Criminal Defense Lawyers

Real Estate Developer Fraud Charges

When Federal Agents Come for Real Estate Developers: What You’re Actually Facing

The FBI showed up at 6am with a search warrant. Your employees watched agents carry out boxes of files. By noon, your name was in a DOJ press release. By 3pm, investors were calling thier lawyers.

This is how federal real estate developer fraud charges start – and your next decision determines wether you’re fighting this from your office or from a federal prison cell.

Look, here’s the deal. What you thought was a business disagreement just became a federal criminal case. The goverment doesn’t care about your side of teh story. They care about emails, wire transfers, adn what your business partner is telling them right now. Because he’s probly already talking.

What Federal Real Estate Fraud Charges Actually Mean (And Why “Business Disagreements” Become Federal Cases)

You’re facing federal charges because someone complained. Maybe its one investor. Maybe its fifty.

The difference matters alot more then you think.

Here’s what most developers don’t understand: the feds don’t prosecute every real estate dispute. Their selective. Based off recent 2025 cases, federal prosecution kicks in at 50+ victims OR $5 million+ in alleged losses. Below that? You might face state charges or civil suits. Above that? Your looking at federal wire fraud charges and 20 years per count.

Take Ken Mattson, arrested May 2025 in Sonoma. The DOJ press release said he defrauded “hundreds of investors.” Not ten. Not twenty. Hundreds. That’s the language that triggers federal prosecution. The feds love big numbers – makes them look good in press releases.

Or look at Cody Holmes and Steven Taylor, charged in seperate cases in October 2025 in LA County. Both involved multimillion-dollar schemes. Both got federal attention. Both are facing serious prison time.

So what is an example of actual fraud in real estate? Real-world stuff that gets you federally charged:

• Investor fraud: Promising returns you can’t deliver, using new investor money to pay old investors (Ponzi scheme), lying about property values or development timelines
• Bank fraud: Inflated appraisals, false financial statements to get loans, hiding liabilities on loan applications
• Securities fraud: Real estate syndications that violate SEC rules, unregistered securities offerings
• COVID relief fraud: PPP loans, EIDL funds used for real estate instead of business operations

Now here’s where people get confused.

Does the Statute of fraud apply to real estate? Your asking the wrong question. The “statute of frauds” (plural) is a civil law requiring certain real estate contracts to be in writing. That’s contract law. What your actually facing is federal fraud charges (criminal law) under statutes like 18 U.S.C. § 1343 (wire fraud), 18 U.S.C. § 1344 (bank fraud), and 18 U.S.C. § 1348 (securities fraud).

The evidence show you communicated with investors by email. You recieved wire transfers. You used the phone to discuss deals. Each one of those electronic communications is a seperate federal wire fraud count carrying up to 20 years in federal prison.

I mean, seriously – this is how “business disagreements” become federal cases. One unhappy investor complains to the FBI or SEC. The feds start looking. They contact other investors. Suddenly five more come forward. Then twenty.

Then, irregardless of what actually happened, you have “hundreds of victims” and your facing life in prison.

The Specific Charges You’re Facing – Wire Fraud, Securities Fraud, Bank Fraud (And Why One Scheme Becomes 50 Counts)

The indictment says “7 counts wire fraud.” You thought it was one investment deal. Your confused because each count carries 20 years – that’s 140 years total exposure.

How did one deal become seven counts?

Here’s the thing nobody explains: every email is a seperate 20-year count. Every wire transfer. Every phone call that crossed state lines. Every text message about the deal. The prosecutors don’t charge you with “fraud.” They charge you with 50 acts of wire fraud – one for each electronic communication.

Look at Ken Mattson’s case. Seven counts of wire fraud. That’s not seven different schemes. That’s probly seven emails or wire transfers related to the same scheme. But its 140 years of theoretical exposure, which gives prosecutors enormous leverage when their negotiating a plea deal.

What are the consequences of a fraud charge? Way more then prison:

Prison time: Federal wire fraud carries up to 20 years per count. Bank fraud: 30 years per count. Securities fraud: 25 years per count. If you have multiple counts, they can stack. Tomasz Matczuk got nearly 13 years. Robert Kowalski got 25 years. Both were real estate developers in Chicago who embezzled from a failed bank. Same scheme, different sentences – we’ll get to why in a minute.

