Printer Friendly


 BOSTON, April 13 /PRNewswire/ -- The former President of U.S. Funding, Inc. of America (U.S. Funding) pled guilty today in U.S. District Court in Boston, to 20 felony charges relating to the operation of U.S. Funding, a now defunct mortgage broker and lender formerly located in Hingham and Weymouth, Mass.
 U.S. Attorney A. John Pappalardo announced that Guy J. Scarpaci, age 40, of Cohasett, Mass., pled guilty to conspiracy, wire, mail and bank fraud and use of interstate facilities in aid of commercial bribery, before Chief U.S. District Court Judge Joseph L. Tauro, who scheduled sentencing for Scarpaci for June 16, 1993. Pursuant to a plea agreement letter filed as part of the change of plea hearing, the Government said that, in its view, Scarpaci will be an offense level 23 under the U.S. Sentencing Guidelines, which has a Guideline Sentencing Range for Scarpaci of 46 to 57 months of incarceration, plus fines, restitution and special assessments.
 The Government indicated at today's hearing that had the case gone to trial, it would have proven that Scarpaci was the founder, President and Chief Executive Officer of U.S. Funding, during the period July, 1985 to December, 1989. During this period, the government represented, it would have proven that U.S. Funding was engaged in a massive fraud involving over $100 million in mortgage loans. Prosecutors indicated that they would have proven that U.S. Funding regularly falsified documents relating to loans, including tax returns, IRS W-2 Forms, pay stubs, appraisals, Verifications of Employment, Verifications of Loans, Certificates of Title, Deeds and other documents. Prosecutors estimated that in 1988 and 1989 over sixty percent of the loans closed at U.S. Funding involved some type of falsification. In December, 1989, when U.S. Funding ceased operations, the United States said there were more that $2.6 million in outstanding debts of U.S. Funding clients which had not been paid off by U.S. Funding pursuant to its agreements with the borrowers.
 Prosecutors said they would have also proven that during the period early 1986 to mid 1989 Scarpaci directed that checks totalling over $265,000 be paid to Edward Lopes, a former loan officer at Chrysler First Financial Services, Inc. (Chrysler), Natick, Mass., and later at Key Financial Services, Inc. (Key), Waltham, Mass., plus an unknown amount of cash and two automobiles. These payments, prosecutors said, were made in connection with the approval of fraudulent loans by Chrysler and Key. Some of these payments were made to a fictitious entity, JSM Associates, and disguised as "commission" payments. In addition, Lopes received two Corvette automobiles during this period.
 Prosecutors said they would have proven that Scarpaci also directed the use of false financial statements relating to U.S. Funding in order to obtain lines of credit at various local financial institutions, including Boston Trade Bank, Boston; Massachusetts Bank and Trust Company, Brockton, Mass.; Shore Bank, Lynn, Mass.; and South Shore Bank, Quincy, Mass. These false financial statements overstated U.S. Funding assets, sales, income and retained earnings and failed to disclose all of its expenses and liabilities. In addition, prosecutors said, they would have proven that during 1989 U.S. Funding engaged in two separate check kites relating to various checking accounts it maintained in area banks.
 Scarpaci is the 11th of 16 defendants charged in the U.S. Funding case to have been convicted. Nine other defendants have pled guilty previously, and one defendant was convicted after trial. The trial of the remaining defendants is scheduled to begin on April 20, 1993 before Chief Judge Tauro.
 The investigation leading to this prosecution was conducted jointly by the Federal Bureau of Investigation (FBI), the Massachusetts State Police, the U.S. Postal Service, and the Office of the Massachusetts State Auditor, A. Joseph DeNucci, and is being jointly prosecuted by the United States Attorney's Office and the Office of Norfolk County District Attorney, William D. Dellahunt. Assistant U.S. Attorney Peter A. Mullin and Norfolk County Assistant District Attorney Dennis C. Mahoney, who has been appointed a Special Assistant U.S. Attorney, are prosecuting the case.
 -0- 4/13/93
 /CONTACT: Press Officer of the U.S. Attorney's Office, 617-223-9445/

CO: ST: Massachusetts IN: SU:

TM -- NE014 -- 5299 04/13/93 14:49 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 13, 1993

Related Articles
Former Officer of National Bank of Greece Pleads Guilty to Federal Embezzlement Charges, United States Attorney Reports
Coach sentenced in student aid scandal.
Fired Ala. Chancellor Johnson pleads guilty to kickback charges.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters