Fraud Friday – Kerri Agee Allegedly Provides False Financials Prior banc-serv Sale
May 22, 2020
By Caity Witucki
Contributing Editor, Fraud Friday
Fraud Friday – Kerri Agee Allegedly Provides False Financials Prior banc-serv Sale
On June 24, 2016, the former chief executive officer and founder of banc-serv, Kerri Agee (aka Kerri Agee-Smith), sold her full interest in banc-serv to a subsidiary of Newtek Business Services Corp. for $5.4 million. After the closing of the sale, Newtek allegedly discovered that banc-serv’s servicing account had a deficit of $800,000 and that another potential purchaser of Agee’s interests had broken off negotiations after accusing her of providing them with false financials. Newtek opened a claim against Agee and a few months later she was indicted on federal fraud charges.
Shortly after being indicted, Agee was forced to file bankruptcy and Joanne Friedmeyer was made the permanent trustee of Agee’s estate. Friedmeyer is now suing Agee’s husband and banc-serv’s former chief marketing officer to recoup the $1.4 million that Agee allegedly transferred to them as part of her fraud scheme.
According to the lawsuit filed by Friedmeyer on February 20, 2020, Agee had been in difficult personal financial straits for many years. To keep banc-serv from going under, Agee allegedly obtained over $10 million in government-guaranteed loans by misrepresenting her borrowers’ eligibility. When the borrowers defaulted on their loans, the SBA honored its guarantee. Friedmeyer alleges that throughout Agee’s scheme, she transferred over $1.3 million into her husband’s business account and $28,000 to banc-serv’s chief marketing officer.
Friedmeyer, as the trustee in Agee’s Chapter 7 bankruptcy case, claims that she is legally permitted to recover the money Agee allegedly transferred to her husband and to her company’s chief marketing officer for the benefit of the bankruptcy estate. She further argues that she may avoid the down payment on a property purchased by Agee’s husband.
Kerri Agee has not yet been convicted. Due to the coronavirus pandemic and ongoing investigation, her federal trial has been rescheduled for February 1, 2021.
Sources:
Indictment
Ben Crawford Case
Chad Griffin Case
Previous Reporting:
Fraud Friday – banc-serv Second Loan Case Study
“They Got Us” Swapping Business Owners — September 6, 2019
Fraud Friday – “Working Capital” Fits better than “Past Due Payroll Taxes” — August 30, 2019
“They Got Us” CEO of banc-serv Indicted for $10 Million Loan Fraud Scheme” — August 23, 2019
Banc-Serv’s Kerri Agee, 4 others Arrested for $10 Million SBA Loan Fraud — March 22, 2019
Kerri Agee out of banc-serv — April 13, 2018
Newtek Forecasts Zero Earnings from banc-serv — November 3, 2017
Banc-Serv Retains Brent Ciurlino, Appoints Karen McHugh EVP — October 19, 2017
Uh Oh, FBI Raids Banc-serv Campus, Locks Doors — October 13, 2017
Newtek Stock Down 10%, Says FBI Executed Search Warrant on Banc-serv — October 13, 2017