Fraud Friday – Another Former banc-serv Employee Sentenced for Fraud?!

April 29, 2022

Delaney Sexton
Contributing Editor

Fraud Friday – Another Former banc-serv Employee Sentenced for Fraud?!

Michael Slater, the Founder and President of Vital Financial Services, was sentenced to 14 months in prison earlier this month in the Valley Bank fraud case, but prosecutors argued for a sentence of almost 5 years. Since Slater has been involved in SBA lending for over 20 years, the prosecutors said that “the true extent of the damage he has done to the program will likely never be known”.

Before he founded Vital Financial Services in 2009, Michael was a Senior Finance Consultant at banc-serv during the time of the banc-serv fraud scheme. “Slater was employed by banc-serv and was involved in originating SBA loans during the time period charged in the Indiana indictment,” prosecutors told the judge during the Valley Bank case.

Slater is being referred to as the “mastermind and originator” of the scheme because his expertise allowed the fraud to be executed. Starting in 2011, Slater would explain to the former Valley Bank CEO and President, Larry Henson, the ways that disqualifiers for SBA loan guarantees could be concealed. He also helped Henson and other Valley Bank employees package loans with false statements about eligibility and disbursement of loan proceeds.

The co-conspirators applied for over $14 million in loans and obtained the guarantees for more than $9 million. As a result, the SBA lost more than $4.5 million.

In addition to the 14-month sentence, Michael received a three-year term of supervised release and must pay over $4.5 million in restitution. There was not a fine imposed in his sentence. Last month, Larry Henson was sentenced to nine months and $4.5 million in restitution, and Susan McLaughlin, former Vice President of Valley Bank, was sentenced to time served on a felony conviction and a $500 fine earlier this month. Andrew Erpelding, also a former Valley Bank Vice President, is scheduled to be sentenced on May 17.

Iowa Capital Dispatch Article

Read our previous reporting:
Fraud Friday – Four Executives Plead Guilty to $4.5 Million SBA Fraud – December 3, 2021
Fraud Friday – Former President and CEO of Iowa Bank Sentenced to 9 Months and $4.5 in Restitution for Loan Guaranty Fraud – March 11, 2022