March 29, 2019
By Bob Coleman
Editor, Fraud Friday
Fraud Friday — “They Got Us,” Feds Allege Kerri Agee Says in Email to Employees to Support $10 Million Loan Fraud Indictments
A key takeaway in the banc-serv indictments is never assume anything in your email is confidential. Always assume the party you are criticizing, or plotting collusion with, will get a copy of your damning email at some point down the road.
Check out the first of many banc-serv case studies for the industry we will be covering over the next few months.
So Sayeth the Feds……..
Loan Fraud Rule #1 — Really, Does it have to be said NOT to Document Loan Fraud in an Email?
On or about July ’19, 2007, KELLY ISLEY, copying KERRI AGEE, emailed an SBA official to ask whether SBA loan proceeds could be used by a borrower to pay the $800,000 that remained of a $2.1 million fine that had been imposed by the Department of Justice. The SBA official responded, “[I]t would be a no-no for one federal agency to guaranty a loan to pay a fine levied by another federal agency.”
KELLY ISLEY forwarded the SBA official’s response to MATTHEW SMITH, CHAD GRIFFIN, KERRI AGEE, and an employee Lending Institution#1, and said, “so the only way around this is for [Lending Institution#1] to do an interim note and state it is for working capital. We will have to tell SBA what the funds were used for therefore, you can not state anywhere in your note it is for the payment of a government agency fine.”
In another instance, on or about April 24, 2009, the SBA sent a letter to Banc-Serv and a loan officer at Lending Institution #3, denying a loan application that had been prepared by NICOLE SMITH. The SBA denied the application, according to the letter, because, “the request for an additional $62,984 in working capital cannot be approved.” The letter from the SBA further stated: “The additional working capital would appear to provide the applicant with means necessary to pay down or renegotiate and or/ refinance the [bank] debt SBA has previously determined to be ineligible for SBA assistance. As the working capital funds cannot be monitored and the appearance of circumvention of SBA policy appears to exist, we cannot approve the proposed increase in working capital proceeds.” After receiving this letter via a service that converts incoming faxes to email attachments, KERRI AGEE forwarded it to NICOLE SMITH, copying KELLY ISLEY and CHAD GRIFFIN, and added, “They got us.”