The former chief financial officer of a Long Island lender was sentenced to 18 months in prison Wednesday after taking loan money for his personal use, the U.S. Attorney's office that represents Long Island said.
Edward Sypher Jr., 42, of Scarsdale, was also ordered to serve three years of post-release supervision, forfeit $22,150.45 and pay restitution in an amount that will be determined later, prosecutors said.
Sypher had pleaded guilty in February to conspiring to commit wire and bank fraud with others at the now-defunct Vanguard Funding by fraudulently obtaining $8.9 million, purportedly to bankroll home mortgages and mortgage refinancing, authorities said.
“When fraudsters treat investors like their own personal ATMs, using funds invested in good faith to line their own pockets, pay for personal expenses, and repay other fraudulent loans, confidence in the integrity of our financial systems suffers,” William F. Sweeney, Jr., assistant director in charge of the New York FBI office, said in a news release.
Vanguard, based in Garden City, was a 33-branch mortgage lending institution licensed in several states, including New York, when Sypher and other executives were charged with cheating "warehouse lenders," which issue lines of credit to companies in the mortgage business so they can lend to the public or refinance borrowers' loans.
Between August 2015 and March 2017, Sypher and his co-conspirators lied to get warehouse loans by saying the funds would be used for specific mortgages or refinancing for Vanguard clients, prosecutors said. Instead, they diverted the funds to pay personal expenses and compensation and to pay off loans they had previously obtained through fraudulent loan applications.
On December 10, Matthew T. Voss, Vanguard’s former chief operating officer, was sentenced to two years in prison after pleading guilty to conspiring to commit wire and bank fraud.