Fines: Up to $250,000 per count. If you have 10 counts, that’s $2.5 million in fines alone. And that doesn’t include restitution.

Restitution: You’ll be ordered to pay back every dollar investors lost. More than $2.5 million was recovered from a Vancouver real estate developer convicted for fraudulently obtaining COVID-relief funds. That restitution order follows you forever. You can’t bankruptcy out of it. Its attached to all future income, assets, inheritances.

Supervised release: After prison, you’ll have 3 years of supervised release (basically probation). Drug tests. Check-ins with a probation officer. Travel restrictions. Employment restrictions. Monitored computer usage.

Asset forfeiture: The goverment will seize properties, bank accounts, cars, anything connected to the fraud. Your business empire? Gone. Your personal assets? Frozen or seized.

Career destruction: You’ll be a convicted felon. You can’t get a real estate license. You can’t get loans. You can’t serve on corporate boards. Background checks will show your federal conviction for all time.

Real talk: if your fraud involved affordable housing funds or homeless housing programs, your in the worst category right now. The Beverly Hills and Brentwood cases from October 2025 both involved “funds earmarked for homeless housing.” This is a political hot button. Prosecutors will make an example. Media will cover it.

Judges will impose harsh sentences becuase your “stealing from the homeless.” Its kinda like stealing from a charity – the optics are terrible, and it effects your sentence.

Bottom line: the consequences ain’t just prison. Its financial devastation for decades, career destruction, and public humiliation that follows you’re family.

How Federal Investigations Work – The 3-4 Year Timeline You’re Not Told About

You committed the alleged fraud in 2021. Nothing happened in 2022. Nothing in 2023. By 2024, you thought you was safe.

Then in 2025, you got a grand jury subpoena.

Your freaking out becuase you don’t understand why it took 3-4 years.

Here’s what nobody tells you about federal investigations: their slow. Methodical. The FBI and IRS Criminal Investigation don’t rush. They build cases over years, collecting every email, every bank record, every investor statement. By the time they contact you, the case is basically done.

Look at the pattern in 2025: developers are being arrested for COVID relief fraud from 2020-2021. That’s 4-5 years later. The Vancouver developer case? Fraud occured in 2020-2021, convicted in 2024-2025. The investigation ran for years before charges was filed.

So if you committed fraud 1-2 years ago and haven’t heard anything, your NOT safe. Your in the danger window. The feds are probly building the case right now. If its been 5+ years and the statute of limitations is running (generally 5 years for most federal fraud, but 10 years for bank fraud), you might have different options.

The timeline—wait, let me explain this differently.

Here’s how a federal real estate fraud investigation actually unfolds:

Year 1: Initial complaint and investigation start
One investor complains to the FBI, SEC, or state AG. The feds don’t tell you. They start pulling bank records, subpoenaing emails from your email provider (you’ll never know untill later), and contacting other investors. This is when the cascade starts.

What’s the cascade? One complaint becomes ten becomes fifty becomes “hundreds.” Because when the FBI contacts your other investors and says “we’re investigating [your name] for fraud,” those investors panic. Suddenly they “remember” things differently. The investors who were fine with you last month are now victims. The deals that were okay are now fraudulent.

This cascade is unstoppable once it starts, irregardless of what actually happened.

How many people go to jail for mortgage fraud? According to U.S. Sentencing Commission data, fewer than 3,000 people was convicted of federal mortgage fraud over 12 years – out of nearly 100 million mortgage loans written.

That sounds like good odds, right?

Wrong.

If your being prosecuted, your in that tiny percentage the feds REALLY want. Their selective. They don’t go after everyone – just the big fish, the high-dollar cases, the ones with alot of victims or political value.

Year 2-3: Building the case
The feds interview witnesses. They flip your business partners. They get cooperation from people you thought was loyal. They build a timeline of emails, wire transfers, and statements you made to investors. Your not aware any of this is happening. Your business partner who got contacted by the FBI last year? He’s been cooperating for months, recording your phone calls, wearing a wire to meetings.

At the end of the day, most federal fraud cases involve a cooperating witness – usually a business partner or co-investor who traded you for a plea deal on thier own charges.

