September 27, 2019
By Caity Witucki
Contributing Editor, Fraud Friday
Fraud Friday— SBA Loan Fraud Trial Begins For Two Former Jacksonville City Council Members
The $251,919 fraudulent invoice trial against former Jacksonville City Council members Katrina Brown and Reggie Brown began on September 23, 2019. (The two are not related.)
According to the indictment, Katrina Brown operated as the primary principle for two family barbeque sauce businesses that had previously obtained a city grant and guaranteed loans from the SBA. When the business was facing a cash crunch, Katrina allegedly approached Reggie about incorporating two fictitious businesses that would serve as a conduit for SBA loan proceeds. Katrina and Reginald supposedly submitted fake invoices to their SBA-approved lender on behalf of the fictitious businesses which claimed that they had performed work for Katrina’s barbeque business that required reimbursement. TheSBA loan proceeds were then funneled into Katrina’s barbeque business and used for personal expenses.
Times-Union reports that the jury heard three different versions of what happened during opening statements Monday morning. Katrina Brown, who is representing herself during the trial, said that she was simply doing everything she could to help her family’s business. She assured the jury that the evidence presented will show that she never broke the law. However, Reggie ’s attorney claimed that his client placed too much trust in Katrina and stated that Reggie believed all the money he received was payment for the legitimate services he provided, like promoting the company and traveling to grocery stores to see how much sauce was left on the shelves.
According to Times-Union, prosecutors spent most of Monday morning presenting evidence for their case, which included thousands of bank records and witness testimony which they say proves Katrina and Reggie used “lies and deceit” to convince their lender to provide money it would not have provided had it known the truth about the barbecue sauce business’ struggles.
This is a developing story.
Fraud Friday — Two Jacksonville City Council Members Indicted for SBA Loan Fraud