July 29, 2016
By Bob Coleman
Editor, Fraud Friday
Fraud Friday — 3 Years for Missouri Banker in SBA $4.2 Million Loan Fraud
Today’s fraudster signed a version of SBA Form 1920, certifying “the above information is true and correct.” for a 7(a) loan.
But, he knew it wasn’t true and correct.
“This SBA application for business loan contained materially false information: 1) Lindell Vawter was identified as the operator of Vawter, Inc., when, in fact, Vawter had moved to North Carolina to work for Sonic Restaurants in October 2005 and no longer participated in the day-to-day management of the business and 2) Income figures for 2005 stated that gross sales were approximately $628,000, when, in fact, the gross sales reported by Vawter Inc., were approximately $310,000.”
Lying to the government on SBA Form 1920 is the fraud.
Richard DeLong’s plea agreement says, “Between December 15, 2005, and January 25, 2006, the defendant submitted an SBA Form 4 and attachments as part of an SBA application for a business loan to the SBA office in Springfield, Missouri, in connection with Vawter, Inc.’s application for MAB loan ****5160-30 (Vawter 5160-30).
““By November 30, 2006, Vawter 5160-30 was approximately 85-days past due.”
Richard DeLong approved a number of SBA loans that were SBA ineligible by concealing past due loan payments of distressed borrowers; making loans to nominee borrowers; making false entries in bank records; structuring loans so as to avoid the scrutiny of the bank’s board of directors; concealing unbooked letters of credit; funneling SBA guaranteed loan proceeds to themselves and others; misapplying loan proceeds; preparing fraudulent SBA borrower applications; and paying and accepting bribe money to secure loans.
Mid-America Bank charged off $2,939,161. Chubb Insurance paid Mid-America Bank $1,675,000 upon a claim on a policy it maintained.