This is an official press release from the U.S. Department of Justice (USAO - New York, Eastern), published as received.

Today, in federal court in Brooklyn, Seung Y. Lee, also known as “Kevin Lee,” was sentenced by United States District Judge Hector Gonzalez to 33 months’ imprisonment following his previous guilty plea to one count of conspiring to commit wire fraud and bank fraud.  Over the course of seven years, Lee, through his business, Pinnacle Capital (Pinnacle), submitted or caused the submission of hundreds of fraudulent home equity line of credit (HELOC) applications to financial institutions on behalf of loan applicants in exchange for fees.  In addition to the term of imprisonment, Lee was also ordered to forfeit $841,549.50 to the government.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York and James C. Barnacle, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence. 

“The defendant engaged in a scheme to deceive financial institutions into extending home equity lines of credit to his clients under false pretenses, exposing lenders to millions of dollars in potential losses,” stated United States Attorney Nocella.  “Today’s sentence demonstrates that those who exploit the banking system through fraud for financial gain will be go to prison for their crimes.” 

As set forth in public filings and at court proceedings, Lee controlled Pinnacle, a corporate entity located in Fort Lee, New Jersey.  Lee and Pinnacle, directly and indirectly through co-conspirators, offered assistance to homeowners who sought to obtain HELOC loans. 

A HELOC allows a homeowner to borrow money using the available equity in their home to secure the extension of credit, but financial institutions require that the borrower have sufficient income to repay the HELOC.  If a HELOC borrower has insufficient income to keep up with the HELOC loan payments, the homeowner could lose their home.  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.  From approximately January 2015 through March 2022, Pinnacle employees, under the direct supervision of Lee, submitted to numerous banks in the Eastern District of New York and elsewhere HELOC loan applications that contained false and fraudulent income and employment information, including tax returns, Forms W2 and pay stubs.  The applications submitted by Pinnacle fraudulent represented that the applicants had sufficient income to repay the HELOC loans.  Hundreds of these fraudulent HELOC loan applications were approved, exposing the financial institutions to a risk of loss in excess of $80 million.  For each relevant fraudulent loan, Pinnacle typically charged and earned 1% of the approved HELOC amount, earning approximately $841,549.540 in total.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States  Attorney Shannon C. Jones is in charge of the prosecution with assistance from Paralegal Specialist Melina Piatti-Chayan.  Assistant United States Attorney Tanisha Payne of the Office’s Asset Recovery Section is handling forfeiture matters. 

The Defendant:

SEUNG Y. LEE (also known as “Kevin Lee”)
Age: 55
Fort Lee, NJ

E.D.N.Y. Docket No. 25-CR-21 (HG)