An Anaheim Hills man has pleaded guilty in federal court here to charges that he had defrauded banks, thrifts and leasing companies out of more than $800,000 by falsifying loan applications.
Chester DeVito, 48, was convicted of six counts of mail and bank fraud and interstate transportation of money obtained by fraud. He entered the plea Wednesday, the second day of his trial. Several prosecution witnesses had already testified.
Released on a $100,000 bond, DeVito is scheduled to be sentenced March 25. He could receive up to 35 years in jail and be ordered to pay a $1.5-million fine.
Prosecutors said DeVito recruited accomplices then used their names on loan requests for the purchase of office equipment.
DeVito created phony vendor invoices from a nonexistent supplier, Major Equipment Brokers, to convince lenders that the money was already spent, prosecutors said, and the loan applications contained false information, including bogus tax returns.
James A. Twitty, DeVito’s attorney, said his client was just a bit player in the case.
“The government had granted immunity to the people we considered to be the major players,” he said. “The people who got most of the money were all going to come in and say Chet was the one who did it, and there wasn’t much we could do about it.”
Heller Financial, a Chicago leasing company, was the scheme’s largest victim. The firm loaned DeVito and his associates about $283,000 on the understanding that he would use it to buy blood analyzer equipment and computers, prosecutors said.
Another firm, Atlantic Financial Savings Bank in Los Angeles, loaned him $80,000.
“What would be represented to the bank was that the applicant needed to purchase equipment for his business, but in fact all they did was take the money,” Assistant U.S. Atty. Jennifer T. Lum said.
Eight loans were eventually made to DeVito and associates, ranging from about $18,000 to more than $280,000.
Lum said DeVito personally took in about $250,000; she refused to say what he did with it.
Twitty said Devito made about $100,000.
“Do you ever see a story where they don’t make the claim the defendant is the biggest, toughest ever?” Twitty asked. “He was just a little guy who got sucked in with these dudes who have been doing this for years.”
Records in U.S. Bankruptcy Court in Santa Ana indicate that DeVito filed in June for Chapter 7 liquidation, listing $1.7 million in liabilities. No assets were listed.
DeVito and Hugh F. Tekell were indicted in October, 1989. Tekell was charged with helping DeVito in two of the eight transactions. He is a fugitive, Lum said.
DeVito was also indicted on charges that he submitted phony documents to Pacific Inland Bank in Anaheim for a $125,000 loan, and to Security Pacific National Bank for a $125,000 credit line. Lum said those final counts will be dismissed after sentencing.