Three high-level executives at a mortgage lender based in New York were arrested for embezzlement of nearly $9 million. Edward E. Bohm, Edward J. Sypher Jr. and Matthew T. Boss, all of whom are senior executives at Vanguard Funds, face charges of conspiracy to commit wire and bank fraud.
According to prosecutors, the executives acquired over $8.9 million in warehouse loans for Vanguard to finance mortgages, after which they kept the funds to pay for their personal expenses and remuneration, and to repay prior deceptive loans. New York Department of Financial Services Superintendent Maria T. Vullo said that the defendants deceived the financial institutions that give funding for people to purchase homes, and they must be held responsible. The U.S. Attorneys Office for the Eastern District of New York said that the defendants were engaged in the plot from August 2016 to March 2017. They secured short-term loans for Vanguard by dishonestly stating they would use the funds to finances mortgages for customers of Vanguard. However, upon receipt of the money by Vanguard, the executives retained the funds for their own use.
Furthermore, in 2017, Bohm was recorded in a conversation with a co-conspirator in which he said he thought he would not be held criminally liable because they deceived banks, and not people. However, Bohm may be incorrect because the executives could each spend a maximum of 30 years in jail for bank fraud conspiracy, and 20 years for wire fraud conspiracy.