Braintree Loan Officer Gets Prison, Must Pay Back $1M In Loan Scheme

BRAINTREE, MA — A Braintree man is among three people who will serve one year and one day in prison as part of a loan application scheme that was meant to defraud banks and the U.S. Small Business Administration, officials said.

Ted Capodilupo, 58, of South Easton, and Joseph Masci, 72, of Boston, operated a loan brokerage business while Brian Ferris, 45, of Braintree, was a loan officer. Together, they worked as part of the conspiracy, Department of Justice officials said.

Recently, they were each sentenced to prison and two years of supervised release.

Additionally, Capodilupo and Masci were each ordered to pay restitution of $1,424,087 and Ferris was ordered to pay restitution of $1,236,251. The defendants previously pleaded guilty to one count each of conspiracy to commit bank fraud.

Between 2015 and 2018, Capodilupo, Masci and Ferris agreed to defraud a bank and the SBA by submitting fraudulent loan applications to the bank, which administered the SBA’s small business express loan program, to secure bank loans guaranteed by the SBA, officials said.

Specifically, Capodilupo and Masci submitted dozens of fraudulent loan applications on behalf of borrowers who were ineligible for traditional business loans. These loan applications misrepresented, among other things, the identity of the real loan recipients and the businesses for which the loans were sought.

Capodilupo and Masci also falsified applicant signatures and falsely indicated that no broker had assisted in preparing or referring the loan applications when they actually charged borrowers excessive fees for obtaining these fraudulent loans.

Ferris, who worked as a loan officer at the bank, processed the fraudulent loan applications and in some cases fabricated federal tax forms in support of the applications, officials said.

Ferris caused the bank to issue loans for which Capodilupo and Masci submitted applications and received a kickback from Capodilupo and Masci of approximately $500 per loan.

The scheme generated approximately $270,000 in fees for Capodilupo and Masci.

Many of the loans that the bank issued as a result of the fraudulent applications ultimately defaulted, resulting in substantial losses to the bank.