Behind the Scenes of an Alleged $35M Bank Fraud
The Amplified Impact Podcast
February 5th, 2023
In this episode of the podcast, Anthony takes listeners behind the scenes of an alleged 35 million bank fraud case.
He shares his personal connection to the defendant, Matt Onofrio, whom he met three years ago at a real estate conference and helped build his brand.
Anthony reflects on his feelings of jealousy towards Matt’s stratospheric success and the four red flags he noticed about Matt’s behavior that made him cut ties.
The episode serves as a cautionary tale about the dangers of jealousy and the importance of staying vigilant in business.
TWEETABLE QUOTE:
“I was harboring feelings of jealousy towards another group, and I’ve realized that those feelings weren’t serving me. Those feelings were holding me back and leading me to create excuses for why they were succeeding instead of focusing on what I could do to improve and become better. I was choosing to make excuses.” – Anthony Vicino
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Episode Transcript:
Anthony: [00:00:00] Hey, what’s up everybody? Welcome to the podcast. Today, I’m going to give you a behind the scenes look at an alleged 35 million bank fraud. Now, real quickly, let’s lead off. This is an alleged bank fraud in that the person that we’re going to talk about in this episode of today, he’s currently on trial, so nothing’s proven yet, innocent until proven guilty, all that, all that.
Anthony: However, I have a unique backstory with this person. His name’s Matt Onofrio, and this is a guy that I met three years ago at a local real estate conference. At the time, he was just this young buck. He was tall, gangly, very sharp. He was a nurse, anesthetist, so he was very smart, was working, making a ton of money in that field, and you had just started investing in real estate and I took a liking to him.
Anthony: He was kind of. And naive, but he had this earnestness about him that, you know, I, I kind of appreciated. And so I helped him out in the beginning. I, I built his website, I did his branding for [00:01:00] him, and I built out his, his marketing funnel. And, you know, we were, we were close for about six months or so. Until he went on to the Bigger podcasts podcast, which is, if you guys aren’t familiar, it’s like the, the number one business podcast in the world.
Anthony: It’s massive and it’s like the number one real estate investing community. So he went on this podcast and it exploded. His visibility and his notoriety. Everybody, something new about him because. His story that he told on this podcast was very compelling, like his rags to Rich’s story and how quickly he was doing it captivated people’s attention.
Anthony: And so over the next two and a half years, he just kept flying closer and closer to the sun. He was flying in ever. More rarefied heirs, hanging out with the likes of Brandon Turner, who is the, the host of bigger Pockets. For many, many years, he was hanging out with Ryan Pineda and with, ed Mylet or Louis How, or Alex Hermozi.
Anthony: And so. As he was [00:02:00] flying up through the air, I remember thinking like I had experiencing a lot of jealousy because we were experiencing incredible growth ourselves at Invictus Capital during this period of time. We scaled from, in 2019 when we formed Invictus, from to $0 up to 70 million of assets in just, you know, three or four years, which is incredible.
Anthony: It put us as an outlier in terms of our growth, and yet Matt’s. Was so much more stratospheric. It was just hard to even fathom. In fact, in that time, if my understanding’s correct, if we can trust what he said to me, he had done over 500 million of transactions in the same period of time. And so it’s easy to look at that and get really jealous and for a time I, I definitely did get jealous.
Anthony: However, in the end, you know, it turned out that what we were seeing in that incredible growth. And the thing that seems so unlikely was, in reality, probably unlikely to have [00:03:00] occurred legally because he probably wasn’t playing by the same rules as everybody else. Or at least that’s how it looks now that he’s on trial for these, these, this bank fraud.
Anthony: And so what I want to share in this episode today is four red flags, four things that I noticed about six months into my, my relationship with. that actually set, set us off on completely different paths, and I stopped talking to him. At that point, I stopped associating with them because I, I started to see these red flags and I started to realize something’s not adding up.
Anthony: And for the last year, Every time I would see him in the news, I would get ever. I would get more and more frustrated. He signed a big book deal to write about triple net leases for bigger pockets. I got really frustrated. There’s jealousy and I admit that, and I actually tweeted about this back in June, which was that I was harboring feelings of jealousy towards another group, and that I’ve realized those, those feelings weren’t serving.
Anthony: That they were holding me back and, and leading me to create excuses for [00:04:00] why they were succeeding. And instead of focusing on what I could do to emulate or to improve and become better and compete better, I was choosing to make excuses. And so I tweeted that and then, you know, six months later it was revealed, indicted on three accounts of, fraud.
Anthony: So maybe my gut was right, but it turns out doesn’t really matter because jealousy, one way or the other, if it. Fuel a fire in you to go and make you compete better than it’s just a wasted, feeling and you got to get it out of your life and purge it. So what I’m going to share are the four red flags that I personally saw.
