Former Smithtown Mortgage Lender Gets 2 Years In Jail For Fraud

GARDEN CITY, NY — A former executive of a Garden City mortgage lender was sentenced Tuesday to two years in jail and to pay millions in restitution for scheme to divert millions in fraudulently obtained loans.

Edward Bohm, 44, of Smithtown, pleaded guilty in February 2019 to conspiring to commit wire and bank fraud. He is the former president of sales and part-owner of Vanguard Funding, LLC, a Garden City-based mortgage lender. In addition to his prison sentence, he will have to pay nearly $3.5 million in restitution and $1,500,000 in criminal forfeiture.

“With today’s sentence, Edward Bohm has been deservedly punished for his role in a fraudulent scheme that deceived banks that trusted and relied upon him as a business partner. Bohm diverted the loan proceeds to, among other things, pay tens of thousands of dollars in monthly personal credit card expenses and finance the luxury house in which he lived,” said United States Attorney Breon Peace. “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 district.”

According to Peace, between August 2015 and March 2017, Bohm and his co-conspirators at Vanguard got more than $8.9 million in short-term loans by lying and saying the loan proceeds would fund specific mortgages, or refinance specific mortgages, for Vanguard clients.

Instead, Bohm and others used the money to pay personal expenses and compensation, and to pay off other loans they had previously gotten through false applications.

Bohm is the third person to be sentenced in the scheme. Vanguard Senior Vice President and CFO Edward Sypher, Jr. was sentenced to 18 months in prison on Feb. 6. Vanguard COO Matthew Voss was sentenced to 24 months in prison on Feb. 26. Both were also ordered to pay nearly $3.5 million in restitution.

“Edward Bohm and his associates at Vanguard Funding defrauded the financial institutions that provide critical residential mortgage funding, helping themselves to the short-term loans they falsely claimed were on behalf of consumers,” said state Department of Financial Services Superintendent Adrienne Harris. “As New York's financial services regulator, I am proud of DFS’s mortgage banking examiners and criminal investigators who assisted in the investigation that brought Bohm to justice, and who will continue to root out fraud on behalf of all New Yorkers."