By Matthew Russell Lee, Video, Alamy photos
Federal Court / S Bronx, Oct 22 – 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 conditions agreed to."
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 October 6, 2022, Judge Cronan sentenced Shin to 14 months "in prison for his role in defrauding a Pennsylvania-based bank (the “Bank”) while serving as its CEO. SHIN was convicted after a three-week trial before U.S. District Judge John P. Cronan on all counts, which charged SHIN with taking bribes in connection with the Bank’s issuance of loans that were guaranteed by the United States Small Business Administration Judge Cronan sentenced SHIN to three years of supervised release and ordered SHIN to pay forfeiture in the amount of $5,506,050 and a $600 special assessment fee."
On October 14, the US Attorney's Office wrote to Judge Cronan "to inform the Court that that Government has consulted with Noah Bank; the Bank is no longer seeking restitution in light of its settlement with the defendant."
Just after that, Noah reached an agreement to sell itself to The Bank of Princeton. It is hard to believe that the troubling compliance issues seen in the trial have been resolved. So what will the regulators do, when the issues are put before them? Watch this site.
The trial: 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."
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.
The US is asking for over $5 million in forfeiture. Judge Cronan has asked for briefing: "ORDER as to Edward Shin: Defendant Edward Shin filed a motion for a downward departure, variance, and other relief on September 7, 2022, Dkt. 231, accompanied by a memorandum articulating his position on an appropriate sentence, Dkt. 232. The Government filed its sentencing submission on September 14, 2022. Dkt. 233. It is hereby ORDERED that, by September 26, 2022, the parties shall file supplemental briefing addressing the following issues: First, whether a loan issued to Garden of Eden Enterprises, Inc. should be included in the total loss amount and, if so, whether the entirety of the loan should be considered as a temporary loss, see United States v. Abiodun, 536 F.3d 162, 168-169 (2d Cir. 2008), or whether any amounts of the loan paid following default should be considered as loss credits pursuant to U.S.S.G. § 2B.1, note 3(E)(ii), or any other provision. Second, whether specific instances of perjury by the Defendant during his trial testimony support an obstruction of justice sentencing enhancement under U.S.S.G. § 3C1.1 and, if so, what those instances are. Third, any previously imposed sentences for comparable conduct that the parties are aware of. And fourth, the Government's response to Defendant's motion for a downward departure. Dkt. 232 at 37-41. (Sentencing set for 10/6/2022 at 09:00 AM in Courtroom 12D, 500 Pearl Street, New York, NY 10007 before Judge John P. Cronan) (Signed by Judge John P. Cronan on 9/19/2022)."
On September 29 in advance of the sentencing Shin's counsel wrote to Judge Cronan seeking permission for two doctors to speak at sentencing: Dr. Jhan Kim of Kim Chirpractic & Rehab Center, and Dr. InHan Lee.
Judge Cronan approved the request: "ENDORSEMENT...The proposed individuals may speak at the October 6, 2022 sentencing. The Clerk of Court is respectfully directed to close the motion pending at Docket Number 239 (Signed by Judge John P. Cronan on 10/3/22)." 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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