Year 3-4: Grand jury and indictment
The feds present the case to a grand jury. You’ll probly get a grand jury subpoena for documents or testimony. This is your warning – you have roughly 60-90 days before indictment. This is the window when you need a lawyer NOW, not later. After indictment, you’re negotiating power drops by 80%.

Here’s the thing – and I mean career-ending stuff – most developers don’t hire a federal criminal defense attorney untill after thier arrested. That’s to late. The grand jury subpoena is your last chance to cooperate, structure a defense, or (if your a minor player) maybe avoid indictment entirely by cooperating first.

Then one morning, the FBI shows up at 6am wiht a search warrant. Or you get a call from your attorney saying an indictment was unsealed.

And your life changes instantly.

What’s Happening Right Now in 2025 – Recent Cases and What Happened to Those Developers

Your terrified. Your Googling recent cases trying to figure out if your going to prison and for how long. You found Ken Mattson (arrested May 2025), Cody Holmes (October 2025), Robert Kowalski (sentenced 25 years).

Your trying to pattern match – what happened to people like me?

Let me tell you what happened to them, and what it means for you’re situation.

Ken Mattson – Sonoma, California (May 2025)
Charged with seven counts of wire fraud for allegedly defrauding “hundreds of investors” in real estate schemes. Each count carries up to 20 years. He hasn’t been convicted yet – the case is still pending. But here’s what you need to understand: the language “hundreds of investors” in the DOJ press release? That’s the prosecutors telling the judge “this guy deserves the max.” Its setting up a harsh sentence if he’s convicted.

Mattson’s case is in the Northern District of California, which has been hyper-aggressive on real estate fraud in 2025. The NDCA US Attorney’s office has made developer fraud a priority. If your case is their, your probly facing tougher prosecution then if it was in, say, the Western District of Texas or Middle District of Florida.

Jurisdiction matters more then people think.

Cody Holmes (Beverly Hills) and Steven Taylor (Brentwood) – October 2025
Two seperate cases, both charged within days of each other, both involving multimillion-dollar fraud related to affordable housing funds. These cases are politically charged becuase their “stealing from homeless housing programs.” The media coverage was brutal. The public wants blood.

When prosecutors have political pressure and media attention, sentences go up – irregardless of the actual facts.

Holmes and Taylor ain’t been sentenced yet, but here’s the reality: affordable housing fraud in 2025 is the worst category to be in. Its like stealing from a childrens hospital – the optics destroy you before you even get to court. Expect harsh sentences when these cases resolve, probly in the 10-15 year range if convicted at trial.

Robert Kowalski – Chicago (sentenced 25 years)
Real estate developer convicted of bankruptcy fraud, bank embezzlement, and tax charges related to the failed Washington Federal Bank in Chicago. 25 years in federal prison. Why so harsh? Because Kowalski went to trial and lost. That’s the “trial tax” – when you go to trial and loose, your sentence is typically double what you would of got with a plea deal.

The jury convicted him. The judge sentenced him to the high end of the guidelines becuase he “showed no remorse” and “refused to accept responsibility.” Those are code words for “you made us go through a trial instead of pleading guilty.”

Tomasz Matczuk – Chicago (sentenced nearly 13 years, December 2024)
Same scheme as Kowalski – embezzling from the same failed bank. But Matczuk got 13 years while Kowalski got 25.

What’s the difference?

Matczuk took a plea deal. He cooperated (at least somewhat). He showed “acceptance of responsibility,” which reduces your sentence by 2-3 levels in the federal sentencing guidelines – roughly a 30-40% reduction.

This is the math you need to understand: going to trial and losing can DOUBLE your sentence versus taking a plea. But taking a bad plea to early can lock you in to 10+ years when you had defenses. This is the decision that keeps you up at night, and its the one you gotta make wiht a lawyer who actually knows federal sentencing.

Vancouver Real Estate Developer – COVID Fraud (convicted 2024-2025)
Fraudulently obtained COVID-relief funds (PPP loans, EIDL). Convicted. Sentenced to prison (length not public in all articles).

But here’s the kicker: $2.5+ million in restitution was ordered and is still being collected.

That’s the part nobody talks about – the financial sentence that never ends.

