NJ Loan Broker Pleads Guilty in $7 Million SBA Hotel Flip Scheme
August 8, 2025
Bob Coleman
Founder & Publisher
Fraud Friday: NJ Loan Broker Pleads Guilty in $7 Million SBA Hotel Flip Scheme
A New Jersey loan broker has pleaded guilty to a complex SBA 7(a) loan fraud scheme that exploited hotel transactions, fake equity injections, and concealed ownership to defraud lenders out of millions.
Jennifer Watkins, former project coordinator at Delaware Hotel Group (DHG) and owner of Forza Consulting, admitted in federal court to conspiracy to commit wire fraud. Working alongside Mehul Khatiwala and Rajendra Parikh, Watkins orchestrated a network of shell companies and straw owners to facilitate inflated hotel “flips.”
The group would purchase hotels at market value using shell companies, then quickly resell them to new entities they secretly controlled—at significantly marked-up prices. To qualify for SBA-backed loans, they misrepresented equity injections, falsified ownership structures, and hid familial relationships among participants.
In one notable case, a settlement statement for a Comfort Inn was altered to show a false purchase price of $4.218 million instead of the actual $3.02 million, misleading an investor and concealing a $1.4 million markup.
In another instance, Watkins falsely told Poppy Bank that a straw owner was the 100% owner of a Motel 6 in Baltimore—just one day after a bank employee questioned whether the “broker” and the “seller” might be the same person.
According to U.S. Attorney Erek L. Barron, “Watkins and her co-conspirators orchestrated an elaborate scheme to defraud SBA lenders… These actions not only defrauded banks, but also threatened the integrity of a vital government program.”
Lender takeaway: Always verify true ownership of buyer and seller entities, confirm the legitimacy of equity contributions, and be cautious when loan brokers appear too closely tied to all sides of the transaction.