A Los Angeles man who conned a series of churches into participating in a $4.2 million mortgage fraud scheme was sentenced this week to a year in federal prison and five years of probation.
Chester Peggese—who earlier pleaded guilty to bank fraud and tax evasion charges—was ordered to pay restitution of $4.2 million to Broadway Federal Bank and $38,609 to the Internal Revenue Service, according to the IRS.
Peggese, 59, 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, according to his plea agreement.
Between 2007 and 2009, Peggese met with church representatives and obtained financial information required as part of loan applications.
Unidentified co-schemers altered the financial information provided to make it appear as if the churches were more financially sound than they were, according to the IRS.
Based upon the false statements about the financial status of the churches, Broadway Federal issued mortgages to the churches and Peggese received payment out of escrow on the loans, kicking back a portion to ex-bank employee Paul Ryan, according to court documents.
Ryan, 48, also of Los Angeles, pleaded guilty to one count of receiving bribes and rewards as a bank employee, and faces sentencing May 9.
Broadway Federal Bank traces its origin to Broadway Federal Savings and Loan Association, which was founded in 1946 by civil rights leader Dr. H. Claude Hudson, architect Paul Williams, and real estate broker H.A. Howard.
