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Fraud Friday — Another Equity Injection SBA 7(a) Biz Aq Fraud

February 1, 2013

In Alabama — A Mobile man today admitted to submitting fraudulent paperwork so that one of his employees could obtain a government-backed loan to buy his Atmore company for more than $1.5 million.

Mark McWilliams, 46, pleaded guilty to conspiracy to commit loan fraud. According to a summary of the offense in his plea agreement, he wanted to sell Poston Buick Enterprises to Jennifer Daw in 2008. Defense lawyer Dennis Knizley said the company sold specialty car parts.

Small Business Loan Source in Houston agreed to lend Daw $1.59 million, with the Small Business Administration guaranteeing 75 percent of that total. But the institution required Daw to make a $260,000 down payment, which she did not have, according to court records.

So Daw and McWilliams conspired to make phony bank statements, checks and certificate of deposit receipts to make it appear as though Daw had received the money as a gift from her grandmother. Investigators discovered that the grandmother’s signature was not on the checks.

Daw pleaded guilty to a criminal offense in July and awaits sentencing.

The business failed shortly after McWilliams sold it, and Daw defaulted on the loan. When bank officials investigated why the loan went sour so quickly, they discovered the illegal arrangement between Daw and McWilliams, according to court documents.

Because the amount of money is so high, McWilliams likely faces prison time under advisory sentencing guidelines

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