Judy “Miu Wan” Yeung was convicted of one count of conspiracy to commit wire fraud, eight counts of wire fraud, and three counts of witness tampering by a federal jury, United States Attorney Joseph P. Russoniello announced. The jury, after deliberating for one day, found that Yeung engaged in a mortgage fraud conspiracy between approximately December 2004 and January 2007. Yeung, together with two mortgage brokers, recruited five individuals to submit loan applications in their names in order to obtain loans totaling more than $6.5 million. Evidence at trial established that Yeung had bad credit and could not have obtained these loans in her own name. Yeung engaged in these transactions in order to purchase investment properties in Gilroy, Calif., when real estate prices were still rising. Yeung also fraudulently refinanced her San Francisco residence in Balboa Terrace, in order to obtain cash from mortgage lenders and to pay off existing loans. Testimony at trial established that Yeung obtained more than $624,000 in cash from these fraudulent transactions.
“The conviction of Ms. Yeung should be taken as affirmation that our efforts to uncover and prosecute those engaged in mortgage fraud, at whatever level of their involvement are serious and ongoing,” U.S. Attorney Russoniello said. “Mortgage fraud has weakened our economy nationally and done irreparable damage to households, neighborhoods, and communities throughout this district. Unscrupulous mortgage brokers often encouraged many borrowers who knew or should have known better to exaggerate their qualifications for a loan they couldn’t afford on a home whose value was overstated, often due to the complicity of unprincipled real estate appraisers. With unwarranted confidence that any risk of default could be passed on to unwary investors, many lenders, including some major banks, which had been pressured to relax their lending standards so as to expand the prospect of home ownership to persons otherwise financially unqualified, made loans that will never be repaid.
“To all those homeowners who stay in their homes and struggle each month to meet their contractual obligations, we owe a responsibility to ferret out, wherever possible, the perpetrators and abettors of this massive fraud,” U.S. Attorney Russoniello added. “The Obama Administration through the United States Department of Justice has made the prosecution of mortgage fraud a priority of its white collar crime enforcement program and this office is committed to using its resources to the fullest to meet this mandate. We continue to work with the FBI, other federal investigative agencies and our state and local partners to effectively bring those responsible for misconduct in this district to justice.”
Yeung’s scheme involved the submission of false information and forged documents to mortgage lenders, including Washington Mutual and JP Morgan Chase. For example, the loan applications in each case grossly exaggerated the income, assets, and creditworthiness of the individuals posing as borrowers for Yeung. In addition, evidence at trial established that Yeung induced others to forge letters from Hang Seng Bank that falsely verified assets held by the borrowers. The forged letters were then used in support of the loan applications. Some of the individuals posing as borrowers testified at trial. They stated that Yeung had promised to pay the mortgages obtained in their names and that, in two cases, Yeung promised to pay them a reward of $20,000 to $40,000.
Several of the witnesses stated that Yeung touted herself as the “Honorable Lady of San Francisco,” and she even provided business cards reflecting that title. Some witnesses testified that they believed Yeung when she told them that she could further their careers and, in some cases, would use her political connections in San Francisco to do so.
In addition, the jury found Yeung guilty of three counts of witness tampering. Two of the “straw buyers” whom Yeung had recruited testified at trial that Yeung told them to lie to the FBI agents who were investigating the case.
The guilty verdict followed a three week jury trial before U.S. District Court Judge Susan Illston.
Two mortgage brokers were charged in connection with the case, which was referred to the FBI by the San Francisco District Attorney’s Office. They have pleaded guilty to wire fraud conspiracy charges and are awaiting sentencing.
Yeung of Mountain View, Calif., was indicted by a federal grand jury on April 9, 2009. The grand jury then returned a superseding indictment against her on July 30, 2009.
Yeung is released on a secured bond. The sentencing of Yeung is scheduled for May 14, 2010, before Judge Susan Illston in San Francisco. The maximum statutory penalty for each count in violation of Title 18, United States Code, Section 1349, is 30 years and a fine of $1,000,000, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Susan E. Badger and Jeffrey Rabkin are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Helen Yee and Elizabeth Garcia. The prosecution is the result of a three-year investigation by the Federal Bureau of Investigation.
For more information, visit www.usdoj.gov.