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Former Coral Mortgage operator sentenced in multi-million dollar securities fraud

FOR IMMEDIATE RELEASE
February 17, 2012

St. Louis, MO - The United States Attorney’s Office announced that Matthew Kent, vice president and co-operator of Coral Mortgage Bankers Corporation’s University City office was sentenced to 30 months in prison and ordered to pay $1.2 million restitution.

According to court documents, between May 2007 and December 31, 2010, Kent, his partner in Coral Mortgage, David Rubin, and Joshua Gould, formerly of Woodbury Financial, embezzled approximately $1,500,000 from a retired individual solicited by Rubin with Kent’s knowledge to provide funds for operating capital for Coral’s St. Louis operations. The individual was assured that the funds would not be spent, would be held in a secure trust account, used only as collateral for Coral’s operations and that the individual would receive regular interest payments. Between May 2007 and December 2008, the client provided Rubin and Kent approximately $1,200,000 from his and his wife’s life savings. Despite representations that the funds would not be spent, Rubin and Kent used approximately $250,000 of the funds for operating expenses, including payment of their own salaries. Rubin and Kent transferred the balance of the funds to Gould. Gould used those funds for personal expenses including car payments, mortgage payments, payment of substantial personal credit card bills, the renovation of his personal residence, jewelry, and adult entertainment, including substantial expenses at the Penthouse Club and PT’s. Gould also used the money to finance start-up costs and operational costs of several business ventures, including The Sports Nook, True Hockey and Free Poker Experience. Gould and Rubin prepared and gave the individual victim false account statements, including statements falsely representing to the victim that as of September 30, 2010, he had $1,126,365 in his Investment Fund and $217,123 in his Family Charity Fund, when in fact all of the funds had been embezzled, diverted and stolen by Gould, Kent and Rubin.

MATTHEW KENT, University City, MO, pled guilty last November to one felony count of wire fraud and appeared today for sentencing before United States District Judge Rodney W. Sippel.

Rubin and Gould previously pled guilty. Gould was sentenced in July to 97 months in prison and ordered to make restitution to the victims in the amount of $4,323,092. Rubin awaits sentencing in March 2012.

This case was investigated by the Federal Bureau of Investigation, the Postal Inspection Service and the United States Secret Service. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.

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