LOS ANGELES
A man who was a vice president of an Ontario-based wholesale equipment company plead guilty today to federal charges in connection with a bank fraud scheme that resulted in more than $9 million in losses to a California bank, according to officials.Chung Yu Yeung, a.k.a Louis Yeung, 39, pleaded guilty to one count of conspiracy to commit bank fraud and four counts of bank fraud. U.S. District Judge Christina A. Snyder set sentencing for Yeung, of San Dimas, for June 20.
“This defendant went to great lengths to create the illusion of business that defrauded the victim bank out of millions, but law enforcement was able to penetrate the illusion,” said U.S. Attorney Eileen M. Decker. “Crimes like these can threaten the stability of our financial institutions and therefore our national economy.”
The plea agreement indicated that from 2007 to 2012, Yeung was the vice president of Eastern Tools and Equipment Inc., a wholesale equipment company based in Ontario, California, that sold portable generators to retailers across the country.
Yeung admitted that beginning in 2007, he and his co-conspirators defrauded the Pasadena-based East West Bank in connection with a line of credit for Eastern Tools. They did this by making misrepresentations to the bank about Eastern Tools’ finances.
The conspirators created numerous shell corporations to act as suppliers and retailers doing business with Eastern Tools, when, in reality, these shell corporations were entirely under the control of Yeung and existed for the sole purpose of creating the illusion of such business, he admitted.
Yeung admitted that the fictitious companies allowed him and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank.
Yeung and other conspirators then opened and caused to be opened post office boxes, phone accounts and email accounts purportedly associated with the shell retail companies. They provided information about these items to East West Bank auditors to promote the illusion that these shell customers were independent entities, according to Yeung’s plea agreement.
Eastern Tools defaulted on the promissory note after East West Bank discovered the fraud, causing more than $9 million in losses to the bank, according to Yeung’s admissions.