Man Guilty of Loan Fraud Gets 6 Years : Sentencing: Chester DeVito of Anaheim Hills stole hundreds of thousands through phony loan applications.

An Anaheim Hills man was sentenced Monday to six years in prison by a federal judge after being convicted of stealing hundreds of thousands of dollars from banks, thrifts and leasing companies through phony loan applications.

Chester DeVito, 48, was also ordered to pay $298,000 in restitution.

“The country can’t have people marauding financial institutions in this manner,” U.S. District Judge David V. Kenyon said before meting out the punishment.

In a plea-bargain in February, DeVito pleaded guilty to six of eight fraud charges against him. Prosecutors said he recruited accomplices whose names he used on loan requests supposedly for money needed for office equipment. DeVito then created phony vendor invoices from a non-existent supplier, Major Equipment Brokers, to convince lenders that the money was indeed needed for office supplies. The loan applications contained false information that included bogus tax returns.

Federal investigators claim the DeVito scheme brought in more than $800,000. DeVito pleaded guilty to charges of fraud in connection with $300,000 in loans. The remaining counts were dismissed in exchange for his guilty plea.

Heller Financial, a Chicago leasing company, was the largest victim of the scheme. Kenyon ordered DeVito to pay back some $243,000 to that company; Atlantic Financial Savings Bank in Los Angeles is due about $54,000.

The counts dismissed in connection with the guilty plea accused him of submitting 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.

DeVito, once a part owner of Cypress Volkswagen, will be eligible for parole in two years. Kenyon advised him that he is to stay out of the equipment-leasing business for seven years unless he receives court approval.

Hugh F. Tekell, who was indicted along with DeVito in connection with the case, remains a fugitive, according to Assistant U.S. Atty. Jeffrey B. Isaacs.