Bank Employee Pleads Guilty To Defrauding Her Employer Of Nearly $1.7 Million

NEWARK, N.J. – FOR IMMEDIATE RELEASE  Monday, June 28, 2021

Department of Justice U.S. Attorney’s Office District of New Jersey

New York Man Sentenced to One Year in Prison for Role in Defrauding Banks in $9 Million Shotgun Loan Scheme
NEWARK, N.J. – A Freeport, New York, man was sentenced today to 12 months and one day in prison for participating in a conspiracy to carry out a $9 million scheme to use bogus information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a scheme known as “shotgunning,” Acting U.S. Attorney Rachael A. Honig announced.

Yorce Yotagri, 54, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an indictment charging him with one count of conspiracy to commit bank fraud. Judge Vazquez imposed the sentence today in Newark federal court.

According to documents filed in the case and statements made in court:

Yotagri was a business partner of Jorge Flores of Oakdale, New York, and Jose Piedrahita of Freeport, two conspirators also charged in the indictment. From 2010 through February 2018, Yotagri, Flores, Piedrahita, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOC) from banks on residential properties in New Jersey and New York.

In August 2016, Yotagri lived at a property in Freeport. A quitclaim deed was prepared that facilitated the transfer of ownership of the property to Yotagri and Piedrahita even though Piedrahita did not own the property.

In September 2016, with the Freeport property now in the names of Yotagri and Piedrahita, the conspirators applied for a $290,000 HELOC from a victim bank in Yotagri’s and Piedrahita’s names using the property as collateral. Piedrahita’s contact information appeared on the HELOC application on the Freeport property, which also contained inflated income and assets for Piedrahita. On Dec. 2, 2016, based on the false representations contained in the application, the victim bank issued a HELOC to Piedrahita for $290,000. Piedrahita then disbursed the $290,000 to himself, Yotagri, and Flores. The HELOC funds were never repaid.

In January 2017, Flores called another victim bank and applied for a second HELOC in Piedrahita’s name for $250,000 – again using the Freeport property as collateral. This time Flores’ email address and phone number appeared on the HELOC application on the Freeport property. To demonstrate to the second victim bank that the property was unencumbered by any senior mortgages, Flores and Piedrahita sent several fraudulent documents to the victim bank to conceal the existence of or amounts owed on senior mortgages. The false documents the defendants submitted included a series of false payoff letters and fake checks from other banks, all submitted to deceive the victim bank into believing that the remaining value of the senior mortgages on the Freeport property was far less than what was actually owed.

On March 22, 2017, the second victim bank issued a HELOC to Piedrahita for $250,000.  Piedrahita then disbursed nearly the entirety of the HELOC funds to himself and Yotagri. The funds obtained by Piedrahita and Yotagri from the HELOC were not repaid and were overdrawn, causing losses to the second victim bank totaling approximately $290,000.

At the time the applications for the two HELOCS were made, there was not sufficient equity in the Freeport property to support the $540,000 in HELOC applications made by Flores, Piedrahita, and Yotagri.

The overall scheme, which included HELOC loans for approximately 17 different properties, resulted in over $9 million in losses to the victim banks.

In addition to the prison term, Judge Vazquez sentenced Yotagri to three years of supervised release and ordered him to pay restitution of $580,048.

Acting U.S. Attorney Honig credited special agents of the Federal Housing Finance Agency – Office of Inspector General (FHFA-OIG), Northeast Region, under the direction of Special Agent in Charge Robert W. Manchak; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA-OIG.

The charges and allegations against Yotagri’s co-defendants contained in the indictment are merely accusations, and they are presumed innocent unless and until proven guilty.
Topic(s): 
Financial Fraud
Component(s): 
USAO - New Jersey
Press Release Number: 
21-290
Updated June 28, 2021