Over $80 Million in Loans Put at Risk: New Jersey Businessman Seung Y. Lee Sentenced to 33 Months for Hundreds of Fraudulent HELOC Applications
The U.S. Attorney's Office for the Eastern District of New York announced on October 30 that Seung Y. Lee, also known as Kevin Lee, 55, of Fort Lee, New Jersey, was sentenced that day in federal court in Brooklyn by U.S. District Judge Hector Gonzalez to 33 months in prison, following his earlier guilty plea to one count of conspiring to commit wire fraud and bank fraud. Lee was also ordered to forfeit $841,549.50 to the government.
United States Attorney Joseph Nocella, Jr. said the defendant had engaged in a scheme to deceive financial institutions into extending home equity lines of credit to his clients under false pretenses, exposing lenders to millions of dollars in potential losses, and that the sentence showed those who exploit the banking system through fraud for financial gain will go to prison for their crimes. Nocella announced the sentence together with James C. Barnacle, Jr., Assistant Director in Charge of the Federal Bureau of Investigation's New York Field Office.
According to public filings and court proceedings, Lee controlled Pinnacle Capital, a company located in Fort Lee, New Jersey, which, directly and through co-conspirators, offered assistance to homeowners seeking home equity line of credit (HELOC) loans. A HELOC allows a homeowner to borrow against the available equity in the home, but lenders require the borrower to have sufficient income to repay; a borrower with insufficient income could lose the home.
The Justice Department said many of Pinnacle's HELOC applicants were members of the Asian-American immigrant community who had no, low or unverified income but owned homes with some equity value. From approximately January 2015 through March 2022, Pinnacle employees, under Lee's direct supervision, submitted HELOC applications to numerous banks in the Eastern District of New York and elsewhere containing false and fraudulent income and employment information, including tax returns, Forms W-2 and pay stubs.
Hundreds of the fraudulent applications were approved, exposing the financial institutions to a risk of loss in excess of $80 million. For each relevant fraudulent loan, Pinnacle typically charged and earned 1 percent of the approved HELOC amount, earning approximately $841,549.50 in total, the amount Lee was ordered to forfeit.
The case is being handled by the Office's Business and Securities Fraud Section. Assistant U.S. Attorney Shannon C. Jones is in charge of the prosecution, and Assistant U.S. Attorney Tanisha Payne of the Asset Recovery Section is handling forfeiture matters. The docket number is 25-CR-21 (HG).
Source: U.S. Attorney's Office for the Eastern District of New York press release
Source: GSM · USA (original Chinese edition)
Photo: 图：位于 Washington 的美国司法部罗伯特·肯尼迪大楼全景（GSM联邦机构固定图库）。照片：APK，CC BY 4.0，经 Wikimedia Commons。 / The Robert F. Kennedy Department of Justice Building in Washington (GSM federal agency photo library). Photo: APK, CC BY 4.0, via Wikimedia Commons.
