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Press Release

Former Oconomowoc Investment Broker Sentenced to 63 Months in Federal Prison for $2,600,000 Scheme That Defrauded Elderly Victims

For Immediate Release
U.S. Attorney's Office, Eastern District of Wisconsin

Acting United States Attorney Richard G. Frohling of the Eastern District of Wisconsin announced that on May 20, 2021, Edward E. Matthes (age 51), of Milwaukee, Wisconsin, 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 had earlier pleaded guilty to three counts of wire fraud, in violation of 18 U.S.C. § 1343.

The information presented at the sentencing hearing showed that 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. (“Mutual of Omaha”).  Matthes previously worked in the same capacity for Thrivent in St. Louis, Missouri, and Pewaukee, Wisconsin.  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.  During his scheme, Matthes lulled his clients into believing their investments were performing well by manufacturing fake quarterly earnings statements for the non-existent accounts.

Several victims filed impact statements with the court prior to the sentencing.  Two victims made in-person remarks during the sentencing hearing, explaining how Matthes betrayed their trust, causing them significant financial and emotional harm.  Additionally, a representative of Mutual of Omaha spoke during the hearing and explained how Matthes’ actions caused the company to expend considerable resources to investigate the matter and to reimburse most of the victims for their losses.

In pronouncing sentence, United States District Court Judge Brett H. Ludwig described the defendant’s 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.  He commented that the protracted nature of the offense conduct, the magnitude of loss, and Matthes’ betrayal of trust, required a sentence that both punished and deterred. 

“Matthes betrayed the trust of family, friends, and others who simply were trying to invest their hard-earned savings to provide financial security for themselves in retirement.  The Department of Justice is committed to working with our law enforcement partners to seek justice on behalf of victims of financial fraud,” said Acting U.S. Attorney Frohling. 

“This fraudster took advantage of some of our most vulnerable citizens,” said FBI Special Agent in Charge Robert Hughes. “Most of his victims were elderly, and he spent years gaining their trust, only to wipe out a lifetime of their savings.  I commend the tireless efforts of our special agents and law enforcement partners who worked jointly to bring this case to justice.”

Jeffrey Monhart, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration (“EBSA”) commented, “EBSA will continue to work aggressively with our law enforcement partners to stop the financial harm caused by these types of schemes.” 

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.  Assistant United States Attorney Kelly B. Watzka prosecuted the case.  

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For further information contact: Public Information Officer


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Updated May 24, 2021

Elder Justice