April 24, 2015

By Bob Coleman
Editor, Fraud Friday

Randy Tran created R&K Real Estate Investment, Inc. to buy Potomac Wine & Spirits, a liquor store in Hagerstown, Maryland. Tran was the majority and controlling owner of R& K, and another individual owned a minority interest.

In May 2006, Tran and the minority shareholder signed agreements to buy the liquor store for $899,000 and the real estate that the store occupied for $400,000.

Tran sought Joon Park of Jade Capital & Investments, to broker a loan for the store’s purchase. Tran and Park discussed obtaining a loan at PNC Bank that was guaranteed by the SBA.

Because Tran had significant debt from the purchase of residential properties, Park advised that Tran would not likely be approved for an SBA guaranteed loan.

Tran disclosed to Park that he could use a straw buyer for the loan. Tran and Park agreed that they would falsely represent to PNC that the straw buyer would own and operate the liquor store. Tran asked the straw buyer to apply for the loan and promised that he, Tran, would pay all the bills for the store and make the loan payments.

At the settlement for the sale of the liquor store on September 29, 2006, the straw purchaser falsely represented to PNC that he was the president of R&K. The funds needed to close the transaction were provided by Tran, not the straw purchaser. PNC funded a loan of $950,000.

After the closing, Tran ran the liquor store. On January 22, 2007 Tran sold a 50 percent stake in the store to another individual for $380,000. During the sale, Tran represented to the individual that he owned 100 percent of the store.

In 2007, Tran stopped making loan payments to PNC and the loan went into default.

In addition to the 51 months in jail, Tran was also ordered to pay restitution of $950,000.

In a separate case, Joon Park previously pleaded guilty to his role in a bank fraud conspiracy arising from a scheme to fraudulently obtain numerous business loans guaranteed by the SBA between 2003 and 2011, with resulting losses of Judge Quarles sentenced Park in June 2013 to 15 years in prison and ordered Park to pay a money judgment of $91 million.

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