The chief executive of a Pennsylvania bank faces charges of allegedly taking bribes in connection with his bank’s issuance of federally guaranteed small business loans; the arrest followed an investigation conducted by the federal insurer of bank deposits and other agencies.
According to Geoffrey S. Berman, U.S. Attorney for the Southern District of New York, Edward Shin, 56, of Ambler, Pa. (also known as Eungsoo Shin), was arrested recently for taking bribes in issuing loans guaranteed by the U.S. Small Business Administration (SBA), which participated in the investigation along with the Federal Deposit Insurance Corp. (FDIC), the office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the FBI.
Shin, the U.S. Attorney said, was arrested following a criminal complaint charging him with allegedly taking bribes during the period of 2009-12 by siphoning off a portion of commissions on SBA-guaranteed loans and causing the bank to issue loans to companies in which the bank executive had a secret interest. The bank was not named in the U.S. Attorney’s release about the arrest; the complaint against Shin was dated May 22.
According to the allegations in the complaint, when the bank issued a business loan involving a certain broker, Shin is alleged to have secretly arranged to receive a portion of the broker’s fee. On other occasions, the U.S. Attorney claimed, when the bank issued a business loan that did not involve the use of an actual broker, Shin allegedly arranged to have the broker inserted unnecessarily into the transaction solely to generate a broker fee that could be shared with Shin. The federal prosecutor further claimed that, in fact, the broker did no actual work to earn a commission on those transactions, but allegedly split the “broker’s fee” with Shin as an illegal kickback.
The bank executive is charged with one count of conspiracy to commit bank bribery, which carries a maximum potential sentence of five years in prison, and one count each of bank bribery, theft of funds by a bank officer, and conspiracy to commit wire fraud, each of which carries a maximum potential sentence of 30 years in prison.