Anthony: Over the years. And, I think that if you keep these close to your heart in like in the forefront of your mind, they can protect you because we’re seeing more and more fraud. Like the, the cases of like these large frauds are getting bigger and bigger. You know, you think about Elizabeth Home Homes in Theranos, you think about Sam Bankman Fried and FTX.
Anthony: You think about, I can’t remember the guy’s name from Luna, the, the, crypto exchange. [00:05:00] And you think about all these things and it’s like, man, this is happening a lot. And so these four red flags I’m going to share with you, they can protect you from hopefully being defrauded yourself from, you know, getting into bed with these, these l these people,
Anthony: Now, all that’s to say, and by the way, this is, I’m not casting judgment or anything dispersions on Matt and what he’s done or hasn’t done. I don’t know, I don’t care. Doesn’t matter. The only reason I’m sharing this with you guys is. So that we can learn from it, we can improve from it, and we can go forward and, and invest better as a result.
Anthony: So number one, the first red flag, T G T P T , which stands for too good to be true. Now, it’s interesting with Matt that the, the first red flag I saw was the fact that he was consistently getting home run deals back to back to. Like grand slam deals at a rate that nobody else in the industry. [00:06:00] HA has, could possibly keep up with.
Anthony: And it was really interesting because like when we would ask him and try to get to the bottom of like, where’s this? How, how are you getting these deals? The answers were always vague around like, oh, you just have to believe it’s possible, or it’s mindset, or you have to be creative. It’s about who you know and all these things.
Anthony: You know, like not tactical strategies that you would be able to emulate. And so a person who’s just starting out on the scene in three years doing something at a scale that even the established companies that have been doing this for 10, 20, 30 years can’t keep up with like it. It starts to go into the realm of this is too good to be true.
Anthony: So that was the very first thing, which was how are you hitting a home run literally every time you step up at the bat? And also it seems like you get to go at the bat 27 times, whereas the rest of us only get to go one and. That’s number one, the first red flag. If something seems too good to be true, it probably is, especially in the investing world.
Anthony: Red flag number two is the [00:07:00] numbers lie. One of the, one of the sections of my book, passive Investing Made Simple that’s been highlighted, highlighted the most, and I get to see this on, on Good Reads because like when people highlight things on Kindle, it tabulates it there. So like one of the. Highlights is this line says the numbers don’t lie, but I can make them say whatever I want.
Anthony: And so what this means is that I can hide in complicated spreadsheets and financial models and return projections. I can hide the. Of the numbers I can make them, I can massage ’em, I can manipulate them and show what I want them to show. And so if you don’t have a baseline understanding of underwriting, financial modeling, returns, projections, all that stuff, then you are vulnerable to whatever I tell you.
Anthony: And on the one hand, you should trust me, especially as your operator. Like we’re going to partner together. That’s inherent. But if you can’t look at the numbers and decipher them for yourselves, then you’re going to be very, very. . And when it came [00:08:00] to Matt, I sat down with him many times and had him explain to me his underwriting and how he was projecting returns.
Anthony: And listen, like I might not be the smartest person in the world, but I am an industry expert. I’ve been doing this for a long time, and I’m pretty sharp and I could not make heads or tails of it. Literally every time I’d walk away from a conversation with them. If you were to, if you were to ask me. explain what he had just explained to me and like recite it.
Anthony: I couldn’t have done it, which is, at first I took to mean I’m stupid and that he was really smart and like it was just too complicated for my, my little pea brain. But in hindsight, thinking about it, that’s like one of my super skills is to take something complicated and distill it and simplify it. And I couldn’t do it.
Anthony: I just couldn’t do it. And so the numbers weren’t lying, but he was making ’em say all sorts of things and I couldn’t. Red flag number three is the power of social manipulation, and this [00:09:00] one I personally fell into, which is, And, and this is, this is exactly what Elizabeth Holmes did. This is exactly what Sam Bankman freed did.
Anthony: They surrounded themselves with celebrities and with icons of the industry, people who had impeccable integrity or reputations. And when you see Elizabeth or Sam next to so-and-so, a little bit of that person’s prestige, a little bit of their reputation. Washed off onto them. As a consequence, and this is what Matt did brilliantly.
Anthony: He was hanging out with Brandon Turner, who I respect the hell out of. He was hanging out with Alex Hermozi, who I respect the hell out of. And so when I, when you see that, you go. Okay, well I maybe, maybe I’m just a dick. Maybe I’m just being a doubter and maybe he actually is legit. Like how is he, how are these people hanging out with him?
Anthony: They then they don’t see it and therefore it’s probably me. And I literally went through this thought process of like, maybe I have it all wrong, which prompted. That text or that [00:10:00] tweet where I, where I came clean and I said, listen guys, I’m suffering from jealousy right now. And I realized it wasn’t a helpful emotion and what, what prompted that was I saw on Alex from Rosie’s Instagram, him post about hanging out with Matt and I thought, man, I respect Alex so much that maybe I’m wrong and I was open to being wrong.
