Braintree man, two others sentenced to prison for SBA loan fraud

BOSTON – A bank loan officer from Braintree and two other men were sentenced to prison for conspiring to defraud a bank and the U.S. Small Business Administration, federal authorities said Friday.

Ted Capodilupo, 58, of Easton; Joseph Masci, 72, of Boston; and Brian Ferris, 45, of Braintree, were each sentenced by U.S. Senior District Court Judge Mark L. Wolf to one year and one day in prison and two years of supervised release.

Capodilupo and Masci were each ordered to pay restitution of $1,424,087 and Ferris was ordered to pay restitution of $1,236,251. The defendants had pleaded guilty to one count each of conspiracy to commit bank fraud.

Between 2015 and 2018, Capodilupo, Masci and Ferris agreed to defraud a bank and the SBA by submitting fraudulent loan applications to the bank, which administered the SBA’s small-business express loan program, to obtain bank loans guaranteed by the SBA, prosecutors said.

Capodilupo and Masci submitted dozens of fraudulent loan applications on behalf of borrowers who were ineligible for traditional business loans, the U.S. Attorney's Office and other federal authorities said in a news release.

The loan applications misrepresented, among other things, the identity of the real loan recipients and the businesses for which the loans were sought.

"Capodilupo and Masci also falsified applicant signatures and falsely indicated that no broker had assisted in preparing or referring the loan applications, when they in fact charged borrowers excessive fees for obtaining these fraudulent loans," prosecutors said.

Ferris, who worked as a loan officer at the bank, processed the fraudulent loan applications and in some cases fabricated federal tax forms in support of the applications, authorities said. Ferris caused the bank to issue loans for which Capodilupo and Masci submitted applications and received a kickback from Capodilupo and Masci of about $500 per loan.

The scheme generated about $270,000 in fees for Capodilupo and Masci. Many of the loans that the bank issued as a result of the fraudulent applications ultimately defaulted, resulting in substantial losses to the bank.

This article originally appeared on The Patriot Ledger: Braintree loan officer sentenced to prison for bank fraud