Fraud Friday — What Happened In the banc-serv Jury Room? Exclusive Coleman Report Interview
August 6, 2021
By Joseph Coleman
Contributing Editor, Coleman Report
INDIANAPOLIS — A Juror from the banc-serv SBA Loan Fraud Trial spoke with Coleman Report (August 5, 2021) about reaching Guilty verdicts for all five defendants late August 4, 2021.
Here is the phone interview with the Juror:
Coleman Report: Thank you very much for providing this information. The first question is about Nicole Smith, how did the deliberations go while discussing her charges? Were there any doubts in the jury room about her being criminal in her actions? Was there any doubt that she was guilty?
Juror: The thing that we really had to focus on first was intent. They had to prove that she showed intent in order to qualify. The way it was explained to us was, her knowing of fraudulent activity going on or being aware is not enough to consider her as part of the conspiracy. She had to show intent in order to be joined in those ranks.
Initially she was a new kid on the block. She was a rookie taking everything she learned from Kelly Isley. Initially after she learned how banc-serv ran, she started encountering some of these fraudulent activities. Where the intent comes in is instead of leaving the company, or reporting the company, she continued to work there and contributed to the same fraudulent activity on future loans.
So that’s where the intent came in. The intent was proven on multiple loans. She submitted the loan application with fraudulent information to the SBA. She would purposely leave boxes unchecked. For example there is a question on the SBA 7(a) Express form, a Patriot Express form to be exact, that asks ‘Has this borrower ever previously applied for an SBA loan?’ They would leave those blank because that’s an automatic red flag. She among other parties would leave that blank.
It was proven that she did the white-out. Covering up the name, hiding the names, doing a very poor job of doing the white-out. But she did it nonetheless.
Coleman Report: Was the jury shocked that the defense didn’t put up any witnesses?
Juror: Overall I didn’t get any vibe from my fellow jurors that there was any surprise. I know a few of us would have loved to see them take the opportunity to defend themselves. We all know legally they don’t have to.
The defense attorneys presented their cases in partnership with the defendants the way the defendants wanted it to happen. So maybe there was no need from their viewpoint to take it.
That would have been a prime opportunity for Nicole Smith to step up and say, ‘This is what I encountered when I first started there. This is what I learned, this is what I saw.’
But on the flipside to that, that would have opened her up for more prosecution questions of ‘Why didn’t you report it? Why didn’t you quit? Why did you continue into it and start doing the fraudulent activities that Kerri, Kelly, and at one time Matt did?’
Coleman Report: It changes a lot in our industry that Nicole Smith was convicted and is now a felon.
Juror: She not only became a felon, she became a felon on three counts. I’m sure she had the opportunity to come up and tell us her side of the story but for whatever reason it didn’t happen.
Coleman Report: Can you tell me about Matt Smith, he was proven Guilty on a lesser count, can you explain that?
Juror: We had no choice in the matter. There are two different counts he could have been convicted on. One was Conspiracy to Commit Wire Fraud against a Lending institution, and the other one was Conspiracy to Commit Wire Fraud against a Financial institution.
The difference between the two is the financial institution is FDIC backed, lending institutions are not. His company (BBB) did an interim loan to payback some fraudulent payroll taxes that were in default. We couldn’t convict him on the Conspiracy to Commit Fraud against a Financial Institution because his business (BBB) is not FDIC backed. So we had to go to the lesser charge.
Coleman Report: What did the jury think of Kerri Agee? Was she the ring-leader of this conspiracy?
Juror: The Department of Justice really did a good job in making it very obvious it started with Matt and Kerri, who founded the company. It was really Kerri. Then she led Kelly Isley into the whole scheme of getting away with things during that time period.
I don’t know if anyone has really discussed this but there was a period of time between 2006-2010 where the SBA was in a transition. Their computer systems, some of them worked, some of them didn’t. The mainframe was too slow, they were rolling out a new digital coding system where applications could be submitted digitally.
During that time period, it was unfortunately too easy for somebody like Kerri Agee to resubmit a loan as an Express loan or as a different type of loan after it was already denied as standard 7(a). They could make a change, say change the business name. Or they could not use their Social Security Number, like they did on the original application, then use their Tax ID number on the resubmission. The SBA computer systems wouldn’t catch that. To SBA, it was a whole new loan.
Coleman Report: The Government proved that the opportunity was there to commit the fraud?
Juror: They proved it beyond the point of any doubt. There was no question. They brought in witness after witness of higher ups from SBA. Everyone of them testified that this was a difficult time for SBA.
Coleman Report: Can you explain how the verdict decisions came in late last night after an all-day 10 hour deliberation?
Juror: She came to check in on us just a couple minutes before 8:00pm. We already had 12 of the 13 votes signed off on. We were within seconds of voting on the last one when she came in to tell us that Judge was going to send us home. And we asked her not to.
Coleman Report: Are you satisfied with how the trial ended?
Juror: This trial is not done. The Judge already feels that every one of them are going to appeal.
Just as another tidbit, the family all decided to wait outside the courtroom for us. A family member came up and tried to—I don’t know if he thought he was being intimidating, but we just kind of laughed. We walked around that corner, and her dad followed us.
Coleman Report: Will you come on the show to give us more information?
Juror: I’d be willing to come on your show.
Coleman Report: Thank you very much!
Join us Monday for Coleman Report Live! to hear a live interview with the banc-serv trial Juror.
Contributing to this article: Bob Coleman, Publisher, Coleman Report and Delaney Sexton, Contributing Editor, Coleman Report.
DOJ: Jury Convicts Five Former Officers and Employees of Banc-Serv Partners in $5 Million Scheme to Defraud the Small Business Administration
Indianapolis Business Journal: Defendants found guilty on all charges in Banc-Serv fraud trial