Anthony: And I, and I acknowledged that in a, in a very public. But in hindsight, I fell prey to one of the most powerful forms of influence and persuasion, which is social proof. Social proof had me doubting what I thought and what I had held so deeply inside. And I had seen these red flags, but that was enough to make me doubt.
Anthony: And so, I, I share this with you because this is, I think, the most powerful one for manipulating people. And it’s very easy to do in a digital environment where all you can see is a picture of me hanging out with so-and-so and you think like, oh, he’s legit and great. That doesn’t necessarily mean it’s so, so there’s this, this idea that perception is [00:11:00] reality.
Anthony: it’s not, but in social media it is. The fourth red flag to be on the lookout for is the story math. The story math just wasn’t adding up and this was the very first red flag that I caught that, that, that really set me off with Matt when he went on that first Bigger Pockets podcast. He talked about how he was making a million dollars of passive income every year, and I knew from talking to him to having known his portfolio, to having, you know, built out his infrastructure.
Anthony: That that just fundamentally wasn’t true, that he was misleading the audience based on what he defined as passive income. The buildings were generating a million dollars of revenue in rent, but the vast majority of that, because Matt was over leverage with a hundred percent debt, it seemed, was not cash flowing a million dollars.
Anthony: It was not putting a million dollars of passive income into Matt’s pocket, and that was the first thing that was like, oh, he’s lying. He’s lying out. And that was the first [00:12:00] moment in my experiences with him where I decided I was going to start distancing myself and not, not associate with that anymore.
Anthony: Because I was like, I don’t have time for this. But over the years, that story, those stories just kept getting bigger, kept getting conflated, and they started being inconsistent even within themselves. So I started hearing him say things like how he built a 50 million net worth in one year, 50 million in one.
Anthony: Which is ridiculous. But then it got even more ridiculous because the next year it suddenly jumped up to a hundred million in three years. And that’s also quite ridiculous, but not as ridiculous as like three months later they changed their messaging again, and now they were saying his net worth was 150 million in only two years and.
Anthony: This outlandish number just kept getting more and more outlandish, but then the timeframe in which it was getting outlandish started to shrink. And so it wasn’t even in internally [00:13:00] consistent. And I think consistency is one of the most important traits that a human can have. Like I’ve interviewed hundreds of, new hire potentials, and one of the questions I always like to ask is like, what’s integrity mean to you?
Anthony: Because all companies, you know, they say like, integrity is a, is a key value for. One of the things is in asking that question to so many people I’ve come to realize, everybody defines integrity a little bit differently, and, but despite those, those definitions being a little bit different. I did notice, like the through line, if you like, boiled it down, came down to something to the effect of like, just doing what you say, like being consistent.
Anthony: Your word is your bond. Like that’s, that’s what integrity means to a lot of people. And when people are not consistent with what they’re saying or their actions, then we look at them and say, that person doesn’t have integrity. And that’s where that red, that fourth red flag of the story math not adding up, that’s like where it really hit was that this person is not being consistent and therefore something is not.
Anthony: Right. [00:14:00] Now, I’m not saying that he broke the law. I’m not saying that he’s wrong, that he did anything illegal or anything like that. I’m just saying, you know, he’s on trial right now being indicted by the FBI and whoever in the s e c and you know, that does not look what does not look good. But from the beginning, you.
Anthony: I do not think that he did anything malicious, I think, I think it can really easily become a slippery slope of convincing yourself that you’re just being creative and you creative your way into a gray area. And that can be, that can be a dangerous, dangerous slip slide. So that’s my only commentary on, on that.
Anthony: But hopefully these four red flags, just like being conscious of them, being aware of how they can crop up and how they can be used against you. Like just being aware of that I think can make you a more potent investor. So I hope that this served you. I hope it brought you some value. If you want to go even deeper into this topic, My partner, Dan Krueger and I on our other podcast, multi-Family Investing, made it Simple.
Anthony: We did a 50 minute deep dive into the [00:15:00] story. go check that out. You can check it out at multi-family investing podcast.com. And, that’s going to do it for me guys, as always, like, it’s so cool that you’re here, you’re joining in, you’re trying to be a little bit better tomorrow than you were today. And like, I, I think that’s just a really noble pursuit.
Anthony: And so I appreciate you, you know, joining me as I’m pursuing the same thing. If you think there’s somebody else out there in your life that would also benefit from joining this journey with us, like, do me a favor, share this podcast with them. Seriously, it’s how the podcast grows. It’s how we keep reaching out to new and, new and awesome people and the means the world to me.
Anthony: Surely it does. So that’s going to do it for me guys. As always, keep being great and I’ll see you in the next episode.
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