District of Massachusetts | Loan Brokers and Bank Loan Officer Sentenced for Bank Fraud Scheme
BOSTON – Two operators of a loan brokerage business and a loan officer at a Massachusetts-based bank were sentenced today for conspiring to defraud a bank and the U.S. Small Business Administration (SBA).
Ted Capodilupo, 58, of South Easton; Joseph Masci, 72, of Boston; and Brian Ferris, 45, of Braintree, were each sentenced by U.S. Senior District Court Judge Mark L. Wolf to one year and one day in prison and two years of supervised release. Additionally, Capodilupo and Masci were each ordered to pay restitution of $1,424,087 and Ferris was ordered to pay restitution of $1,236,251. The defendants previously pleaded guilty to one count each of conspiracy to commit bank fraud.
Between 2015 and 2018, Capodilupo, Masci and Ferris agreed to defraud a 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 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 falsified applicant signatures and falsely indicated that no broker had assisted in preparing or referring the loan applications, when they in fact charged borrowers excessive fees for obtaining these fraudulent loans. Ferris, who worked as a loan officer at the bank, processed the fraudulent loan applications and in some cases fabricated federal tax forms in support of the applications. Ferris 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.
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; Jodi Cohen, 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 the Securities, Financial & Cyber Fraud Unit prosecuted the case.
