July 10, 2013
Equity Investor Assumes an SBA Guaranty Means Everything is Legit with the Business Operator
Sadly, not for a 73-years-old investor who lost $400,000.
The can’t miss investment was for a startup powder coating business. That is the process of coating metal with paint in a powder form that is considered more environmental friendly.
The investor said, “I did due diligence on myself, but the bank authorizing this didn’t do due diligence on this guy.”
An U.S. Postal Inspector said, “There was never one job produced out of the business. Both suspects used the money to live off of, to pay personal debt, to pay all of their expenses and within nine months, the money was gone and filed for bankruptcy.”
One perp pled guilty and got two years in a federal work camp.
The local paper wrote, “Conde, who restores vintage cars, claimed to have vehicles and a stockpile of parts valued at $750,000 as collateral for the loan, but federal officials said those amounts were false.
In another instance, the grand jury alleges, Conde and Kemerer made up a document indicating they paid $300,000 to Industrial Finishing Systems for equipment when, in fact, no payment was made.
“Kemerer took an unknown person to a notary to pose as president of Industrial Finishing Systems to verify that Kemerer had made the payment, according to the indictment.
“The two men created false invoices that they submitted to the bank and other bogus documents to purchase forklifts, it said.”