Perpetrators in a mortgage fraud scheme that targeted Black consumers in the Los Angeles area have been sentenced to federal prison and fined. On Oct. 24, United States District Judge S. James Otero sentenced Paul Ryan, a former mortgage loan officer and mortgage broker Chester Peggese for illegal activities that operated from early 2007 until March 2010.
The sentencing concludes a multi-agency investigation that combined efforts and resources from the Federal Bureau of Investigation, Internal Revenue Service’s Criminal Investigation Division, Office of the Special Inspector General for the Troubled Asset Relief Program, and Federal Deposit Insurance Corporation’s Office of Inspector General.
As a result, Peggese was ordered to pay $4.2 million in restitution to Broadway Federal Bank and serve one year and one day in federal prison. Ryan will pay $353,925 in restitution to Broadway Federal Bank and serve 18 months. Two years ago, Ryan pleaded guilty to one count of receiving bribes and rewards as a bank employee.
According to court documents, Peggese acted as a “consultant” who targeted Los Angeles-area churches with promises of new mortgages to purchase property or refinanced mortgages from Broadway Federal Bank. Between 2007 and 2009, Peggese met with representatives of churches and obtained financial information required for the loan applications.