Executives Sentenced in Multi-Million Dollar Loan Fraud Scheme
BOSTON – Two executives of a purported financing company were sentenced yesterday in U.S. District Court in Boston in connection with a multi-year scheme to defraud loan applicants of millions of dollars.
Damien John Hess, 37, of Laguna Niguel, Calif., was sentenced by U.S. District Chief Judge Patti B. Saris to 51 months in prison, three years of supervised release, and ordered to pay restitution of $2,881,925 and forfeiture. In November 2014, Hess pleaded guilty to one count of conspiracy to commit wire fraud and seven counts of wire fraud.
Lucas Ford, 38, of Post Falls, Idaho, was sentenced by Chief Judge Saris to three years of probation, with 10 months to be served in a halfway house. In June 2014, Ford pleaded guilty to conspiracy to commit wire fraud.
Hess was the chief executive officer and Ford the chief operating officer of Quest Capital Finance, a purported financing company that was, in reality, a front used to steal millions of dollars from prospective borrowers. As part of the scheme, Hess and Ford and others at Quest told applicants that, in order to obtain the promised loans, the applicants first needed to pay several hundred thousand dollars into a third-party escrow account where the money would be held until all contingencies for the loans were resolved. From 2008 through 2011, Hess and Ford used this approach to persuade businesses and individuals to put millions of dollars into escrow as deposits towards future loans. Hess, Ford, and others at Quest promised the borrowers that the deposits would not be moved out of escrow until the loans were funded. Instead, Hess transferred much of the money to Quest or to his own personal accounts while never actually arranging any financing. Quest never refunded the deposits.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement. The case was prosecuted by Assistant U.S. Attorneys Sara Miron Bloom of Ortiz’s Economic Crimes Unit, Patrick Callahan of the Civil Division, and Doreen Rachal of the Asset Forfeiture Unit.