Two Long Islanders conspired with another New Yorker to commit wire and bank fraud to obtain $9 million in mortgage loans, which they partly spent on personal expenses, prosecutors said on Tuesday.
One executive of the firm, Vanguard Funding LLC, was recorded telling a co-conspirator that they would not be prosecuted because they were taking money from banks instead of the public, the federal criminal complaint said.
That executive was Edward E. Bohm, 39, of Nissequogue, the complaint said.
Bohm, Edward J. Sypher Jr., 40, of Scarsdale, and Matthew T. Voss, 42, of Northport, face prison sentences as long as 30 years if convicted of bank fraud conspiracy and 20 years if convicted of wire fraud conspiracy, prosecutors said.
“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 U.S. Attorney Bridget M. Rohde said in a statement.
“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,” she added.
The trio were arrested on Tuesday. Bail of $300,000 was set for Voss and Sypher, prosecutors said, while Bohm was placed on home detention without a bond.
Voss’ attorney, Brian Griffin of Garden City, said his client “flatly denies the allegations and he will defend his actions in court.”
When Voss joined Vanguard “it was in significant financial distress,” Griffin said, adding his client’s efforts and diligence “mitigated the severity of the financial harm to the company and others.”
The other defendants’ lawyers were not immediately available Tuesday.
Prosecutors charged that Voss, chief operating officer of Vanguard, Sypher, chief financial officer, and Bohm, sales president, persuaded banks to give them short-term loans to fund mortgages or mortgage refinancing for Vanguard clients. Vanguard has a principal office in Garden City.
Between August 2016 to March 2017, the trio used the money not just for personal expenses but for compensation and to pay off loans they received earlier through “fraudulent loan submissions,” the complaint said.
So far, prosecutors said they have uncovered $8.9 million of “fraudulently obtained, and subsequently misused, loans.”
This year, Bohm, “expressed confidence” that their choice of victims — banks instead of individuals — would shield them from prosecution, the complaint said.
“‘At the end of the day, the [expletive] we did wasn’t to the public’ Bohm stated in part,” the complaint said.