Fraud Friday – SBA Express Loan Scheme Leads to Guilty Pleas from 2 Loan Brokers

June 23, 2023

Delaney Sexton
Contributing Editor

Fraud Friday – SBA Express Loan Scheme Leads to Guilty Pleas from 2 Loan Brokers

Two loan brokers pled guilty to conspiracy to commit bank fraud after defrauding the SBA and a Massachusetts bank. The SBA Express loan scheme they carried out earned the fraudsters $270,000 while the bank took substantial losses for the loans that eventually defaulted.

From 2015 to 2018, Ted Capodilupo and Joseph Masci submitted dozens of fraudulent loan applications to the bank in an attempt to get SBA Express loans for ineligible borrowers. Since these borrowers were unable to get a traditional bank loan, the two brokers concealed the loan recipients’ true identities and the businesses that the loans were for so that the SBA loans would be approved. In the loan applications, they included fabricated federal tax forms with falsified signatures. The loan applications also contained claims that there was no involvement from a broker in the preparation or referral of the applications. Instead, Capidilupo and Masci charged fees of $2,500 and $10,000 which would be taken from the loan proceeds.

A third conspirator, Brian Ferris, was a loan officer at the bank. Knowing of the fraud scheme taking place, he approved the fraudulent SBA Express loan applications. In exchange, Ferris was given $500 for each loan that was issued by the bank earning him about $15,000 for his involvement.

Ted Capodilupo and Joseph Masci are scheduled to be sentenced in September. Brian Ferris who pleaded guilty earlier this year will be sentenced in August.

Source:
U.S. Attorney’s Office Press Release
Charging Document