Two Loan Brokers Plead Guilty to Bank Fraud Scheme
For Immediate Release
U.S. Attorney's Office, District of Massachusetts
Defendants charged borrowers fees for fraudulent loan applications they submitted using fabricated information
BOSTON – Two operators of a loan brokerage businesses pleaded guilty yesterday today in federal court in Boston to conspiring to defraud a Massachusetts-based bank and the U.S. Small Business Administration (SBA).
Ted Capodilupo, 57, of South Easton, and Joseph Masci, 71, of Boston, pleaded guilty to one count each of conspiracy to commit bank fraud. U.S. Senior District Court Judge Mark L. Wolf scheduled sentencing for Sept. 8, 2023. The defendants were charged in January 2022 along with co-conspirator Brian Ferris, a loan officer at a Massachusetts-based bank.
Between 2015 and 2018, Capodilupo, Masci and Ferris agreed to defraud the bank and the SBA by submitting fraudulent loan applications to the bank, which administered the SBA’s small business express loan program, to secure bank loans guaranteed by the SBA. Specifically, Capodilupo and Masci submitted dozens of fraudulent loan applications to the bank on behalf of borrowers who were ineligible for traditional business loans. These loan applications misrepresented, among other things, the identity of the real loan recipients and the businesses for which the loans were sought.
Capodilupo and Masci also fabricated federal tax forms submitted in support of the fraudulent loan applications, falsified applicant signatures and falsely indicated that no broker had assisted in preparing or referring the loan applications. Capodilupo and Masci charged borrowers fees for obtaining these fraudulent loans. Ferris, who worked as a loan officer at the bank, caused the bank to issue loans for which Capodilupo and Masci submitted applications and received a kickback from Capodilupo and Masci of approximately $500 per loan. The scheme generated approximately $270,000 in fees for Capodilupo and Masci. Many of the loans that the bank issued as a result of the fraudulent applications ultimately defaulted, resulting in substantial losses to the bank.
On April 21, 2023, Ferris pleaded guilty to one count of conspiracy to commit bank fraud. He is scheduled to be sentenced on Aug. 3, 2023.
The charge of conspiracy to commit bank fraud provides for a sentence of up to 30 years in prison; five years of supervised release; a fine of up to $1 million or twice the gross gain or loss, whichever is greater; restitution; and forfeiture. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
Acting United States Attorney Joshua S. Levy; Patricia Tarasca, Special Agent in Charge of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), New York Region; Christopher DiMenna, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Brian Tucker, Special Agent-in-Charge, Eastern Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection; and Amaleka McCall-Brathwaite, Special Agent in Charge of SBA OIG’s Eastern Region, made the announcement. Assistant U.S. Attorney David M. Holcomb of Levy’s Securities, Financial & Cyber Fraud Unit is prosecuting the case.
Updated June 16, 2023