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Fraud Friday – “They Got Us” Swapping Business Owners

September 6, 2019

By Caity Witucki
Contributing Editor, Fraud Friday

Fraud Friday – “They Got Us” Swapping Business Owners

On October 16, 2007, the SBA allegedly denied a $2,000,000 7(a) loan application submitted by a banc-serv employee. There were two 50% owners of the applicant business – a “President” and a “CEO.” According to the denial, the President of the business had previously defaulted on an SBA loan, had an outstanding civil judgment against him, and had a poor credit history

Former president, chief executive officer and founder of banc-serv, Kerri Agee (aka Kerri Agee-Smith), allegedly forwarded the denial to two banc-serv employees. In the email she reportedly stated that they needed to make it appear as though the President of the applicant business had “no more than 20 percent stake in the company in order to qualify for an SBA loan.”

With the borrower’s consent, and under Agee’s direction, a banc-serv employee supposedly submitted a reconsideration request. The request noted that the borrower had changed its ownership structure so that the President was now a 15 percent minority owner instead of a 50 percent owner.

However, the SBA once again denied the loan because the agency considers ownership changes over a six month period.

In response, Kerri Agee and her two co-conspirators allegedly prepared a new loan application for the borrower. The new application listed the CEO of the company as the sole proprietor of the business and contained a slightly altered fictitious company name.

On October 24th, 2007, the SBA approved the loan application and banc-serv disbursed the funds.

Agee was arrested on March 22, 2019. She is being charged with 13 counts related to loan fraud. Four other banc-serv employees have been named on the indictment and numerous others have been implicated in the alleged crime. The banc-serv employees are assumed to have been working under the direction and supervision of Kerri Agee.

The case against Agee and her co-defendants is pending in the Indiana Southern District Court. Agee has not yet been convicted and is considered innocent until proven guilty.

Sources:

The United States Department of Justice

Indictment

Read our previous reporting:

Fraud Friday – “Working Capital” Fits better than “Past Due Payroll Taxes” — August 30, 2019

“They Got Us” CEO of banc-serv Indicted for $10 Million Loan Fraud Scheme” — August 23, 2019

Banc-Serv’s Kerri Agee, 4 others Arrested for $10 Million SBA Loan Fraud — March 22, 2019

Kerri Agee out of banc-serv — April 13, 2018

Newtek Forecasts Zero Earnings from banc-serv — November 3, 2017

Banc-Serv Retains Brent Ciurlino, Appoints Karen McHugh EVP — October 19, 2017

Uh Oh, FBI Raids Banc-serv Campus, Locks Doors — October 13, 2017

Newtek Stock Down 10%, Says FBI Executed Search Warrant on Banc-serv — October 13, 2017

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