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Mug Shot Monday – SBA 504 Loan Perp Pleads Guilty

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March 10, 2014

By Bob Coleman
Editor, Coleman Report

filedFBIFacing 51 counts of bank fraud, Danny Ray Butler of Alabama copped to six counts and entered his guilty plea last week.

In our Dec 23rd Coleman Report I outlined the various sins of today’s perp; faking equity injections, inflating construction costs and check kiting as our used-car dealer wanted to expand into the grocery business with a $5 million project funded by West Alabama Bank and Trust and Alabama Small Business Capital.

From Danny Ray’s plea deal, “Almost immediately after construction was complete, defendant Danny Ray Butler and Fosters Groceries defaulted on the loans by failing to make payment to SBA and West Alabama Bank and Trust as promised. West Alabama Bank and Trust foreclosed on the property and sold it at auction for the approximate amount of West Alabama’s part of the loan. SBA suffered a loss of over $1.7 million.

“From March 2010, and continuing to October 2012, defendant Danny Ray Butler devised a scheme and artifice to defraud SBA and to obtain money and property belonging to SBA by means of materially false and fraudulent pretenses, representations, and promises.

“On or about June 7, 2010, defendant Danny Ray Butler submitted to SBA a Construction Cost Proposal from Turnipseed Construction, Inc. for the Fosters Groceries project well knowing that he had altered the Construction Cost Proposal by increasing the total project cost stated in the Proposal from $2,292,000 to $4,234,000.

“On or about October 27, 2011 defendant Danny Ray Butler submitted to SBA, as evidence of his cash injection, a copy of check as if the check had been issued to the payee for work related to the construction of Fosters Groceries and had been processed by the bank well knowing that the check was false, had not been issued to the payee, and had been altered to give the appearance that it had been processed by the bank.”

Sentencing will be in June, but the wording in the agreement promises leniency to Danny Ray for his future testimony.

Seems others will fall soon…….

Check out the plea agreement here.

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