By Matthew Russell Lee, Video, Alamy photos
SDNY COURTHOUSE, Sept 14 – Noah Bank's Edward Shin was on arrested for defrauding the U.S. Small Business Administration on May 29, 2019 and would, it was said, be presented later on May 29 before Magistrate Judge James L. Cott in the U.S. District Court for the Southern District of New York.
Inner City Press after reporting the arrest went the SDNY Magistrate's Courtroom 5A and was told Shin would be presented at some undefined later hours. But with the door to 5A locked at 4:30 pm, Inner City Press was told Shin "has not been presented, there are no terms. Tomorrow is more likely." And later, as Inner City Press waited in front of the locked door, staff emerged with a more specific prediction: 2 pm May 30.
In fact it happened slightly before then. Here are the terms of Shin's release: "Surrender travel documents and no new applications; travel restricted to SD/EDNY, DNJ, EDPA. $1 Million bond secured by $25,000 cash and signed by two co-signors (condition to be met within a week)." And, interestingly, "Alcohol testing / treatment." Inner City Press has been contacted by those covering Shin well before this, who said that Shin "threatened to kill a borrower [and] was sued for reneging on a board control deal."
Then on February 12, 2021 leading up to a trial scheduled for August 16, Judge Woods rejected many of Shin's motions in limine - evidence will come in. (One motion was denied as moot, excluding six loans, which was a win for the defense).
Jump cut to April 25, 2022. The case was re-assigned to Judge John P. Cronan, who has set trial for April 26. On the eve of it the US put in SBA documents about loans to produce companies, offering to redact some.
On April 27, there were opening statements. While numerous AUSAs in the gallery but apparently no media other than Inner City Press, Shin's lead counsel Paul Boyton Brickfield showed a half dozen PDF slides, emphasizing that the US's cooperating witness James Kim is a "Crooked Deli Owner." Juror 6 raised his hand to say that his screen was not working. Then the witnesses kicked off.
On April 28, former Noah Bank executive offer Marie Lee was questioned by Shin's lawyer about her Regulation O filing where she said there were no "covert transactions." Now she says there were. So was she lying then, or lying now? She demanded a year's salary as severance, then called it a consulting agreement for 14 months. The AUSA objected to hearsay. But Shin's text to her may come in if a foundation is laid.
On May 2, she was still on the stand, now trying to explain when a referral fee could or would be paid, and when not. She was show a Form 159 to the SBA that she had signed...
On May 3, the next witness was questioned with Korean interpreter about a broker fee email from James Kim to Ed Shin, $37,500 to SBA Eastern Realty in Koreatown, and Windsor LLC. The proof was accumulating and in the hall by the elevators at day's end, Shin looked worried.
On May 4, Kim was still on the stand, now testifying about an email from Shin about using Wells Fargo and Shinhan Bank for projects "Cafe 45" and 32 Madison with Chin Yi, who Shin described as fishy.
On May 5 Kim was getting cross examined about his visits to casinos in Queens, New York and in Atlantic City. He said, though the Korean interpreted, I am not passionate about winning. Shin's lawyer shot back, So you go to lose? He plays blackjack and roulette. Now it's Shin who's gambling.
On May 9 a witness who worked at stores owned by James Kim described being told by his aunt Sophie Han to put thousand dollar bundles of cash in a separate safe for Kim to pick up. First it was Madison Kim Farms, than 1797 Empire Corporation.
On May 16, Shin's lawyer filed a motion to quash the government's subpoena to Shin for all this tax returns from 2009 through 2014 - and all casino records. The argument is that producing this information would chill Mr. Shin's right to testify on his own behalf.
On May 17, Shin did in fact take the stand. On direct, speaking in Korean, he described growing up in LA and New Jersey, then working for Chase Bank. He put in a bid with others for Royal Asian Bank in 2009, renaming it Noah (because, he said, many of the Korean store owners go to big Christian churches).
On May 18, Shin doggedly through a different interpreter described loans to Aspen Market on Broadway (which Shin said was owned by a "Turkish business" who had a Korean fish salesman as a tenant) and to Li 77 Corp in Hunts Point. The effect on the jury is not yet known.
Judge Cronan told jurors to expect closing arguments in the week beginning May 23.
On May 19 without the jury present the parties argued the jury charge, line by line. The defenses wanted the word "merely" out of page 22; the AUSA argued that the jury does NOT need to be unanimous on which wire, or even which kind of wire, to convict of conspiracy.
On May 23, during cross examination of Shin, the AUSA asked Shin if he had made personal loans to First Avenue Lees, 32 Madison Farm and 1795 Empire. Shin dodged then said, loans to the owners, probably for use in the businesses.
On May 25, the closing arguments. The government hammered away at ways they said Shin put his own investments into businesses he then had Noah lend to, creating a conflict of interest not disclosed to the SBA. As the jury sent a note it had selected its foreperson, Shin's lead lawyer recounted which he thought he had connected with. Not so much.
On May 26, this: "the conviction of EDWARD SHIN, then-CEO of a Pennsylvania-based bank (the “Bank”), for taking bribes in connection with the Bank’s issuance of loans that were guaranteed by the United States Small Business Administration (“SBA”). SHIN was arrested in May of 2019 and charged with taking bribes by siphoning off a portion of commissions on SBA-guaranteed loans and causing the Bank to issue SBA-guaranteed and commercial loans to companies in which SHIN had a secret interest. SHIN, 58, of Ambler, Pennsylvania, was convicted of one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, which carries a maximum potential sentence of 30 years in prison, one count of conspiracy to commit bank bribery, which carries a maximum potential sentence of five years in prison, one count of conspiracy to commit loan fraud, which carries a maximum potential sentence of five years in prison, another count of conspiracy to commit bank fraud, which carries a maximum potential sentence of 30 years in prison, and one count each of bank bribery, and theft of funds by a bank officer, each of which carries a maximum potential sentence of 30 years in prison."
On September 14 the US Attorney's Office in its sentencing submission asked for a below guidelines 84 months (and forfeiture of $5,521,550). Shin, on the other hand, wants 24 months, the first 12 under home confinement. Inner City Press will continue to cover the case(s).
From the first statement: "the United States Attorney for the Southern District of New York, announced today the arrest of EDWARD SHIN, the CEO of a Pennsylvania-based bank (the “Bank”), for taking bribes in connection with the Bank’s issuance of loans that were guaranteed by the United States Small Business Administration (“SBA”). SHIN was arrested pursuant to a criminal complaint charging him with taking bribes by siphoning off a portion of commissions on SBA-guaranteed loans and causing the Bank to issue SBA-guaranteed loans to companies in which SHIN had a secret interest."
The bank is Noah Bank, and Shin has previously tried to sue the media for reporting on his misdeeds. And now?
More: "SHIN secretly solicited and received bribe payments in connection with SBA-guaranteed loans issued by the Bank and caused the Bank to extend SBA-guaranteed loans to companies in which SHIN had secret ownership interests. Specifically, when the Bank issued a business loan involving a certain broker (the “Broker”), SHIN secretly arranged to receive a portion of the Broker’s fee. On other occasions, when the Bank issued a business loan that did not involve the use of an actual broker, SHIN arranged to have the Broker inserted unnecessarily into the transaction solely to generate a broker fee that could be shared with SHIN; in fact, the Broker did no actual work to earn a commission on those transactions, but split the “broker’s fee” with SHIN as an illegal kickback.
SHIN also arranged for the Bank to issue SBA-guaranteed loans to businesses in which he secretly retained an ownership interest, in violation of SBA regulations and procedures. For example, in or about December 2010, the Bank issued an SBA-guaranteed loan for approximately $950,000 to a business in New York, New York. Although documents submitted to the Bank for purposes of securing the loan did not mention SHIN’s ownership interest, the business was secretly operated as a 50-50 partnership between SHIN and the Broker. After the loan was issued in or about October 2014, this loan went into default status, ultimately resulting in a loss to the SBA of approximately $611,491."
The case is US v. Shin, 19-cr-552 (Cronan).
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