Prison for former Oconomowoc broker, convicted in $2.6M scheme

OCONOMOWOC, Wis. - Acting United States Attorney Richard Frohling announced on May 20 that Edward Matthes of Milwaukee was sentenced to 63 months in federal prison for carrying out a $2.6 million dollar investment scheme that defrauded 27 victims, most of whom were elderly. 

Matthes, 51, had earlier pleaded guilty to three counts of wire fraud.

A news release says the information presented at the sentencing hearing showed Matthes was a prominent member of the Oconomowoc community who solicited family, friends, and community members to use his services as an independent broker-dealer for Mutual of Omaha Investor Services, Inc. 

According to court records, over the course of six years, Matthes persuaded his clients, which included his own parents and a cognitively disabled individual, to invest in fictitious Mutual of Omaha accounts which he claimed would perform better for them. Instead, Matthes diverted over $2.6 million into his personal accounts to enrich himself, officials say. During his scheme, officials say Matthes lulled his clients into believing their investments were performing well by manufacturing fake quarterly earnings statements for the non-existent accounts.

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United States District Court Judge Brett Ludwig described the Mathes' conduct as "aggravated," noting how he "cultivated trust" and maintained a "veneer of friendship" with the victims while simultaneously robbing them of their retirement savings. 

This case was jointly investigated by the Federal Bureau of Investigation, the U.S. Department of Labor, Employee Benefits Security Administration, and the Oconomowoc Police Department. The investigation was aided by representatives of Mutual of Omaha and the United States Securities and Exchange Commission.