January 31, 2020
By Caity Witucki
Contributing Editor, Fraud Friday
Fraud Friday – Former Chief Lending Office Admits to Making False Statements to the SBA
James Bortolotti, a former chief lending officer at First Choice Bank in New Jersy, has admitted to improperly securing a $3.75 million federal guarantee on a loan by making false statements about the creditworthiness of the borrower.
Between 2007 and 2014, Bortolotti served as chief lending officer at First Choice Bank in Lawrenceville, New Jersey. During that time, Bortolotti became aware of the SBA 7(a) lending program and First Choice hired a consulting firm to help the bank apply for SBA guaranteed loans.
On February 29, 2012, the consulting firm submitted an application on behalf of First Choice Bank for an SBA guaranteed loan of approximately $5 million. The application contained false information related to the creditworthiness of the small business applicant. Bortolotti knew the application contained false information, but reviewed and signed the application on behalf of the bank anyway.
According to Philadephia Business Journal, this is not Bortolotti’s first banking felony. In August 2018 Bortolotti admitted to the FDIC that he provided the bank’s board of directors with inaccurate past due loan reports. The enforcement order from the FDIC removed Bortolotti from his job and prohibited him from ever working at a financial institution. He was also fined $15,000.
First Choice Bank was unable to recover from Bortolotti’s transgressions and ended up being sold in December 2016 to Massachusetts-based Berkshire Hills Bancorp for $150 million. Prior to that, the bank had $1 billion in assets with six branches in Central Jersey and two more in southeastern Pennsylvania.
Bortolotti’s sentencing is scheduled for April 16, 2020. He faces a maximum potential penalty of 30 years in prison and a $1 million fine.