92.9 F
San Fernando
Thursday, Nov 30, 2023

Santa Clarita Man Pleads Guilty to ‘Coupon Bonds’ Scam

A Santa Clarita resident has pleaded guilty to defrauding real estate investors out of more than $1.7 million. 

A Santa Clarita resident has pleaded guilty to defrauding real estate investors out of more than $1.7 million.

Matthew Skinner, 45, who in 2014 founded a company called Empire West Equity Inc. and later established Simple Growth, has been charged with securities fraud in a one-count information filed in U.S. District Court in Los Angeles. Federal prosecutors filed a plea agreement in which Skinner agreed to plead guilty to the offense and admitted that he fraudulently sold securities.

Skinner had invested in real estate and sold “coupon bonds” that promised regular interest payments on top of principal repayment.

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.

Skinner’s scheme developed as Empire West experienced financial troubles. Skinner was unable to pay his staff and investors so 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.

Skinner “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,” he said in a plea agreement.

Simple Growth raised approximately $1.74 million from more than 20 investors – none of whom received any of their money back.

The securities fraud charge against Skinner carries a statutory maximum penalty of 20 years in federal prison. He has agreed to surrender to federal authorities and make his initial court appearance on May 25.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.

Featured Articles

Related Articles