Fraud Friday – CEO of Noah Bank Convicted for Taking Bribes on SBA Guaranteed Loans
June 3, 2022
Delaney Sexton
Contributing Editor
Fraud Friday – CEO of Noah Bank Convicted for Taking Bribes on SBA Guaranteed Loans
Edward Shin’s convictions related to a fraud scheme spanning from 2009 to 2013. Due to Edward, Noah Bank issued loans to small businesses under false and fraudulent pretenses and to businesses that Edward had a financial interest in. In addition, when the bank would disperse loans that did not involve a broker Shin would cause the bank to pay a real estate and loan broker, even when the broker contributed no work so that Edward and the co-conspirator could share the broker fees.
The complaint filed in this case described one situation where the bank disbursed a $5 million SBA-guaranteed loan to a New Jersey small business. The broker received a $37,500 check as commission for the loan when the broker did not do any work to earn a commission. A $25,000 check was then provided to a company belonging to a business associate of the broker and Shin to be used as payment for Shin. This scheme was repeated in a second example involving a $4.35 million loan.
Two other cases with borrowers were listed in the complaint, and the same loan broker and co-conspirator received checks from Noah Bank as referral fees in connection with the SBA guaranteed loans. Similarly, the broker did no work to earn the referral fee on the $1.55 million loan. The broker would share the funds from the referral fee checks with Edward Shin. In the other borrower’s case, the broker prepared a check using the fees from Noah Bank for the $5 million small business loan, and the broker exchanged the check for cash with one of the borrowers previously listed. Edward received a cash kickback in both situations.
Noah Bank issued a $950,000 SBA loan to a New York business that Edward Shin operated as a fifty-fifty partnership between the broker and Shin. This loan defaulted causing about $600,000 in losses to the SBA. In another example, the bank issued a $1 million loan to a borrower that was owned by the broker, Shin’s wife, and a third individual.
Last week, Edward Shin was convicted of one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, one count of conspiracy to commit bank bribery, one count of conspiracy to commit loan fraud, a count of conspiracy to commit bank fraud, one count of bank bribery, and one count of theft of funds by a bank officer.
Read our previous reporting:
Fraud Friday — Noah Bank CEO Arrested for SBA Loan Fraud – May 31, 2019
Fraud Friday– Update on Noah Bank CEO Fraud Scheme – November 8, 2019