NYC Bank Funds Over 50 Illegal Chinese Marijuana Grow Houses in Rural Maine
Asian transnational criminal organizations operate more than 270 illegal marijuana cultivation sites in Maine, according to a leaked US Department of Homeland Security memo.
An investigation by the Maine Wire has identified more than 100 of those sites, as previously reported.
Of those properties — almost all purchased within the last three years by single Chinese adults from New York or Massachusetts — 69 of the property transactions involved mortgages originated by Quontic Bank, according to a review of real estate records.
Quontic Bank, based in Astoria, N.Y., describes itself as an “adaptive digital bank.”
It was created after real estate investor Steve Schnall purchased a distressed bank in 2009 and rebranded it two years later as Quontic.
All told, Quontic financed nearly $15 million worth of residential mortgages for homes in rural Maine after 2020, despite having done few mortgages in the state prior to the legalization of recreational cannabis in Maine in 2020.
Quontic is a community development financial institution or CDFI.
The federal government created the CDFI designation in 1994 as part of the Riegle Community Development and Regulatory Improvement Act.
The goal of the program was to encourage banks to offer financial services to underserved communities, including immigrant communities.
There are more than 1,000 CDFIs currently operating in the U.S., and several in Maine.
According to Quontic’s website, they offer specialized financial products that help foreign nationals buy up properties in the U.S.
Some CDFIs receive taxpayer funding through the U.S. Department of Treasury’s Community Development Financial Institutions Fund in order to support their lending.
The Quontic loan officers listed on the majority of the Quontic loans for Maine properties were Steven Ho and Ying-Chan Weng.
Weng is a Chinese national who attended Zhejiang University, according to her company profile.
Reached by phone, Weng expressed shock that the loans she processed were connected to illicit marijuana growing operations in rural Maine.
Weng said the large number of Quontic-financed mortgages in Maine could be because Quontic is the only CDFI that finances real estate in Maine.
“Not that many banks have this type of program in that state, so they know we’re the only one that does this type of loan,” Weng said.
“I have to tell my bank,” said Weng. “We have to stop doing it.”
Weng originated the mortgages for more than two dozen properties on behalf of Chinese buyers from New York and Massachusetts, including a property in Fairfield that is an obvious marijuana growing operation.
Ho, who is no longer with Quontic, is originally from Taiwan, according to his company profile, which is still hosted on Quontic’s website.
Attempts to contact Ho for this story were unsuccessful.
Beginning in Feb. 2021, Ho originated the mortgages for dozens of properties in Maine.
Those properties include a house in Thorndike, which a former Waldo County Sheriff confirmed has been under investigation as a suspected illegal marijuana growing operation.
A resident of Thorndike who visited the property recently also confirmed the strong odor of marijuana emanating from the house.
Ho also originated the loan for a house in Winterport, which later caught fire because the marijuana growing operation that sprang up in the home was using too much electricity.
A property in Rumford that has boarded up windows, smells strongly of marijuana, and is under investigation by the Rumford Police Department was also purchased using a Quontic mortgage processed by Ho.
In 2021, a mortgage industry trade publication featured Ho in an article headlined, “Top Originator: From a novice to a non-QM pro“, that touted his meteoric rise in the mortgage industry.
There is no evidence that Weng, Ho, or anyone at Quontic knew at the time the loans were made that the houses would become illicit cannabis grows.
Nor is there any proof that the individuals named in the mortgage documents participated in illicit marijuana cultivation.
Multiple interview requests placed via email and phone with Quontic were not returned.
Quontic’s website touts the firm’s ability to secure financing for non-citizens who are present in the U.S. but are unable to obtain a Social Security Number (SSN).
“Whether you’re a foreign national interested in purchasing an investment property in the US or you currently live and work in the US but are not eligible to get a social security number, we may have a mortgage option that’s right for you,” the website states.
Quontic received its CDFI status in 2015.
“While most banks prefer to lend to the wealthy, our mission is to lend to low-income people and in low-income communities, so we do whatever we need to do to make sure that at least 60-70% of the loans we make are to these target markets,” then-Quontic CEO Schnall told The Top 100 Magazine.
According to that profile, Quontic has experienced “virtually no losses” on its residential mortgage program.
“Also, as a CDFI, we’re exempt from the regulation that requires us to underwrite income documentation the traditional way, so we can exercise a lot more flexibility when issuing loans. In short, we can adapt to the borrower’s unique circumstances and view their application in totality, rather than just by calculating a debt-to-income ratio from their tax returns,” Schnall said.
Schnall died in August 2022 in a motorcycle accident.
George Lazaridis, interim CEO and longtime president of Quontic’s mortgage division, did not respond to a request for an interview.