.
The securities fraud charge against Skinner carries a penalty of up to 20 years in federal prison.
Skinner has agreed to surrender to federal authorities and make his initial court appearance on May 25, prosecutors said.