Former Top Executives Vanguard Funding Charged In Connection With $8.9M Fraud

Three senior executives at Vanguard Funding LLC, a Long Island-based mortgage lender, were arrested on conspiracy to commit bank fraud and wire fraud Tuesday. All three defendants obtained over $8.9 million in warehouse loans for Vanguard.

Forty-two-year-old Matthew T. Voss of Northport, New York, 40-year-old Edward J. Sypher, Jr. of Scarsdale, New York and 39-year-old Edward E. Bohm of Nissequogue, New York allegedly utilized the fraudulent funds to repay fraudulent loans obtained earlier on, compensation and pay personal expenses, according to the complaint unsealed Tuesday.

Bohm, President of Sales, Sypher, Chief Financial Officer, and Voss, Chief Operating Officer, allegedly obtained short-term loans or warehouse loans for Vanguard by saying the proceeds would be utilized to fund mortgage refinancing or mortgages for the financial institution’s clients. The nearly $9 million was not utilized for those purposes, but was subsequently misused, according to court documents.

Judge And JuryInvestigators obtained a recorded conversation between Bohm and a co-conspirator, in which he said they would avoid criminal liability since the victims were financial institutions.

“At the end of the day, the s— we did wasn’t to the public,” Bohm was recorded saying in the conversation, according to the complaint.

If indicted, all three defendants will face a maximum 20-year prison sentence for wire fraud conspiracy and an additional 30-year sentence for bank fraud conspiracy.

“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,” stated Acting United States Attorney Rohde.  “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.”

“These defendants, for their own gain, allegedly defrauded the financial institutions that provide funding for individuals to buy homes, and they must be held accountable,” said Financial Services Superintendent Vullo.  “As the regulator and protector of financial services companies in New York, the Department of Financial Services is proud to have assisted the Acting United States Attorney in bringing these defendants to justice.”

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