San Francisco Broker Pleads Guilty to Defrauding Lenders

Michael Chou, a San Francisco mortgage broker, pleaded guilty in federal court to wire fraud conspiracy in connection with a scheme to defraud mortgage lenders. According to Joseph P. Russoniello, U.S. attorney for the Northern District of California, Chou admitted that, in a scheme that began in 2003 and continued through April 2009, he defrauded mortgage lenders and financial institutions by providing false information on loan applications. Working out of an office in San Francisco, Chou and his colleagues assisted individuals who wanted to obtain mortgages for residential properties in Northern California and elsewhere. As a part of this scheme, Chou routinely transmitted fraudulent loan applications to mortgage lenders that inflated the borrowers' creditworthiness. In addition, the loan applications were supported by forged documents that purported to verify the borrowers' employment, income and assets. Chou and others used a network of co-conspirators who posed as the borrowers' employers to falsely verify the employment and income information listed on the loan applications. As a result of Chou's participation in this conspiracy he illegally earned $360,800, which he agreed to forfeit. Eleven other individuals have been charged in connection with the case. Chou, who is currently not in custody, is scheduled for sentencing on March 19, 2010.