January 14, 2021
Fraud Friday – SBA Bank Loan Officer Pleads Guilty to Kickbacks!
Brian Ferris received a $500 kickback for each loan he approved, and in total, he only accumulated $15,000 out of a $285,000 loan fraud scheme. The Massachusetts-based SBA bank lender repeatedly omitted from the Form 1919 that there were two loan brokers being used or paid in connection to the loans and failed to submit a Form 159 for the loans.
Earlier this week, the loan officer was charged with one count of conspiracy to commit bank fraud for an SBA express loan fraud scheme that ran from 2015 to 2018. Two loan brokers would bring fraudulent loan applications that lied about the applicant’s identity and the small business to Brian’s bank. The fraud was supported with fabricated federal tax forms and forged applicant signatures, and Ferris knowingly approved the fraudulent SBA loans.
Together, Ferris and the loan brokers took advantage of the SBA and bank to procure SBA guaranteed loans and make money from the fees they charged the borrowers to obtain the loans. Their clients would have to pay fees of anywhere from $2,500 to $10,000, but the fees would be sourced from the loan proceeds of the SBA express loans. Of the dozens of fraudulent loans obtained for clients that were ineligible for traditional business loans, most defaulted causing a significant loss to the bank.
In the charging documents, it states that both loan brokers will forfeit $135,000 each. Ferris must forfeit the $15,000 in kickbacks he received. All three face a sentence of up to 30 years in prison, five years of supervised release, and a fine of up to $1 million.