Steven D. Blumhagen, a 74-year-old resident of Buffalo, New York, has been sentenced to five years in prison for wire fraud. The announcement was made by U.S. Attorney Michael DiGiacomo, following the sentencing by U.S. District Judge John L. Sinatra, Jr.
Assistant U.S. Attorney Paul E. Bonanno explained that between April 2016 and January 2020, Blumhagen defrauded three investors of $400,000. He solicited investments under the pretense of financing legal marijuana operations, real estate developments, and investment technology through entities he claimed to own or manage. However, instead of fulfilling these promises, Blumhagen used the funds for personal expenses and repaid earlier victims with new investments.
The fraudulent scheme led at least one victim to suffer significant financial hardship after withdrawing retirement funds and incurring penalties.
Blumhagen's criminal history includes two prior federal convictions in the Western District of New York. In 2006, he pleaded guilty to conspiracy to commit mail fraud related to a golf course project named Tee-to-Green, resulting in a sentence of 57 months in prison and over $10 million in restitution. In 2018, he admitted guilt to bank theft involving a bond scheme that raised more than $1.4 million from investors; he was sentenced to time served and ordered to pay over $1.2 million in restitution.
At the time of committing the wire fraud offense, Blumhagen was on pre-trial release for his bank theft charge.
The investigation leading to this sentencing was conducted by the Federal Bureau of Investigation under Special Agent-in-Charge Matthew Miraglia's direction.
