Former Owner and Officer of Long Island Mortgage Lender Sentenced to 24 Months in Jail for $8.9 Million Fraud | USAO-EDNY
Earlier today at the Central Islip federal courthouse, Edward E. Bohm, former president of sales and co-owner of Garden City, New York-based mortgage lender Vanguard Funding, LLC (Vanguard), was sentenced by the United States District Judge. Joanna Seybert to 24 months in prison in connection with the misappropriation of more than $8.9 million in warehouse loans that Vanguard had fraudulently obtained allegedly to fund home mortgages and mortgage refinances. Bohm was also ordered to pay $3,488,615.42 in restitution and $1,500,000 in criminal forfeiture. In February 2019, Bohm pleaded guilty to conspiracy to commit wire and bank fraud.
Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Deputy Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Adrienne A. Harris, Superintendent, State of New York Department of Financial Services (DFS), announced the penalty.
“With today’s sentence, Edward Bohm has been rightly punished for his role in a fraudulent scheme that deceived the banks that trusted and relied on him as a business partner. Bohm misappropriated the proceeds of the loan to, among other things, pay tens of thousands of dollars in monthly expenses by personal credit card and fund the luxury home he was living in,” the U.S. peace attorney said. “This office, in together with our law enforcement partners, will vigorously investigate and prosecute those who commit fraud to advance their own financial interests at the expense of the businesses and residents of our district.”
“Edward Bohm and his associates at Vanguard Funding defrauded financial institutions that provide essential residential mortgage financing, self-serving short-term loans they falsely claimed were on behalf of consumers,” Superintendent DFS said. Harris. “As New York’s Financial Services Regulator, I am proud of the Mortgage Bank Examiners and DFS Criminal Investigators who participated in the investigation that brought Bohm to justice and who will continue to root out fraud on behalf of all new Yorkers.”
Between August 2015 and March 2017, Bohm and his co-conspirators at Vanguard engaged in a scheme in which they obtained more than $8.9 million in short-term loans, called warehouse loans, by falsely claiming that the loan proceeds would fund specific mortgages. , or refinance specific mortgages, for Vanguard customers. Instead, Bohm and his co-conspirators diverted the funds to pay personal expenses and allowances, and to repay loans they had previously obtained through bogus loan applications. Bohm is the third defendant to be convicted in connection with this scheme. On February 6, 2019, Vanguard Senior Vice President and Chief Financial Officer Edward J. Sypher, Jr., was sentenced to 18 months in prison and $3,488,615.42 in restitution to the following his conviction for conspiracy to commit wire and bank fraud charges. On February 26, 2019, Vanguard Chief Operating Officer Matthew T. Voss was sentenced to 24 months in prison and restitution of $3,488,615.42 following his conviction for conspiracy to commit charges of wire and bank fraud.
The government case is being prosecuted by Assistant United States Attorney Whitman GS Knapp, with the assistance of Special Agent Martin Sullivan of the Bureau’s Business and Securities Fraud Section. Assistant United States Attorney Madeline O’Connor of the Bureau’s Asset Recovery Section handles forfeiture cases.