Federal prosecutors in Philadelphia today indicted loan broker Matthew McManus, of Glenside, and his business partner Andrew Bogdanoff, of Arizona, and charged them with fraud, conspiracy and money laundering for having "defrauded more than 800 victims out of more than $10,000,000" (amount corrected) according to a statement from US Attorney Zane David Memeger, FBI special agent-in-charge George Venizelos, and IRS Acting Special Agent-in-Charge Akeia Conner. Four of their out-of-state brokers were also charged with fraud. Bogdanoff also faces federal tax fraud charges. More on the indictment here.
Bogdanoff was founder and chairman of Philadelphia-based Remington Capital Group and related companies, and McManus was his partner in the business until he left in 2008. Bogdanoff's lawyer did not immediately return phone calls.
Updated: Says McManus' lawyer, Lisa Mathewson: "The charges appear to relate to Mr. McManus's relationship with a former business associate in Arizona. They do not reflect on Mr. McManus's own Philadelphia-based business, nor on his excellent reputation for closing successful business deals with integrity. He intends to fight them."
McManus has in recent years said he raised money through another firm he controlled, NAI Bluestone Real Estate Capital, for well-known Philadelphia projects, including Bart Blatstein's recent Erbe Apartments complex and other Blatstein projects, from lenders including Greystone Capital, Beneficial Bank, and Firstrust Bank, among others.
If convicted of all charges, Bogdanoff faces up to 282 years in prison; McManus faces up to 105 years in prison. Also charged with fraud were brokers Shayne Fowler, 27, of Scottsdale, Arizona; Joel Nathanson, 25, of San Diego, California; Frank Vogel, 47, of Rochester Hills, Michigan; and Aaron Bogdanoff, 24, of Scottsdale, Arizona. The Bogdanoffs also face federal tax fraud charges.
Also according to the indictment, Remington pretended to be the "acutal lender" in these projects; Remington exaggerated its success rate at finding financing; and Remington promised to provide funding through an internal funding source, Northridge Capital, when in fact the funds weren't available.
The government also accuses McManus of obstruction of justice for allegedly lying to investigators after he left Remington and after the FBI and IRS executed search warrants around the company's Arizona office.
"We just learned about it today. We can't comment on it," said Spencer Yablon, who heads the Philadelphia-area office of Marcus & Millichap, where McManus has worked in recent months as a mortgage originator after bringing his team from NAI Bluestone to work for the brokerage last fall.