(WNY News Now) – A three-time convicted federal felon has been sentenced for defrauding investors out of hundreds of thousands of dollars in a years-long wire fraud scheme.

BUFFALO, N.Y. – Steven D. Blumhagen, 74, of Buffalo, has been sentenced to five years in federal prison for wire fraud, U.S. Attorney Michael DiGiacomo announced on Wednesday. U.S. District Judge John L. Sinatra, Jr. handed down the sentence following Blumhagen’s conviction for orchestrating a fraudulent investment scheme.

Between April 2016 and January 2020, Blumhagen solicited a total of $400,000 from three investors by promoting interests in business ventures he claimed to manage. According to Assistant U.S. Attorney Paul E. Bonanno, Blumhagen promised substantial returns from investments in legal marijuana enterprises, real estate projects, and proprietary financial technology.

Instead of funding the ventures, Blumhagen used investor funds for personal expenses and to repay previous victims, creating a cycle of deception. He also falsely claimed that one of the investment entities was owned by his children, who were unaware of its existence. One victim suffered significant financial hardship after withdrawing retirement funds to invest, incurring heavy penalties.

Blumhagen’s conviction marks his third federal fraud-related offense. In 2006, he was sentenced to 57 months in prison and ordered to pay over $10 million in restitution for a mail fraud conspiracy involving a golf course investment scheme. In 2018, he pleaded guilty to bank theft connected to a bond investment scheme, resulting in more than $1.4 million in losses. He was on pre-trial release for the latter case when he committed the wire fraud offense.

The case was investigated by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Matthew Miraglia.