Copyright © 2017 Albuquerque Journal
Matthew Sample is a great salesman.
But his biggest sales pitch might be to stay out of prison.
Sample, 42, swindled six sets of victims out of roughly $1 million from 2009 to 2012, according to a federal charging document filed against him.
Several of his victims live in Santa Fe, and much of the money taken wiped out the victims’ retirement or college funds.
Sample used the ill-gotten gains to purchase drugs and live a lavish lifestyle in Santa Fe. Gold was woven into the wallpaper of his home.
He has pleaded guilty to fraud and wire fraud in the case – but now the question is how long should he spend behind bars?
While awaiting his March 23 sentencing, he landed a lucrative job in California, and his bosses vouch for him, saying he is one of their best salesmen.
Sample says he can only make amends and pay restitution if he is allowed to remain free and keep his job.
Prosecutors say he needs to serve some time and not “just buy his way out of jail.”
According to the plea agreement and recently filed sentencing memorandums, Sample raised $932,000 from investors in The Lobo Volatility Fund LLC, a Delaware limited liability company he created.
His clients included a couple in their 90s, according to federal court documents.
But instead of an investment firm, it was a scheme in which Sample took money from the fund or other trading accounts to pay for his lavish lifestyle.
Sample’s home was featured on “House Hunters” on HGTV, and the show’s host described it as the “ultimate party house!”
His Facebook photos show him “living it up” at ballparks, arenas, bars, cruises and at the beach, according to a sentencing memorandum by the U.S. Attorney’s Office for the District of New Mexico.
To cover up his scheme, Sample moved money around among his clients, mixed it with his own, held weekly phone and quarterly meetings with his clients and sent them false statements that showed their accounts were profitable.
He even created a fake website about the investment fund, according to the documents.
Eventually, after not receiving money as a result of their investments, several of Sample’s victims complained to the FBI and the U.S. Securities and Exchange Commission, which first brought civil litigation against him. As a result of that litigation, Sample was barred from associating with any broker, dealer or investment adviser.
Federal fraud and wire fraud charges were filed against Sample in 2015, and he pleaded guilty to them during his first appearance, according to court records.
‘Bernie Madoff clone’
In letters to U.S. District Judge Judith Herrera, his investors described their frustrations in dealing with Sample’s alleged hedge fund.
“He is an actor with an upbeat optimistic personality and used his professionalism to convince us our investments were continuing with steady moderate gains,” a 56-year-old woman identified as N.C. wrote in a victim impact statement filed in court.
“His ability to lie face to face, on the phone, in emails, text messages, letters and his creation of a fake website to show us our account is absolutely insane.”
N.C. said she and her 60-year-old husband gave Sample their entire retirement fund, and she described him as a “Bernie Madoff clone.”
Another couple, L.D. and B.D., said in their statement they invested $690,000 in the Lobo Fund. They had known Sample for much of his life.
“There is not a day that goes by that I don’t wonder how we could have been so stupid,” the couple’s statement read.
Though the federal documents in the court case don’t identify any of the victims, defense documents state that in the past year Sample has paid restitution to eight people.
Drugs and violence
In an emotional plea to Herrera during his sentencing hearing last month, Sample said he is trying to make amends.
He said he was molested as a boy and spent much of his life concealing that he was gay. Originally from a Chicago suburb, Sample was an athlete in high school and was valedictorian of his class. He graduated from Duke University.
But after getting a divorce from his wife, he moved to Santa Fe, started living as an openly gay man, and his life spiraled out of control, he said.
He started doing cocaine, ecstasy, GHB and other drugs, he said, and he was a victim of repeated domestic violence in his first gay relationship.
Eventually, he created the scheme and he is now facing a prison sentence for it.
“I did commit those crimes,” Sample said. “I’m trying to make things right.”
In a little more than a year, Sample has paid nearly $60,000 in restitution, according to court documents. And he promised to keep making more payments – as long as he can stay out of prison.
“I don’t have any assets, but I have earning potential. I’m working as hard as I can to make restitution,” he said. “They can’t get (their money) back without me.”
In April 2015, while under investigation for fraud, Sample was hired at SettlementOne, a San Diego-based company that sells appraisal services to banks and mortgage companies, Brandon Melanese said in the court hearing.
Melanese, who supervises Sample, said he has flourished at the company, far surpassing all his sales goals.
In 2016, Sample earned $113,000 in commissions, and – if he’s not in prison – he has earned a trip to Hawaii as a reward for his performance.
Melanese said Sample was recently promoted and his new job will allow his commissions to grow this year.
“Matthew has by far been one of the top individuals I’ve worked with,” he said. “I wouldn’t be here if the company wasn’t in support and wanted to keep Matthew.”
Despite his high salary last year, Sample said he is living in a cheap apartment in California without air conditioning so he can make payments to creditors and his victims.
“If I do get incarcerated, I’m unlikely to get a job of the same quality,” Sample said.
Restitution in dispute
Assistant U.S. Attorney Fred Federici asked in court documents for a 61â„2-year prison sentence plus restitution. That’s the low end of federal sentencing guidelines for the crimes to which Sample has pleaded guilty.
“It is not appropriate for him to be able to essentially buy his way out of jail,” Federici said in court. “What that signal says is that crime pays. If you commit a white-collar crime, the worst that can happen to you is you have to pay it back.”
U.S. attorneys and Sample’s attorneys disagree about how much Sample still owes the victims in the case.
Ray Twohig, Sample’s attorney, said in a sentencing memorandum that his client owes about $710,000. Prosecutors said he stole about $1.2 million.
The plea agreement calls for the court to decide how much restitution is owed.
Numerous spreadsheets of various banking accounts and trading funds, made by FBI agents and analysts and defense experts, were submitted to the court.
Herrera said she will review the documents before handing down a sentence.