Former Owner and Executive at Long Island Mortgage Lender Sentenced to 24 Months' Imprisonment for $8.9 Million Fraud
Defendant and Co-Conspirators Misappropriated Money Obtained to Fund Mortgage Loans
Earlier today, at the federal courthouse in Central Islip, Edward E. Bohm, formerly the President of Sales and part-owner of mortgage lender Vanguard Funding, LLC (Vanguard), based in Garden City, New York was sentenced by United States District Judge Joanna Seybert to 24 months’ imprisonment in connection with the diversion of more than $8.9 million of warehouse loans that Vanguard had fraudulently obtained purportedly to fund home mortgages and mortgage refinancing. 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 conspiring to commit wire and bank fraud.
Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Adrienne A. Harris, Superintendent, New York State Department of Financial Services (DFS), announced the sentence.
“With today’s sentence, Edward Bohm has been deservedly punished for his role in a fraudulent scheme that deceived banks that trusted and relied upon him as a business partner. Bohm diverted the loan proceeds to, among other things, pay tens of thousands of dollars in monthly personal credit card expenses and finance the luxury house in which he lived,” stated United States Attorney Peace. “This Office, 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 businesses and residents of our district.”
“Edward Bohm and his associates at Vanguard Funding defrauded the financial institutions that provide critical residential mortgage funding, helping themselves to the short-term loans they falsely claimed were on behalf of consumers,” stated DFS Superintendent Harris. “As New York's financial services regulator, I am proud of DFS’s mortgage banking examiners and criminal investigators who assisted 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, referred to as warehouse loans, by falsely representing that the loan proceeds would fund specific mortgages, or refinance specific mortgages, for Vanguard clients. Instead, Bohm and his co-conspirators diverted the funds to pay personal expenses and compensation, and to pay off loans they had previously obtained through false loan applications. Bohm is the third defendant to be sentenced 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’ imprisonment and restitution in the amount of $3,488,615.42 following his conviction on conspiracy to commit wire and bank fraud charges. On February 26, 2019, Vanguard Chief Operating Officer Matthew T. Voss was sentenced to 24 months’ imprisonment and $3,488,615.42 restitution following his conviction on conspiracy to commit wire and bank fraud charges.
The government’s case is being prosecuted by Assistant United States Attorney Whitman G.S. Knapp, with assistance from Special Agent Martin Sullivan of the Office’s Business and Securities Fraud Section. Assistant United States Attorney Madeline O’Connor of the Office’s Asset Recovery Section is handling forfeiture matters.