Edward Sypher, Jr., 41, Scarsdale, New York, formerly the Chief Financial Officer of Long Island mortgage lender Vanguard Funding, LLC (Vanguard), was sentenced today to 18 months’ imprisonment to be followed by three years’ supervised release for conspiring to commit wire and bank fraud in connection with the diversion of warehouse loans that Vanguard had fraudulently obtained purportedly to fund home mortgages and mortgage refinancing.
Vanguard was a 33-branch, mortgage lending institution licensed in California, Connecticut, Florida, Georgia, Maryland, Massachusetts, North Carolina, New Jersey, New York, Pennsylvania and Washington. Between August 2015 and March 2017, Sypher and his co-conspirators at Vanguard engaged in a multi-million dollar fraud scheme by falsely representing that the loan proceeds would fund specific mortgages, or refinance specific mortgages, for Vanguard clients. Instead, Sypher and his co-conspirators diverted the funds to pay personal expenses and compensation, and to pay off loans they had previously obtained through fraudulent loan applications. http://www.mortgagefraudblog.com/top-executives-plead-guilty-8-9-million-warehouse-loan-fraud/
The amount of restitution will be determined by the Court at a later date. Sypher was also ordered to pay $22,150.45 in forfeiture.
On December 10, 2018, Matthew T. Voss, Vanguard’s former Chief Operating Officer, was sentenced to 24 months’ imprisonment for his role in the scheme.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Maria T. Vullo, Superintendent, New York State Department of Financial Services (DFS), announced the sentence.
“Edward Sypher, Jr., has been punished for deceiving his banking partners in order to divert millions of dollars to his own benefit and that of other Vanguard executives,” stated United States Attorney Donoghue. “This Office, working hand-in-hand with our law enforcement partners, will continue to vigorously investigate and prosecute business executives who choose to commit fraud as a means of getting ahead at the expense of the businesses and residents of our district.”
“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,” stated FBI Assistant-Director-in-Charge Sweeney. “Thanks to the diligent work of the FBI and our partners, Sypher will be held accountable for his crimes.”
“DFS is proud to have worked with the U.S. Attorney’s office and other law enforcement partners to bring this defendant to justice,” said DFS Superintendent Vullo. “We will continue to combat the serious issue of fraud in order to safeguard the industry and protect consumers.”
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Whitman G.S. Knapp and Elizabeth Losey Macchiaverna are in charge of the prosecution.