July 8, 2013
The interesting takeaway is SBA’s Inspector General differentiates between business loans and recovery act loans – the stimulus loans that received a 90% guaranty.
Further proof the OIG is paying very close attention to these loans. After all, they got a large, separate chunk of money from Congress to audit and review these loans.
Writes the OIG about this ARAA loan – “On May 13, 2013, a California man was charged by a Criminal Information with one count of making false statements. In March 2009, the man applied for a $50,000 SBA-guaranteed small business loan under the American Recovery and Reinvestment Act (ARRA). He certified that the information contained in his application and on SBA forms was true and complete, which caused the bank to approve his loan. In his loan application, however, the applicant allegedly misrepresented his criminal history.”
And then there is there case of a garden variety photo shopped bank statement. Two Texas men, the buyer and seller of a hotel are charged with one count of wire fraud and one count of conspiracy.
“Some statements were altered to show a significantly higher account balance and others showed him as the accountholder when the account actually belonged to the second man, the seller of the hotel. Further, the seller allegedly funded the buyer’s full cash injection, attempting to disguise money loaned to the buyer as consulting fees and sales commissions. In July 2009, the buyer received a second SBA-guaranteed loan for $510,000 to make improvements and additions to the hotel. Again, the seller allegedly supplied the funds for the buyer’s cash injection. Records in the loan file also identified the seller as the general contractor handling the construction project, in spite of his claim that he was planning to leave the United States.”