Former Vice President of Wholesale Tool Company Sentenced to 63 Months in Prison for Role in $9 Million Bank Fraud Scheme
The former vice president of a California wholesale tool company was sentenced to 63 months in prison today for his role in a scheme to defraud East West Bank that resulted in losses of over $9 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Assistant Director in Charge Deidre Fike of the FBI’s Los Angeles Division, Acting Special Agent in Charge Anthony J. Orlando of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Los Angeles Field Office and Special Inspector General Christy Goldsmith Romero of the Troubled Asset Relief Program (SIGTARP) made the announcement.
Chung Yu Yeung, aka Louis Yeung, 39, of San Dimas, California, was sentenced by U.S. District Judge Christina A. Snyder of the Central District of California. Judge Snyder also ordered Yeung to pay $9,618,908.34 in restitution and to forfeit a San Dimas property that was purchased with proceeds of the scheme. On March 30, 2016, Yeung pleaded guilty to one count of conspiracy to commit bank fraud and four counts of bank fraud.
As part of his guilty plea, Yeung, a former vice president of Eastern Tools & Equipment Inc. (Eastern Tools) of Ontario, California, admitted that he and his co-conspirators defrauded East West Bank by making material misrepresentations about Eastern Tools’ accounts receivable and its financial statements to obtain and maintain a loan with the bank. The conspirators created numerous shell corporations to act as purported suppliers and retailers doing business with Eastern Tools, when, in reality, these shell corporations were entirely under the control of Yeung and existed for the sole purpose of creating the illusion of such business, he admitted. Yeung also admitted that the fictitious companies allowed Yeung and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank.
Yeung admitted that in order to further the scheme, he and others opened post office boxes, phone accounts and email accounts purportedly associated with the shell retail companies, and provided information about them to East West Bank auditors, to promote the illusion that these shell customers were independent entities.
Eastern Tools defaulted on the loan after East West Bank discovered the fraud, causing more than $9 million in losses to the bank, Yeung admitted.
The FBI, IRS-CI and SIGTARP investigated the case. Senior Litigation Counsel David A. Bybee of the Criminal Division’s Fraud Section prosecuted the case.