LOS ANGELES >> A San Dimas man who served as vice president of an Ontario tool wholesale company on Wednesday admitted to federal charges of defrauding a Pasadena-based bank out of more than $9 million, authorities said.
Chung Yu Yeung, also known as Louis Yeung, 39, served as vice president of Ontario-based Eastern Tools and Equipment Inc., U.S. Department of Justice spokesman Thom Mrozek said in a written statement.
At an appearance Wednesday in federal court in Los Angeles, Yeung admitted to one count of conspiracy to commit bank fraud and four counts of bank fraud, Mrozek said. He was scheduled to return to court June 20 to be sentenced by U.S. District Court Judge Christina A. Snyder.
Between 2007 and 2012, Yeung admitted to setting up a network of shell companies, controlled by himself, to give the false illusion that Easter Tools was conducting far more business than he really was, officials said.
“Yeung admitted that the fictitious companies allowed him and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank,” according to Mrozek.
After using fraudulent documents to boost his business’ line of credit, “Eastern Tools defaulted on the promissory note after East West Bank discovered the fraud, causing more than $9 million in losses to the bank, Mrozek said.
FBI and IRS agents conducted the investigation.
“This defendant went to great lengths to create the illusion of business that defrauded the victim bank out of millions, but law enforcement was able to penetrate the illusion,” U.S. Attorney Eileen M. Decker said. “Crimes like these can threaten the stability of our financial institutions and therefore our national economy.”
Yeung was arrested in connection with the investigation in April of 2015. Alleged co-conspirator and Eastern Tools and former Equipment President Guo Xiang “David” Fan, 53, is also named in the same indictment charging Yeung. He remains at large.