Two Mortgage Company Executives Plead Guilty to Fraud

Two mortgage company senior executives recently pleaded guilty in federal court to wire and bank fraud charges stemming from a scheme in which they conspired to obtain over $8.9 million in warehouse loans from banks by materially misrepresenting their intended use for the loans.

According to court filings, during the period from August 2015 to March 2017, the Chief Financial Officer and Chief Operating Officer of a mortgage company participated in a scheme to defraud a number of banks falsely representing that warehouse loans would be used to fund mortgage loans to the mortgage company’s borrowers, when in fact they used the loan proceeds to pay for their own personal expenses and compensation and to pay off loans that they had previously fraudulently obtained.

When they are sentenced, the executives face up to 20 years in prison, as well as restitution, criminal forfeiture, and fines.  The New York State Department of Financial Services has also suspended the mortgage company’s license.

The cases are USA v. Voss, case number 2:18-cr-27 and USA v. Sypher, case number 2:18-cr-28, in the U.S. District Court for the Eastern District of New York.