Purchaser and Seller in Loan Fraud Scheme Sentenced to Prison

Allison Tussey —  April 10, 2014 — Leave a comment

Vathany Teng, 43, and Lina Ma, 55, both of Plano, Texas, were sentenced for their roles in a loan fraud scheme they ran from August 2007 to April 2008 that resulted in the total funding of more than $3 million in fraudulent loans.

U.S. District Judge David C. Godbey sentenced Teng to 27 months in federal prison and ordered him to pay $4.2 million in restitution. Ma was sentenced to 18 months in federal prison and ordered to pay $2.1 million in restitution. Both must surrender to the Bureau of Prisons on July 7, 2014.

Both Teng and Ma pleaded guilty to one count of conspiracy to commit bank fraud. The other defendant in the case, Jerry Goh, 51, a lawyer who had offices in the Dallas-Fort Worth Metroplex and who acted as the escrow officer for the Prosper Bank loan, pleaded guilty to one count of misprision of a felony. He was sentenced in February 2014 to serve seven months in federal prison, and he must surrender to the Bureau of Prisons on May 26, 2014, to begin serving that sentence. Judge Godbey also ordered that he serve the first seven months of a one-year term of supervised release on home confinement, and he was ordered to pay more than $2.1 million in restitution.

According to documents filed in Teng and Ma’s case, Teng, Ma, and Goh participated in a scheme to defraud and deceive Prosper Bank, United Central Bank (UCB), and the Small Business Administration (SBA). The conspiracy involved one fraudulent SBA-guaranteed loan from Prosper Bank and two fraudulent loans from UCB.

The scheme involved making false representations and deliberate omissions of material information when fraudulent loan applications were submitted to these banks in connection with the three loans. According to Teng and Ma’s factual resumes, Teng, Ma, and Goh falsely represented to Prosper Bank and UCB and caused the HUD-1 Settlement Statement on all three loans to falsely represent that Ma was the true source of loan down payments.

Goh, acting in his capacity as the escrow officer on the Prosper Bank loan, and thus with control of the loan proceeds, concealed from lender Prosper Bank the fraudulent release of $498,720 of loan proceeds to provide funds for a $431,000 down payment. Goh wired $498,720 of lender Prosper Bank’s funds from an escrow account, knowing that these seller proceeds funds would later be used as the source of borrower Lina Ma’s down payment on her loan from Prosper Bank.

U.S. Attorney Sarah R. Saldaña of the Northern District of Texas announced the sentences.

The case was investigated by the U.S. Small Business Administration-Office of Inspector General and the FBI. Assistant U.S. Attorney David L. Jarvis prosecuted.

Allison Tussey

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