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Mortgage Broker Sentenced for Tax Fraud, Paying Kickbacks in Real Estate Transactions

SACRAMENTO — U.S. Attorney Benjamin B. Wagner announced today that U.S. District Judge William B. Shubb sentenced William T. Bridge, 43, of Cambria, Calif., to 21 months in prison, to be followed by one year of supervised release, $1,057,700.90 in restitution to the Internal Revenue Service (IRS), and a $60,000 fine for multiple counts of filing false tax returns and paying kickbacks in connection with real estate loan transactions. Bridge pleaded guilty on June 16, 2008.

This case is the product of a joint investigation by the FBI and the IRS - Criminal Investigation.

According to Assistant U.S. Attorney Laurel Loomis Rimon, who prosecuted the case, Bridge admitted that on his 2003 - 2006 federal tax returns, he willfully failed to report more than $3.8 million he had earned as a licensed real estate mortgage broker doing business as The Loan Center in San Francisco. In completing his tax returns, Bridge reported only the compensation he earned as part of the “yield-spread premium” that was reported by the lending institutions themselves to the IRS, and did not report his full commission, which involved substantially more money.

During the same time, Bridge was paying thousands of dollars in kickbacks to John Ngo, an employee of Long Beach Mortgage (formerly a subsidiary of Washington Mutual Bank) to process what he knew were fraudulent loans application packages to be secured by residential properties located in the Sacramento and Stockton areas. Ngo pleaded guilty on Dec. 17, 2007 to perjury, admitting that he had falsely denied to the Grand Jury that he had received these kickbacks. He is scheduled for sentencing on Aug. 9, 2010.

Paul Bridge, William’s brother, was also a loan broker at The Loan Center and was charged with paying kickbacks. He pleaded guilty on June 16, 2008 and is scheduled for sentencing on Aug. 26, 2010.

Trial is scheduled to begin on June 15, 2010 in the case against Joel Blanford, a former account executive at Long Beach Mortgage, who is charged in this investigation with mail fraud in connection with the submission of fraudulent loan applications.

U.S. Attorney Wagner stated, “The U.S. Attorney’s Office continues its pledge to work with our law enforcement partners to investigate and prosecute the industry insiders who manipulate the mortgage loan process for their own financial gain.”

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