Northport Man Among Trio Charged In $8.9 Million Mortgage Fraud: U.S. Attorney

Three senior executives at a Long Island mortgage lender were arrested for their role in committing a $8.9 million fraud, according to the U.S. Attorney’s Office.

Edward E. Bohm, 39, of Nissequogue, Edward J. Sypher, Jr., 40, of Scarsdale and Matthew T. Voss, 42, of Norhtport, all senior executives at Vanguard Funding, LLC (Vanguard), were charged with conspiracy to commit wire and bank fraud by using millions of dollars in warehouse loans for Vanguard to fund mortgages, according to the U.S. Attorney.

The trio misused the loans to pay personal expenses and compensation, as well as to repay earlier fraudulently obtained loans, the U.S. Attorney said.

Between August 2016 and March 2017, Voss, Vanguard’s COO, Sypher, the CFO, and Bohm, the president of sales, engaged in a scheme in which they obtained warehouse loans, or short-term loans, for the company by falsely representing that Vanguard would use the proceeds of those loans to fund mortgages or mortgage refinancing for clients, the U.S. Attorney said.

Once Vanguard received the loans, however, the trio used the funds to pay personal expenses and compensation and to pay off loans they had previously obtained with fraudulent loan submissions, according to the U.S. Attorney.

Officials identified almost $9 million in loans that were fraudulently obtained and misused, the U.S. Attorney said.

In a recorded conversation with a co-conspirator in 2017, Bohm expressed confidence that they would evade criminal liability because the victims of their scheme were financial institutions.

“At the end of the day, the s--- we did wasn’t to the public,” Bohm said in part, according to the complaint.

If convicted, the three face a maximum of 30 years in prison for bank fraud conspiracy and 20 years for wire fraud conspiracy.

All three were arrested on Tuesday morning.

“As alleged, the defendants – executives of a mortgage lender – defrauded banks into lending them money by stating that the money would fund new mortgages or refinance existing ones,” Acting United States Attorney Bridget Rohde said. “We will continue to address dishonesty in the mortgage industry whether the victims are financial institutions, investors, or homeowners, as it ultimately hurts all of us as a community.”