More details emerged this week about a huge nationwide fraud ring that hit more than 21 financial institutions, mainly credit unions, including a Pennsylvania cooperative that helped federal authorities stop the loan scam by reporting suspicious activity.
Seven people from four states were indicted this week by a Pennsylvania federal grand jury on charges of bank fraud and conspiracy to commit bank and wire fraud, the U.S. Attorney's Office said. The scam included fake car dealerships in California and a network of straw borrowers who falsified bank loan documents and supporting documentation to obtain auto and consumer loans and lines of credit, the court documents said.
The alleged fraud ring netted between $1 million and $2.4 million, prosecutors said.
Straw borrowers allegedly used fake earnings statements, tax returns, employment information and vehicle identification numbers belonging to cars already owned by other consumers or on lots at legitimate auto dealers, the documents said. From 2009 to 2013, a total of 64 phony borrowers applied for at least 150 bogus loans, according to court documents. Prosecutors did not say how many loans were successful.
The alleged scammers hit more than 15 credit unions, including the $396 million Erie Federal Credit Union in Erie, Pa., the $5.7 billion Digital Federal Credit Union in Marlborough, Mass., the $6.8 billion First Tech Federal Credit Union in Mountain View, Calif., the $60 billion Navy Federal Credit Union in Vienna, Va., the $165 million LOC Federal Credit Union in Farmington, Mich., the $18.5 billion Pentagon Federal Credit Union in Alexandria, Va., and the $595 million Smart Financial Credit Union in Houston.
Observant staff at the $103 million Erie Community Credit Union in Erie, Pa., which was defrauded of $59,000, helped federal authorities crack the ring, according to court documents.
Andres Prieto, 32, of Boynton Beach, Fla. was allegedly the ring leader, according to the two-count indictment issued this week.
Money was allegedly funneled through two fake auto dealerships in California, Gold Coast Group Worldwide and AM Auto Groups, but no autos were actually purchased through the scheme, according to court documents.
Alex K. Philip, 30, a San Francisco businessman, pleaded guilty in federal court in October to bank fraud and conspiring to obtain phony loans, according to court documents.
This week's indictment also included Vincent DeLaPena, 63, of Los Angeles,.; Eric Mathew Benavides, 45, of Covina, Calif.; Trieu Phuong Nguyen, 48, of Erie, Pa.; Willie Hugh Joy, 44 of Alpharetta, Ga.; Yenny M. Romero, 32, of Boynton Beach, Fla.; and Bart Derrick Alexander, 47, of Palm Beach Gardens, Fla.
They each face up to 60 years in prison, a fine of $1.25 million or both, according to the indictment.
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