CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051
BUFFALO, N.Y. – U.S. Attorney Trini E. Ross announced today that Steven D. Blumhagen, 71, of Buffalo, NY, pleaded guilty before U.S. District Judge John L. Sinatra, Jr. to wire fraud, which carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorneys Jonathan P. Cantil and John D. Fabian, who are handling the case, stated that between April 2016, and January 2020, Blumhagen defrauded three investors out of $400,000, by soliciting the victims to purchase interests in entities he claimed to own, manage, or control. Blumhagen told victims that their investments would enable those entities to finance legal marijuana operations, real estate developments, and an investment technology, and that they could expect significant returns on their investments. Instead of using the money as promised, Blumhagen used some or all of the money for personal expenses. He also used the investment of one victim to pay back previous victims. Part of the scheme involved a limited liability company allegedly owned by Blumhagen’s children, which they knew nothing about.
As a result of the scheme, at least one victim experienced a substantial financial hardship, withdrawing funds from a retirement account, resulting in substantial penalties.
Blumhagen has two prior federal convictions in the Western District of New York. In 2006, he pleaded guilty to conspiracy to commit mail fraud for bilking investors out of more than $10,000,000 related to his sale of shares in the golf course project Tee-to-Green, and was sentenced to serve 57 months in prison and ordered to pay more than $10,000,000 in restitution. In 2018, Blumhagen pleaded guilty to bank theft for his involvement in a bond scheme, which raised more than $1,400,000 from potential investors. Blumhagen was sentenced to time served and ordered to pay more than $1,200,000 in restitution. Blumhagen was on pre-trial release for the bank theft charge when he committed the wire fraud.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Acting Special Agent-in-Charge Darren Cox.
Sentencing is scheduled for June 9, 2023, before Judge Sinatra.
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originally published at HUMAN RIGHTS - USA DAILY NEWS 24