AG James and NYS Police Superintendent Bruen Announce Prison Sentence in Million-Dollar Fraud Scheme
NEW YORK – New York Attorney General Letitia James and New York State Police Superintendent Kevin P. Bruen today announced the sentencing of Shawn M. VanVeghten (39, of Saratoga Springs) for defrauding homebuyers, business owners, a financial lender, and the beneficiary of a special needs trust out of more than $1 million to finance his own personal and business expenses. VanVeghten’s multi-year scheme — that took place between 2016 and 2020 — left many homebuyers across upstate New York without the ability to get into their homes when promised, if at all. Today, before the Honorable James A. Murphy, III in Saratoga County Court, VanVeghten was sentenced on his convictions for Money Laundering in the Second Degree (a class C felony) and Scheme to Defraud in the First Degree (a class E felony) to 2 1/3 to 7 years in state prison.
“New Yorkers spend their lives saving for their dream home, so those who steal only to leave our state’s residents struggling to keep a roof over their heads will see the full force of our office come down on them,” said Attorney General James. “Shawn VanVeghten defrauded more than $1 million from New Yorkers just to finance his own expenses. Now Mr. VanVeghten will spend the next several years with a jail cell as the only roof over his head. New Yorkers can trust that I will protect their homes and their wallets from criminals seeking to take advantage of them. I thank the New York State Police for its partnership in finally putting away this repeat offender.”
“I commend our members and the New York Attorney General’s Office for holding Shawn VanVeghten accountable for his crimes,” said Superintendent Bruen. “He promised to build dream homes for his victims, but instead he took more than a million dollars of their hard-earned money and used it for his own benefit. We will simply not tolerate this type of reprehensible behavior.”
Today’s sentencing followed a conviction made possible by a joint investigation between the Office of the Attorney General (OAG) and the New York State Police’s (NYSP) Financial Crimes Unit, with assistance from the Saratoga County Sheriff’s Department and both the Saratoga County and Warren County District Attorneys’ Offices. The joint investigation revealed that VanVeghten engaged in a money laundering scheme aimed at promoting his businesses at the expense of homebuyers, business owners, a financial lender, and the beneficiary of a special needs trust.
According to the OAG’s felony complaint, VanVeghten laundered over $1 million through two construction companies he owned or operated — VanVeghten Construction, LLC and Union Modular Homes, LLC — both based in Wilton, New York.
VanVeghten was arraigned in Wilton Town Court in September 2020 on a series of felony and misdemeanor complaints before the Honorable Matthew Coseo. Subsequently, on December 8, 2020, VanVeghten was arraigned on the charges of Money Laundering and Scheme to Defraud, also before the Honorable Coseo in Wilton Town Court.
As part of his guilty plea in December of 2020, VanVeghten admitted that, from at least July 2016 to May 2020, he engaged in a scheme to defraud homebuyers and others and laundered monies embezzled from these victims. During this time period, VanVeghten received monies from homebuyers that were intended to build their dream homes, as well as from a lender in connection with other property development projects.
However, instead of using these funds for designated projects, VanVeghten diverted the monies for personal use, as well as to pay off business expenses. VanVeghten also engaged subcontractors and suppliers for labor and materials for various construction projects, while failing to pay them.
Additionally, over a three-year period, VanVeghten misappropriated almost $200,000 from a special needs trust established for the benefit of a disabled family member. VanVeghten used these stolen monies to replenish more than $1 million in funds that he had previously misappropriated from homebuyers in order to satisfy his outstanding business debts, to repay loans, and to pay his own personal expenses. In total, VanVeghten diverted over $400,000 for his own personal use, including to purchase and renovate an investment property in Schenectady County, pay for office space in the Town of Wilton, pay down his personal mortgage, and cover various other personal expenses, including dining, entertainment, and clothing.
In one instance, a homebuyer paid over $500,000 for the construction of a modular home in the Town of Adirondack, New York. Following numerous delays, in late 2018, the manufacturer finally delivered the components to the homebuyer’s property and found there was not even a sufficient foundation upon which to build. As a result, the homebuyer had to hire a subsequent contractor and still has yet to have his home built. In reality, this homebuyer’s funds were misappropriated by VanVeghten to further other projects where funds had been previously stolen. An NYSP audit of VanVeghten’s bank accounts revealed that he conducted hundreds of similar transactions on a near-continuous basis, utilizing new funds received from homebuyers, a lender, and the special needs trust in a Ponzi-like scheme to replace previously embezzled funds. As a result, homebuyers were unable to get into their homes when promised, if ever at all. Some of those victims appeared and described the extent of their financial distress to the court at sentencing.
VanVeghten was today sentenced to 2 1/3 to 7 years in prison and also signed judgments in favor of his victims totaling $1 million, including $100,000 in up-front restitution.
The OAG recommends practicing the following tips to protect against becoming a victim of a home improvement scam:
Shop around: Get at least three estimates from reputable contractors that include specific information about the materials and services to be provided for the job.
Get it in writing: Insist on a written contract that includes the price and description of the work needed.
Don't pay unreasonable advance sums: Negotiate a payment schedule tied to the completion of specific stages of the job. Never pay the full price up front.
Get references: Check with the Better Business Bureau, banks, suppliers, and neighbors. Always contact references. Residents of New York City, or Westchester, Nassau, or Suffolk counties can check their local consumer affairs office.
Know your rights: Consumers have three days to cancel after signing a contract for home improvements. All cancellations must be made in writing.
Any New York resident who believes they have been scammed as part of a home improvement contract should submit a complaint to the OAG immediately with as many details as possible.
The OAG wishes to thank the Financial Crimes Unit of the NYSP for their invaluable assistance and audit work throughout this case, as well as their help in the investigation. The OAG also wishes to thank the Warren and Saratoga County District Attorneys’ Offices and the Saratoga County Sheriff’s Department for their help in this investigation.
This case is being prosecuted as part of Attorney General James’ Combatting Upstate Financial Frauds and Schemes (CUFFS) Initiative, led by Director Philip V. Apruzzese, an Assistant Attorney General in the Criminal Enforcement and Financial Crimes Bureau. The CUFFS Initiative was implemented by Attorney General James in an effort to assist local law enforcement and district attorneys in the investigation and prosecution of complex financial crimes and money laundering cases.
Assistant Attorneys General Apruzzese and John R. Healy prosecuted the case, with the assistance of Legal Support Analyst Jamirah Williams-Johnson, under the supervision of Supervising Analyst Paul Strocko and Deputy Supervising Analyst Jayleen Garcia. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph D’Arrigo.
The OAG investigation was conducted by Senior Detective Samuel Scotellaro, III, under the supervision of Executive Officer Mario Rivera and Commanding Officer Antoine Karam of the Major Investigations Unit. The Investigations Bureau is led by Chief Oliver Pu-Folkes and Deputy Chief John Reidy. Both the Criminal Enforcement and Financial Crimes Bureau and the Investigations Bureau are part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General José Maldonado.
Homeowner complaints were received by the OAG’s Consumer Frauds and Protection Bureau, under the supervision of Bureau Chief Jane M. Azia and Deputy Bureau Chief Laura J. Levine. The Consumer Frauds and Protection Bureau is a part of the Division for Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo.
Both the Division for Criminal Justice and the Division for Economic Justice are overseen by First Deputy Attorney General Jennifer Levy.