Fraud Friday – SBA Inspector General Part II


January 10, 2014

By Bob Coleman
Editor, Coleman Report

sbaoiglogo2Monday, I wrote about seven fraudsters, six borrowers and one lender who face serious charges from the feds for their malfeasance in SBA lending from the October 2013 monthly SBA Inspector General report.

Here are the final four snippets.

President of Missouri Construction Company Gets Probation for Diverting Draw

A borrower signed a note for a working capital line of credit for $300,105. However, “on that same day, he aided and abetted a former bank executive vice-president and others, by obtaining a $262,648 draw on the line of credit and causing a wire transfer of the same amount to a second bank to benefit parties connected to the first bank. The man is one of 18 people charged in a complex conspiracy to defraud the first bank and the SBA. To date, 12 of the 18 defendants have plead guilty.”

California Banker Charged

While she was being questioned about her involvement in the deposit of fraudulently obtained SBA loan proceeds, it was discovered she had stolen $362,875 from seven CD’s on depost with the bank.

She is charged with one count of lying to a bank.

Wyoming SBA Lender Hit with False Claims Act

A hotel owner who received a SBA 504 loan is suing the bank as a whistle blower under the Federal False Claims Act.

The borrower says the bank made false statements to SBA when it certified there were no material changes in the borrower’s financial condition and the borrower was not in default.

After SBA funded the $2 million debenture, “the bank then forced [the borrower] into bankruptcy,” says the whistle blower.

Read our reporting here

Three Indicted for Lying to a Lender about Two Gas Station SBA 7(a) Loans

While under indictment for bank fraud for lying to a lender, our three fraudsters pulled the same caper, allegedly, again.

A straw borrower was paid $100,000 to pose as the purchaser of two gas stations for $4.5 million.

“The financial institution was misled into believing that the fictitious owner made a $2.1 million down payment. The indictment alleges that two of the individuals skimmed large portions of the cash from the business for personal expenses, which included payments to criminal defense attorneys who were reprsenting them.”

Office of Inspector General Monthly Report