MegaBowl Owner Matthews Hit With 5 Years Probation in $1.5M Fraud

BEAUMONT, TX – Kenneth W. Matthews, 59, of Fort Pierce, Florida, is trading the bowling alley for a lifetime of financial regret. The former owner of Port Arthur’s MegaBowl was sentenced to five years probation today after pleading guilty to conspiracy to defraud the Small Business Administration (SBA). U.S. District Judge Thad Heartfield also ordered Matthews to pay a hefty $500,000 in restitution – a fraction of the $1.5 million he illegally obtained.

The scheme, cooked up between January 2008 and May 2010, involved inflating invoices and checks for repair work following the devastating Hurricanes Humberto and Ike. Matthews colluded with his general contractor and a subcontractor, falsely claiming higher repair costs to secure low-interest disaster loans. The SBA shelled out $750,000 after Humberto and another $760,000 following Ike, funds explicitly intended for hurricane-related repairs – not for padding Matthews’ pockets.

The operation was a classic kickback scheme. After receiving the loan disbursements based on the fabricated invoices, the general contractor and subcontractor received less than the invoiced amount for the actual work completed, or were directly paid a portion of the loan funds by Matthews. Essentially, Matthews was skimming from disaster relief, diverting funds meant to rebuild the community for personal gain. The SBA wasn’t impressed.

Federal investigators from the Small Business Administration-OIG and the FBI painstakingly untangled the fraudulent web. Assistant U.S. Attorney Robert L. Rawls spearheaded the prosecution, presenting evidence that clearly demonstrated Matthews’ central role in the conspiracy. While Matthews’ declining health was noted as a factor during sentencing, it didn’t erase the damage done.

This case is a stark reminder that federal disaster relief funds are not free money. The U.S. Department of Justice, through the Hurricane Katrina Fraud Task Force – established in 2005 to combat disaster-related crimes – is actively working to prosecute those who exploit national tragedies for personal profit. The Task Force, comprised of agencies like the FBI and the Federal Trade Commission, sends a clear message: fraud will be investigated, and perpetrators will be held accountable.

Matthews’ five-year probation and $500,000 restitution order serve as a warning to others considering similar schemes. While the sentence may seem lenient, it’s a federal felony conviction that will follow him for life. Grimy Times will continue to follow this case and report on any further developments.