Fort Lee Loan Broker Gets 33 Months for Hundreds of HELOC Applications Padded With Fake Income

Published Oct. 30, 2026. Case statuses are current as of that date.

A home equity line of credit, or HELOC, lets an owner borrow against the value of their house. Lenders want proof that the borrower earns enough to make the payments, because if the borrower can't pay, the house is the collateral. Federal prosecutors in Brooklyn say a New Jersey loan business spent seven years filling that gap with invented income.

On Oct. 29, 2026, Seung Y. Lee, also known as "Kevin Lee," 55, of Fort Lee, New Jersey, was sentenced by U.S. District Judge Hector Gonzalez to 33 months in prison, the U.S. Attorney's Office for the Eastern District of New York announced. He was also ordered to forfeit $841,549.50 [1].

Status: Lee is convicted. He had pleaded guilty to one count of conspiring to commit wire fraud and bank fraud [1]. The release does not give the date of his plea or name any co-conspirators.

How the scheme worked

According to prosecutors' account of public filings and court proceedings [1]:

1. The business. Lee controlled Pinnacle Capital, a company in Fort Lee, New Jersey. Pinnacle, directly and through co-conspirators, offered to help homeowners get HELOCs.
2. The customers. "Many of the Pinnacle HELOC applicants were members of the Asian-American immigrant community who had had no, low or unverified income but owned homes with some equity value."
3. The fake paperwork. From about January 2015 through March 2022, Pinnacle employees, "under the direct supervision of Lee," submitted HELOC applications to banks that contained "false and fraudulent income and employment information, including tax returns, Forms W2 and pay stubs."
4. The approvals. "Hundreds of these fraudulent HELOC loan applications were approved, exposing the financial institutions to a risk of loss in excess of $80 million."
5. The fee. For each such loan, Pinnacle "typically charged and earned 1% of the approved HELOC amount." Prosecutors put the total at about $841,549.50, the amount Lee was ordered to forfeit.

Why this matters to homeowners, not just banks

The banks are the fraud victims in the criminal case. But the U.S. Attorney's Office also spelled out the risk to borrowers: "If a HELOC borrower has insufficient income to keep up with the HELOC loan payments, the homeowner could lose their home" [1].

U.S. Attorney Joseph Nocella Jr. said Lee "engaged in a scheme to deceive financial institutions into extending home equity lines of credit to his clients under false pretenses" [1].

The release does not say whether any individual applicant knew their paperwork was falsified, and it does not accuse any applicant of wrongdoing. Whatever a borrower knows, a loan approved on invented income can leave them owing payments they cannot afford, secured by their home.

The FBI's New York Field Office investigated the case [1].

Red flags when someone offers to "help" you borrow

These are general warning signs of this kind of scheme; not every one is alleged in this case.

• A broker who says your income doesn't matter, or who offers to "prepare" pay stubs, W-2s or tax returns for you.
• Paperwork you didn't write. If a loan file lists an employer, salary or job title that isn't yours, stop.
• Pressure to sign without reading, or forms in a language you don't fully understand, with no translated copy.
• A fee based on the loan amount for "getting you approved," especially when you know your documented income would not qualify.
• Targeting through community ties. Prosecutors say many Pinnacle applicants came from one immigrant community. Shared language and culture can make trust come too easily.

What to do

1. Read every page of your loan application before it is submitted. Ask the lender, not the broker, for a copy of what was filed in your name.
2. Check that a mortgage loan originator is licensed through the NMLS Consumer Access database at nmlsconsumeraccess.org.
3. Talk to a HUD-approved housing counselor before borrowing against your home. HUD lists free and low-cost counselors at hud.gov.
4. Report suspected loan fraud to your lender, to your state banking regulator, and to the FBI at tips.fbi.gov.

Case status (as of Oct. 30, 2026)

Defendant	Court	Status as of Oct. 30, 2026	Source
Seung Y. Lee (aka "Kevin Lee"), 55, Fort Lee, N.J. (Pinnacle Capital)	Federal, E.D.N.Y., No. 25-CR-21 (HG)	Pleaded guilty to conspiracy to commit wire fraud and bank fraud; sentenced Oct. 29, 2026, to 33 months in prison; ordered to forfeit $841,549.50	[1]

Statuses can change.

Sources

1. U.S. Attorney's Office, Eastern District of New York, "New Jersey Businessman Sentenced to 33 Months in Prison for Bank Fraud Scheme," Oct. 29, 2026. https://www.justice.gov/usao-edny/pr/new-jersey-businessman-sentenced-33-months-prison-bank-fraud-scheme

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