You serve your time, you get out, and then what? The restitution order is waiting. The goverment garnishes your wages. Seizes tax refunds. Takes inheritances. Goes after your spouses income in community property states. You can’t bankruptcy out of it. You can’t settle it for pennies on the dollar.

You pay every dollar back, plus interest, for the rest of you’re life. That’s the reality for all intents and purposes.

So what does this tell you about your situation? A few things:

The trial tax is real. Going to trial and losing can double your sentence. Kowalski (trial) got 25 years. Matczuk (plea) got 13 years. Same crime, same scheme, different choices. If the evidence against you is strong – and by the time the feds indict, it usually is – the question ain’t “can I win at trial?” Its “can I negotiate the best possible plea?”

Acceptance of responsibility matters enormously. Admitting guilt, showing remorse, cooperating with prosecutors – all of this reduces your sentence under the federal sentencing guidelines. Judges have discretion, but the guidelines are the starting point. And the guidelines give a 2-3 level reduction for acceptance of responsibility. That’s the difference between 10 years and 6 years. Between 15 years and 9 years.

Restitution is forever. Even if you get a “light” sentence – say 5 years – your coming out to decades of financial devastation. The $2.5 million restitution order in the Vancouver case? That guy is paying that back for the rest of his life. Every job he gets, wages garnished. Every asset he accumulates, seized. This changes the calculus on everything – whether to hide assets (don’t – that’s another felony), whether to transfer property to family (don’t – fraudulent transfer), whether to take money overseas (don’t – money laundering charges).

Where your charged matters. Northern District of California is aggressive on real estate fraud. Southern District of New York is tough on securities fraud. Some districts are more lenient. If you have multi-state operations and the fraud occured in multiple jurisdictions, venue fights are winnable. Getting you’re case moved from NDCA to a more lenient district could mean 5 fewer years. Most developers don’t even think about this, but its a mute point if you don’t raise it early.

Political cases get enhanced sentences. Affordable housing fraud. Stealing from COVID relief programs. Defrauding veterans. These are politically charged categories where prosecutors and judges feel public pressure to “send a message.” If your fraud falls into one of these categories, expect the high end of the sentencing range – maybe even an upward departure from the guidelines.

Plain and simple: the recent cases from 2025 show that federal real estate fraud charges are being prosecuted aggressively, sentences are harsh (10-25 years typical for big cases), and restitution orders are crippling.

The developers who cooperated and pleaded got half the time of the ones who went to trial and lost. The ones who showed no remorse got destroyed.

Your Decisions Right Now – Cooperate? Trial? Plea? (And How Each Choice Plays Out)

Your lawyer is asking: “Do we cooperate?” “Do we fight this?” “Do we negotiate a plea?”

You dunno how to decide. Each option terrifies you.

So let me break down what each choice actually means.

Option 1: Cooperate against your business partner / co-defendants

This means you meet with prosecutors, tell them everything, testify against others involved in the scheme. In exchange, you get a cooperation agreement – usually a massive sentence reduction, sometimes immunity from certain charges.

What it costs you: Your business partner goes to prison because of your testimony. Your reputation in the industry is destroyed forever – your a “rat.” Your family relationships probly suffer. You live with the guilt. But you might get 3-5 years instead of 15-20.

The reality? Your business partner is probly already cooperating against YOU. Most federal cases involve a cooperating witness. The person who cooperates first gets the best deal. The person who cooperates last gets scraps. The person who never cooperates gets the max sentence.

So the question ain’t “should I betray my partner?” Its “is my partner already betraying me, and am I gonna be the last one to cooperate?”

Here’s how to think about it: If your business partner, CFO, or co-investor was recently contacted by the feds, assume their already talking. The conversations your having with them RIGHT NOW might be recorded. The meeting you had last week? He might of been wearing a wire.

This is how federal cases work – they flip people bottom-up untill they get to the main target.

Option 2: Go to trial and fight

You maintain your innocence. You force the goverment to prove their case beyond a reasonable doubt. You make them put on witnesses, introduce evidence, convince a jury. Maybe you win. Maybe the jury believes you was just a businessman who made mistakes, not a criminal.

