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Ex-Broadway Federal bank employee sentenced to prison

$4.2 million mortgage fraud scheme

City News Service | 10/27/2016, midnight
A Los Angeles man who used his job in a bank to help a co-defendant con churches into participating in ...

A Los Angeles man who used his job in a bank to help a co-defendant con churches into participating in a $4.2 million mortgage fraud scheme was sentenced on Monday to a year and a half in federal prison.

Paul Ryan was also ordered to pay nearly $354,000 in restitution and serve three years of supervised release following his prison term, according to the U.S. Attorney’s Office.

Ryan, 48, pleaded guilty in 2014 to one count of receiving bribes and rewards as an employee of Broadway Federal Bank.

In February, co-defendant Chester Peggese, 59, was sentenced to a year behind bars and five years probation for his part in the scheme.

Peggese, also from Los Angeles, admitted telling local churches that he was a consultant who could assist in obtaining mortgage loans to purchase property or in obtaining loans to refinance existing mortgages from Broadway Federal.

Between 2007 and 2009, Peggese met with church representatives and conspirators altered the financial information provided to make it appear as if the churches were more financially sound than they were.

Based upon the false statements, Broadway Federal issued mortgages and Peggese received payment out of escrow on the loans, kicking back a portion to Ryan, according to court documents.

Peggese was ordered to pay restitution of $4.2 million to Broadway Federal and $38,609 to the Internal Revenue Service, prosecutors said.