April 21, 2023
Fraud Friday – Former Head of SBA Pleads Guilty to Fraud Charges During His Trial
It was announced that the 21st Administrator of the SBA, Hector Barreto, decided before the fourth day of his trial to plead guilty in exchange for the prosecution agreeing to drop four other charges.
Hector Barreto was the chairman of the Latino Coalition Foundation, and he began the Hispanic Business Roundtable Institute and worked as its president. In addition, he controlled both organizations’ bank accounts.
Barreto and his co-conspirator, Miguel Gutierrez, solicited donations from victims to fund the nonprofits. The donations were supposed to promote initiatives that enhance the business, economic, and social development of Latinos or promote awareness of issues affecting the Hispanic community.
The Department of Justice claims that some of the money was used for its intended purpose, but hundreds of thousands of dollars were misappropriated. Instead, he was using the money to pay personal credit card expenses. Together, Barreto and Gutierrez conspired to not report these payments and to falsify IRS Form 990s for the foundation.
With Hector Barreto’s guilty plea, the trial expected to last three weeks ended early. The former SBA Administrator is out on bail until his sentencing for the charges of conspiracy to commit wire fraud and conspiracy to defraud the United States. His sentencing is scheduled for August 2nd of this year.