But here’s the statistics: federal conviction rate at trial is over 90%. The feds don’t indict unless their sure they can win. By the time you get indicted, they have emails, wire transfers, cooperating witnesses, bank records – everything they need. The trial is mostly a formality.

And if you lose – which is statistically likely – you face the trial tax. Your sentence will be double what you could of got with a plea. Kowalski went to trial, lost, got 25 years. Matczuk pleaded, got 13 years.

Same crime. That’s the trial tax.

Also, if you go to trial, you don’t get the 2-3 level reduction for “acceptance of responsibility.” You can’t accept responsibility and plead not guilty – its contradictory. So you loose that 30-40% sentence reduction automatically.

So when does trial make sense? When the evidence is weak. When you actually didn’t commit fraud. When the goverment’s case relies on one shaky cooperating witness and circumstantial evidence. When you have a viable defense (you relied on advice of counsel, you made business mistakes but didn’t have fraudulent intent, etc.).

When your willing to risk everything on a 10% chance of acquittal.

Option 3: Negotiate a plea deal

You plead guilty to some counts in exchange for the goverment dropping other counts or recommending a lower sentence. You get certainty – you know roughly what your sentence will be before you plead. You get acceptance of responsibility credit. You avoid the trial tax.

What you give up: your right to trial, your chance at acquittal, your claim of innocence. Your pleading guilty to a federal felony. Its on you’re record forever. You can never say “I didn’t do it” again.

But here’s the math: if the evidence is strong and conviction is likely, a plea deal might get you 8-10 years instead of 15-20 at trial. That’s 7-10 years of your life back. Thats seeing your kids graduate high school instead of from prison. Thats getting out in your 50s instead of your 60s.

The key is negotiating the BEST plea deal, not just taking the first offer. Prosecutors start high. There first offer might be 15 years. You negotiate down to 10, then 8. You argue for concurrent sentences instead of consecutive. You argue for a lower loss amount calculation (which drives the sentencing guidelines). You bring in mitigation evidence (your a good person, you have family, you made mistakes under pressure, etc.).

Long story short: most federal defendants take plea deals. Over 95% of federal cases resolve with pleas, not trials. Because the math favors pleading when the evidence is strong.

The question is whether you negotiate a good plea or a bad one.

So how do you decide?

Fact of the matter is, you need a lawyer who can evaluate the evidence against you. What do the feds actually have? Are their emails that clearly show fraudulent intent? Are their cooperating witnesses who can testify to conversations where you admitted the scheme? Or is it circumstantial – investors lost money, but maybe you made business mistakes rather then committed fraud?

You need a lawyer who knows the prosecutors in your district. Some prosecutors are reasonable – they’ll negotiate fair deals. Others are hardliners who demand the max. Your attorney needs to know who your dealing with.

You need a lawyer who understands the sentencing guidelines. What’s the loss amount? How many victims? Are their enhancements (leadership role, sophisticated means, obstruction of justice)? What’s the guidelines range? Can you argue for a downward departure?

And you need to make this decision fast. Because while your thinking about it, your business partner is probly cutting a deal. And the first person to cooperate gets the best terms. The second person gets less. The third person gets scraps.

The person who never cooperates gets destroyed.

Why You Need a Federal Criminal Defense Attorney Now (Not Your Business Lawyer, Not Tomorrow – Now)

Your business attorney says “I’ll handle this.” Your friend recommends his divorce lawyer. Your thinking “I’ll wait and see what happens.”

All wrong. All gonna cost you years of your life.

Federal criminal defense is a specialized field. Its not like state court. Its not like civil litigation. Its not like business law. The rules are different. The prosecutors are different. The stakes are different.

Your business lawyer who negotiates contracts and handles incorporations? He’s never dealt with the FBI. He’s never cross-examined a cooperating witness. He’s never argued for a downward departure from federal sentencing guidelines. He doesn’t know the difference between a proffer session and a reverse proffer. He doesn’t know when to invoke Kastigar immunity.

He’s gonna get you destroyed, and he won’t even realize it untill your being sentenced to 20 years.

