Fraud Friday — SBA Borrower Guilty of Loan Fraud for Failing to Disclose Payroll Tax Liability

April 27, 2017

Fraud Friday — SBA Borrower Guilty of Loan Fraud for Failing to Disclose Payroll Tax Liability

By Bob Coleman
Editor, Fraud Friday

Guilty as charged Clinton Tackitt told the judge.

Clinton got a $1.5 million SBA-guaranteed loan for his business, Allied Roofing Systems, LLC, in 2012. Problem is the application to Missouri-based Guaranty Bank was “false and incomplete.”

The SBA 7(a) loan was charged off in 2016 to the tune of $1.2 million.

Clinton acknowledged he failed to disclose all of his “financial debts as required and failed to truthfully disclose an accurate financial status of his company or a complete listing of the debts he and his business owed.”

The reality is the company was heavily in debt and was about to claim bankruptcy.

Tackitt also failed to disclose that a third party assisted him in the preparation and presentation of the application. (Sounds like a loan broker may not have followed 159 rules.)

Clinton also admitted that he failed to pay over to the government $262,000 in payroll taxes that he collected from his employees. He also failed to pay over the employer’s share of FICA taxes, for a bill of almost $400,000.

Tackitt must forfeit to the government $1.3 million.

Anecdotally, in the piling on category, I love this line from the Springfield, Missouri Business Journal, “Allied Roofing also was cited for four safety violations in 2011 by the Occupational Safety and Health Administration for an Omaha, Neb., project where employees were exposed to fall hazards.”

Uh, it’s a roofing company OSHA.

One final observation. “The year before, Allied Roofing was honored as part of Springfield Business Journal’s Dynamic Dozen fastest growing companies. The company posted revenue of $6 million in 2010, ranking it No. 8 with three-year revenue growth of 42 percent.”

Reinforces the lesson to underwriters to ensure rapid growth is supported by sufficient equity and working capital.

Anyway, Clinton faces the obligatory 30 years in jail for loan fraud.