Banker pleads guilty in scheme that implicates S.F. Giants owner
Detroit — A banker on Wednesday admitted she participated in a criminal conspiracy involving a loan program that prosecutors say helped an owner of the San Francisco Giants reap a $115 million windfall.
Former Sterling Bank & Trust executive YiHou Han, 38, of San Francisco, pleaded guilty to bank and wire fraud conspiracy in federal court in Detroit. She faces up to 30 years in prison but is cooperating with investigators.
The plea deal gives federal investigators a key insider against others implicated in the alleged conspiracy, including Scott Seligman, 69, who is the founder of Sterling Bank & Trust and a minority owner of the Giants baseball team as well as a wealthy scion of a prominent Metro Detroit family active in the sports, art and philanthropic worlds. Seligman has not been charged with wrongdoing.
The case described by prosecutors includes details about tax cheats, money launderers and bank executives.
The conspiracy involved submitting fraudulent mortgage loans that reaped large commissions for bank executives and boosted bank revenue. Han also helped cover up the conspiracy.
The bank originated at least $5 billion in loans through a residential loan program from 2011-19, according to the government. During that time, Han handled at least 1,288 mortgage loans representing about $683.5 million in credit extended by the bank.
“It was largely, knowingly submitting loan documentation that had false or unfounded information related to borrowers, is that right?” defense lawyer Rees Morgan asked Han.
"Yes, that’s correct,” Han said.
The wrongdoing was rewarding for Han. From 2015-19, Han was paid approximately $3,381,355 in commissions largely generated by fraudulent loans.
"I plead guilty," Han told U.S. District Judge Linda Parker during the virtual hearing.
Han, who is known by the nickname "Fanny," is free on a $1 million unsecured bond — one of the largest amounts ever set by a federal judge in the Eastern District of Michigan. Sentencing is set for Aug. 18, and Han, a naturalized U.S. citizen from China, faces potential immigration problems as a result of the conviction.
She pleaded guilty three weeks after The Detroit News identified Seligman as the unnamed bank executive in Han's criminal case who prosecutors say knew about and encouraged the conspiracy.
The criminal filing also identifies several potential targets of the investigation, including three other unidentified bank executives, and indicates federal agents are focused on lending practices involving the bank's residential Advantage Loan Program. The program catered to Asian borrowers in San Francisco, Los Angeles, New York and Seattle, prosecutors said.
The alleged conspiracy follows months of questions raised in a separate civil lawsuit about money generated by an initial public offering.
The criminal case and a related securities class-action lawsuit allege executives at the bank used a residential loan program to boost revenue of its parent company, Southfield-based Sterling Bancorp. Inc., and position the company to go public in 2017.
During an initial public offering, Seligman and family sold $114.7 million in shares, a Wall Street success story that soured months later amid federal investigations, grand jury subpoenas, upheaval within the bank's executive ranks and now these criminal charges in an ongoing investigation.
Seligman founded the bank in 1984 and its headquarters remain in Southfield. He also is part of an ownership group that bought the San Francisco Giants baseball team in 1992.