I’ve seen this play out to many times: developer gets contacted by FBI, uses his business lawyer, says something incriminating in an interview (because business lawyer doesn’t know to say “we decline to be interviewed”), provides documents that should of been withheld under attorney-client privilege (because business lawyer doesn’t understand how privilege works in criminal cases), and creates evidence that prosecutors use to indict him. By the time he hires a federal criminal defense attorney, the damage is done.

So when do you hire a federal criminal defense attorney? As soon as you get any of these triggers:

Grand jury subpoena: You have 60-90 days before indictment. This is your window.

FBI wants to interview you: Do NOT talk to FBI without a lawyer present. I don’t care what they say. I don’t care if they say “we just wanna hear your side.” I don’t care if they say “this will go easier if you cooperate.” Everything you say will be used against you. Everything. Get a lawyer first.

Your business partner was contacted: Assume he’s cooperating. Assume everything you say to him is being recorded or will be testified about. Stop talking to him except through lawyers.

An investor filed a complaint: Whether its with the FBI, SEC, state AG, or even a civil lawsuit – once one investor complains, the cascade starts. Get ahead of it.

Search warrant executed: If the FBI shows up at your office or home with a search warrant, you need a lawyer that day. Not next week. That day.

Let me be clear: the earlier you get a federal criminal defense attorney, the more options you have. If you hire one during the investigation (before indictment), you might be able to convince prosecutors not to indict. You might be able to negotiate immunity in exchange for cooperation. You might be able to structure your statements and document production to minimize exposure.

If you wait untill after indictment, your options narrow. Your negotiating from a position of weakness. The prosecutors have already decided your guilty enough to charge – now your just arguing about the sentence.

If you wait untill after conviction, you have almost no options. Your arguing for a lower sentence within the guidelines, but the guidelines are harsh for fraud cases. And you’ve already lost the 2-3 level reduction for acceptance of responsibility if you went to trial.

When all is said and done, the old wise tale about “you can’t afford a good lawyer” is backwards. You can’t afford NOT to have a good federal criminal defense attorney.

The difference between a good attorney and a bad one is literally 10 years of your life. The difference between having an attorney early versus late is whether you get indicted at all.

The Next 24 Hours Matter More Than the Last 20 Years

Your built a real estate empire over 20 years. You closed hundreds of deals. You made millions of dollars. You have a reputation, a family, a legacy.

And all of that can be destroyed in the next 24 hours based off the decisions you make right now.

The emails your thinking about deleting? Do NOT delete emails or documents. That’s obstruction of justice – a seperate federal felony that adds years to your sentence. The feds already have them anyway from your email provider.

The business partner you think is loyal? Your business partner is probably already cooperating. Stop talking to him about the case. Stop discussing what to tell investigators. Stop trying to “get your stories straight.” All of that is conspiracy and obstruction.

The FBI agent who wants to “just hear your side”? He’s building a case against you. Every word you say will be in a report that prosecutors use at trial. Every denial you make will be impeachment material when they prove you wrong.

Don’t talk to them without a lawyer. Period.

The investor who’s threatening to file a complaint? Once they file, its too late to settle quietly. The cascade starts. The feds contact all your investors. Suddenly you have “hundreds of victims” instead of one unhappy investor. Settling that one complaint NOW – even if it costs you $500K – might save you from a $5 million restitution order and 15 years in prison.

Look, I ain’t gonna sugarcoat this. Your facing serious federal charges. The goverment has unlimited resources. They have the FBI, IRS-CI, forensic accountants, cooperating witnesses, and years of emails and bank records.

Your probably gonna be convicted – the conviction rate is over 90%.

The question is whether you serve 5 years or 25 years. Whether you come out with any assets left or your financially destroyed for life. Whether you cooperate and testify or stay silent and get the max.

These decisions get made in the next few weeks, not the next few years. Every day you wait is another day prosecutors build thier case. Every day you wait is another day your business partner is cooperating against you. Every day you wait is another day the feds are freezing your assets and preparing the indictment.

Call a federal criminal defense attorney right now. Not tommorow. Not after you “think about it.” Not after you “see what happens.”

Now.

Your freedom depends on it. Your financial future depends on it. Your family’s future depends on it.

The FBI showed up at 6am. By noon, your name was in a DOJ press release. By 3pm, investors was calling lawyers.

What are you gonna do by 6pm? The next 24 hours matter more then the last 20 years.