Buffalo man pleads guilty to $400,000 fraud

Feb. 9—A Buffalo man with two prior felony convictions pleaded guilty Thursday to defrauding three investors out $400,000 that was supposed to finance legal marijuana operations, real estate developments, and an investment technology.

In reality, Steven D. Blumhagen used their money for personal expenses, including rent and loans, and to make payments to one of the victims, according to prosecutors.

Blumhagen pleaded guilty to one count of wire fraud as his trial was about to begin on a 17-count indictment that accused him of wire and mail fraud. Sentencing is scheduled for June 9 before U.S. District Judge John L. Sinatra.

Blumhagen has two prior federal convictions. 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, according to the U.S. Attorney's Office. 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 $1.2 million in restitution.

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