A Boston man, Lonnie Smith-Matthews, 33, has been indicted by a federal grand jury after being accused of carrying out a large-scale scheme involving loan fraud and stolen checks. Smith-Matthews is facing several serious federal charges, including wire fraud, bank fraud, money laundering, and theft of government funds.
Fraudulent Loans and False Claims
According to the indictment, the fraud began in 2021 during the time when the federal Paycheck Protection Program (PPP) was helping businesses stay afloat. Prosecutors say Smith-Matthews applied for and received two PPP loans by lying about his income and pretending he had a business that did not really exist. In his loan applications, he claimed to have earned $128,000 in business income. In reality, investigators say he made less than half of that amount and had no active business at all.
The PPP loans were meant to support small businesses struggling through the pandemic. By making false claims, authorities say Smith-Matthews took money that was supposed to help real business owners.
Stolen and Forged Checks
The indictment also lays out accusations connected to stolen and altered checks. In 2024, prosecutors say Smith-Matthews deposited a U.S. Treasury tax refund check worth $150,000. This check had been issued to a married couple in North Carolina as a legitimate tax refund on their 2023 income taxes. Investigators allege that the check was altered to make it payable to a clothing company that Smith-Matthews once owned but had since closed.
After depositing the tax refund check, prosecutors say Smith-Matthews laundered the money by converting it into cashier’s checks. These were made out to what appeared to be a roofing company. Officials claim this was an attempt to hide the true source of the stolen money.
Later in 2024, investigators say Smith-Matthews obtained another check, this time for $232,000, that belonged to a law firm in New York. Just like the tax refund check, this one had allegedly been changed to make it payable to his defunct company. Authorities say both checks were stolen, altered, and deposited to gain money that did not belong to him.
Federal Charges and Penalties
The indictment lists multiple charges, each carrying severe penalties if convicted. The charge of theft of government funds can lead to up to 10 years in prison, along with three years of supervised release and a fine of up to $250,000. The wire fraud charge carries up to 20 years in prison, three years of supervised release, and a fine of up to $250,000.
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Bank fraud, one of the most serious charges, could bring up to 30 years in prison, five years of supervised release, and a fine of up to $1 million. Money laundering is also included, with a maximum penalty of 20 years in prison, three years of supervised release, and fines up to $500,000.
Smith-Matthews was arrested in June 2025 during a federal crackdown on stolen U.S. Treasury checks. He is expected to be arraigned in federal court in Boston at a later date.
The announcement was made by U.S. Attorney Leah B. Foley, along with Thomas Demeo, Acting Special Agent in Charge of IRS Criminal Investigation in Boston, Michael Carpenter, Special Agent in Charge of the Treasury Inspector General for Tax Administration, and Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division. The case is being prosecuted by Assistant U.S. Attorney Kriss Basil, Deputy Chief of the Securities, Financial & Cyber Fraud Unit.
It is important to note that the charges are still allegations. Smith-Matthews is considered innocent unless and until proven guilty beyond a reasonable doubt in court.