April 20, 2018
Fraud Friday — Two Borrowers Jailed for Loan Fraud, Lying to SBA
By Bob Coleman
Editor, Fraud Friday
On Tuesday, Harold Halman, II, 58 got 36 months. Alexander Schaap, 62, got 30 months. Craighton Boates, 44, received five years’ probation.
The three were principals of Global Medical Equipment of Arizona.
They defrauded SBA, Metro Phoenix Bank, and Republic Bank of Arizona by submitting loan applications containing false information that included the percentage of GMEA ownership, the use of the loans for pre-existing debts, forged emails and letters misrepresenting that down payments had been made by the principals, and a concealed kickback.
The defendants defaulted on nearly $4.5 million in loans.
“SBA’s 7(a) program is intended to provide capital to grow the nation’s small businesses not line one’s pockets,” says Acting Inspector General Hannibal “Mike” Ware. “Schemes to unjustly enrich oneself will be rooted out, and those responsible will be brought to justice. I want to thank the U.S. Attorney’s Office for their dedication and leadership throughout this investigation.”
“A sophisticated scheme involving millions in illegally obtained loans does not happen without forethought and criminal intent. The defendants made false statements and omissions to the banks who relied on them to be truthful,” says IRS-Criminal Investigation Special Agent in Charge Ismael Nevarez, Jr. “We hope this prosecution discourages others from taking the path of fraud in their business ventures.”
“These three individuals knowingly executed a scheme to defraud banks out of more than $6 million then conspired to launder the money,” says Michael DeLeon, Special Agent in Charge of the FBI Phoenix Field Office. “The guilty pleas of these individuals should send a message. The FBI will continue to work alongside our law enforcement partners to investigate these types of crimes and protect the community from schemes to defraud financial institutions insured by the FDIC.”
“These loans should have been granted to qualified small business owners. Instead the defendants effectively denied an opportunity to legitimate small businesses deserving access to capital,” says Elizabeth A. Strange, First Assistant U.S. Attorney for the District of Arizona. “The United States Attorney’s Office will continue to aggressively investigate and seek criminal prosecution or civil remedies when fraud is perpetrated by corrupt borrowers who attempt to obtain financial assistance through the SBA’s guaranteed loan programs. We would like to thank the SBA-OIG, IRS-CID, and the FBI for their thoroughness and dedicated professionalism throughout this investigation.”