Minnesota real estate agents charged over ties to fraudster who bilked banks of $35M

Two Minnesota real estate agents face federal charges for alleged ties to a $35 million bank fraud committed by a former Mayo Clinic nurse anesthetist turned self-proclaimed real estate mogul.

Merl Groteboer, of Rochester, was charged Friday in U.S. District Court for Minnesota with one count of making false statements in connection with Matthew Onofrio’s bank fraud-fueled property schemes.

Chad Forga, of Minneapolis, was charged in the same court earlier this month with conspiring with Onofrio to commit bank fraud.

Onofrio, an Eau Claire man who touted his real estate acumen online, pleaded guilty to bank fraud in 2023, and must forfeit $35.7 million in ill-gotten gains seized from his account at Premier Bank in Rochester.

Onofrio, who has yet to be sentenced, faces 121 to 151 months in prison under his plea agreement.

Groteboer and Forga were both charged via felony information, a process whereby defendants forgo a grand jury proceeding, cooperate with prosecutors and often plead guilty.

Onofrio, in podcasts and other media appearances, told interviewers how he graduated from college in 2019 and worked as a nurse, paramedic, firefighter and nurse anesthetist before making an immensely profitable switch to real estate.

He was featured in a YouTube video titled “How An Anesthesiologist Became a Real Estate Mogul Worth $160 Million.” The clip has since been taken down.

But federal prosecutors claimed in 2022 that Onofrio defrauded banks — including Bloomington-based MidCountry Bank — by submitting false information to lenders financing real estate deals.

Onofrio was also accused of altering purchase agreements to back up higher appraisals of properties and allegedly withholding information from lenders.

Groteboer had a personal friendship and business relationship with Onofrio from sometime in 2020 to at least March 2022, charges say. He advised and assisted Onofrio, and served as a broker for Onofrio on several property deals.

Groteboer also participated in loan approvals by a bank on whose board of directors he served, the charges say. Groteboer was a director of Premier Bank Minnesota, though the bank said this week he is no longer on the board.

Groteboer allegedly made “false, fictitious and fraudulent” statements about Onofrio’s business dealings during an interview with the FBI in March 2023, the charges say.

Groteboer declined to comment.

Forga, who also owns property companies, allegedly conspired with Onofrio and others to fraudulently obtain bank loans to buy commercial real estate between November 2020 to March 2022.

Forga and Onofrio agreed that Forga’s businesses would buy six commercial properties financed with bank loans. But charges say Onofrio and Forga provided false and misleading information to lenders — and concealed material facts.

Forga borrowed a total of $26.2 million.

“Forga has cooperated with the government’s investigation from its earliest stages,“ said his attorney Stephen Miller. ”Also, he has worked hard to divest from properties obtained through Mr. Onofrio and repay those lenders.” His “character” is not defined “by these charges,” Miller said.

MidCountry Bank in February 2023 sued Forga and one of his companies, RLLR, for defaulting on a $9.7 million mortgage for a commercial property in St. Cloud.

The loan essentially financed a sale of the property from Onofrio to Forga, federal court records show.

In state court, MidCountry Bank claimed that RLLR and Forga, who guaranteed the loan, falsified the purchased property’s purchase price and provided false information to secure the loan — in addition to failing to make payments.

The property was put into receivership and sold, but the proceeds came up short of the money that Forga owed to MidCountry Bank.

In March 2024, Stearns County District Court Judge William Cashman ordered a $3.37 million judgement against Forga for the balance of the loan plus interest, fees and penalties.