The former chief operating officer and chief financial officer of a New York-based mortgage lender will spend between 18 and 24 months in prison after admitting to embezzling more than $8.9 million from warehouse lines of credit that were meant to fund mortgages.
According to the U.S. Attorney’s Office for the Eastern District of New York, Edward Sypher, Jr. and Matthew Voss, who are senior executives at Vanguard Funding, pleaded guilty earlier this year to conspiring to commit wire and bank fraud in connection with the scheme.
Voss, the COO of Vanguard, and Sypher, the company’s CFO, were charged last year for their participation in the fraud. Edward Bohm, who was the president of sales, was also charged for his alleged participation in the scheme.
Vanguard was a 33-branch, mortgage lending operation licensed in California, Connecticut, Florida, Georgia, Maryland, Massachusetts, North Carolina, New Jersey, New York, Pennsylvania, and Washington.
Court documents stated that between August 2015 and March 2017, Voss, Sypher and Bohm engaged in a scheme to obtain warehouse lines of credit from various lenders, including Santander Bank, Bankunited, and Northpointe Bank, which were supposed to be used to fund mortgages for Vanguard’s customers.
But instead of using the money for the company’s customers, Voss, Sypher and Bohm allegedly used the money to pay personal expenses and compensation, and to pay off loans they had previously obtained with fraudulent loan submissions for improper purposes.
According to the criminal complaint, which was unsealed back in August, an agent from the Federal Bureau of Investigation stated that Bohm and Sypher were both recorded discussing their roles in the scheme.
In one recording, Bohm allegedly said that the trio wouldn’t face charges because their scheme’s targets were lenders. “At the end of the day, the s— we did wasn’t to the public,” Bohm allegedly said in the recording.
Sypher was also recorded during a meeting in Vanguard’s offices last year, allegedly claiming that his role in the company meant that he would be not be charged if the scheme became public.
“I’m a W-2 employee. I don’t pull strings in this f—— thing,” Sypher allegedly said.
During that same meeting, Sypher allegedly told a co-conspirator: “You and I never had any communication on any of this s—. Ever. Ever. Okay? Outside of the normal course of business. None. So, we’re not going to f—— jail.”
But, jail is exactly where Sypher and Voss are now headed after pleading guilty for their involvement in the scheme.
Each faced up to 20 years, but their actual sentences are much shorter.
Last week, Sypher was sentenced to 18 months in prison, followed by three years of supervised release. Sypher was also ordered to pay $22,150.45 in forfeiture. Additionally, Sypher was ordered to pay restitution, the amount of which will be determined by a judge at a later date.
“When fraudsters treat investors like their own personal ATMs, using funds invested in good faith to line their own pockets, pay for personal expenses, and repay other fraudulent loans, confidence in the integrity of our financial systems suffers,” said William Sweeney, Jr., assistant director-in-charge of the FBI’s New York field office. “Thanks to the diligent work of the FBI and our partners, Sypher will be held accountable for his crimes.”
And earlier this month, Voss was sentenced to 24 months in prison, followed by three years of supervised release. Voss was also ordered to pay restitution, the amount of which will be determined by a judge at a later date.
“With today’s sentence, Matthew Voss has been held accountable for using his extensive knowledge of the mortgage industry to deceive banks that trusted and relied upon him as a business partner and divert money for his personal use,” United States Attorney Richard Donoghue said. “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 community.”
