June 2, 2017
Fraud Friday — Hotel Down Payment Cash Injection Fraud Sends One to Jail, One on Probation
By Bob Coleman
Editor, Fraud Friday
In January 2009, Joseph Garrison was recruited as a straw buyer for two Celtic Bank hotel loans in Texas.
He received a $2 million SBA 7(a) loan to purchase a Howard Johnson hotel in Tyler and a $4.7 million USDA B&I loan to purchase a LaQuinta Inn and Suites in Paris.
Yuhanna Sherriff prepared the loan packages, including SBA Form 413. The personal financial statement showed Garrison had personal assets in excess of $2.3 million.
Garrison signed the personal financial statement, showing he had the ability to provide a cash injection of $687,000. He couldn’t.
Five months later, Garrison applied for the B&I loan, again from Celtic Bank.
His personal assets had increased to over $6 million.
Garrison would provide a cash injection of $1.5 million. Again, Garrison signed the personal financial statement. He didn’t have the cash.
The Feds allege a third defendant, Jitendra Rajpal, “caused $1,475,000 to be transferred into an account in Garrison’s business’s name, which Rajpal actually controlled, which fraudulently created the appearance and materially mislead Celtic Bank into believing that Garrison could satisfy the cash injection requirement in order to obtain the loan.”
Last January, Yuhanna Sherriff was sentenced to 78 months in jail after pleading guilty to conspiracy to commit bank fraud. Sherriff was also hit with five years probation and $3.7 million in restitution.
Joseph Garrison’s guilty plea of submitting a fake personal financial statement earned him five years probation and $3.7 million in restitution.
Jitendra Rajpal’s trial is scheduled for July 24th.