A 42-year-old Lehi man pleaded guilty to wire fraud and money laundering in Salt Lake City in connection with a scheme that prosecutors say pulled in more than $60 million from hundreds of investors. Matthew Morrison Bates admitted his role in the collapse of Hedgehog Investments LLC, a company federal authorities say promised investors sky-high returns while using fresh cash from new victims to pay off earlier ones.
According to KSL News, Bates was charged with conspiracy to commit wire fraud and money laundering after a federal felony complaint accused him on September 30. Per the charges, Bates received more than $60 million from hundreds of investors who were defrauded through false promises made in Hedgehog Investments' name. The scheme is alleged to have run from May 2020 through June 2025, the outlet reports.
How the Alleged Scheme Worked
Prosecutors say Hedgehog Investments used the promise of bridge loans to attract companies that were seeking financial assistance to reduce debt and maximize their creditworthiness, per the same KSL account. But the U.S. Attorney's Office of Utah alleges the company did not actually extend those bridge loans — instead, it paid investor returns with money collected from new investors, the hallmark of a classic Ponzi structure.
Federal prosecutors say Bates and Hedgehog Investments solicited investors through in-person meetings, phone calls, electronic communications, websites, and social media. Investors were promised returns ranging from 20% to 100% of their principal, according to the felony charges described in the station's report. Per the same account, Bates is accused of using dozens of materially false statements to investors to keep the money flowing.
A Separate Securities Order and a Pending Lawsuit
Utah's Division of Securities had already taken action against the company months before the federal case became public. In May 2025, the division issued an emergency order to cease and desist against Hedgehog Investments and various affiliated individuals and entities, according to an account from Silver Law Group.
Separately, court records show Bates and Hedgehog Investments are also involved in an ongoing state case brought by a former investor alleging securities fraud. And in January, a proposed class action — Robert Klingler v. Matthew Morrison Bates et al. — was filed in the U.S. District Court for the District of Utah, according to a report from Naples Daily News. That filing concerns Hedgehog Investments promissory notes and alleges investor funds were misused in a scheme resembling a Ponzi scheme; as the outlet notes, no class has been certified, and the court has not ruled on the merits of those allegations.
What Comes Next for Bates
Bates is scheduled to be sentenced on January 12, 2027, per KSL's reporting on the federal case. A Justice Department search-result snippet separately describes a sentencing date of January 12, 2027, at 11 a.m. and puts investor losses at more than $60 million, though that detail comes from a limited excerpt rather than a full release. For the hundreds of investors who put money into Hedgehog Investments over five years, the coming months will determine what, if anything, is left to recover — and what sentence a judge ultimately hands down.
