A federal jury convicted five former officers and employees of Banc-Serv Partners LLP (Banc-Serv), a loan provider, in a 13-year conspiracy to defraud the Small Business Administration (SBA) in connection with its loan guarantee programs. small business.
According to evidence presented in court, the defendants are 46-year-old Kerry Agee of Noblesville, Indiana, former president, chief executive officer and founder of Banc-Serv; Kelly Easley, 40, from Westfield, Indiana, former chief operating officer of Banc-Serv; Nicole Smith, 44, of Indianapolis, Indiana, a former Banc-Serv employee; Chad Griffin, 48, of Carmel, Indiana, former director of marketing for Banc-Serv; and Matthew Smith, 52, from Westfield, Indiana, co-founder of Banc-Serv and former director of a lending institution that made loans with Banc-Serv – fraudulently obtained SBA-guaranteed loans on behalf of his clients, knowing that the loans really weren’t comply with SBA’s guidelines and requirements for warranties. Evidence in court proved that from about 2004 to October 2017, the defendants helped make loans to the SBA on behalf of various financial institutions and other lenders and, in many cases, fraudulently obtained loan guarantees that the SBA found unacceptable. They did this, among other things, by knowingly misrepresenting what the loans would be used for and by illegally redirecting previously rejected loan applications through the SBA’s fast-track approval channels. When the fraudulent loans were not defaulted, the defendants triggered SBA requests for reimbursement to buy overdue loans from investors and lending institutions, thereby shifting some of the ineligible loan losses onto the SBA.
The fraudulent loans presented in court totaled approximately $ 5 million in guaranteed payments that did not meet SBA guarantees.
Agee was found guilty on one count of conspiracy to commit electronic communication fraud with a financial institution and four counts of electronic communication fraud with a financial institution. Easley was found guilty on one count of conspiracy to commit electronic communications fraud with a financial institution and two counts of electronic fraud with a financial institution. Nicole Smith was found guilty on one count of conspiracy to commit electronic fraud with a financial institution and two counts of electronic fraud with a financial institution. Griffin was convicted on one count of conspiracy to commit electronic fraud with a financial institution. Matthew Smith was convicted on one count of conspiracy to commit electronic fraud.
Defendants found guilty of conspiracy or fraud involving a financial institution face a maximum sentence of 30 years in prison on each count. The maximum penalty for conspiracy to commit electronic fraud is 20 years. A federal district court judge will issue a sentence to each of these defendants after considering the US Sentencing Guidelines and other regulatory factors.
Assistant Attorney General Kenneth A. Polit, Jr. of the Justice Department’s Criminal Division; Inspector General Jay N. Lerner of the Office of the Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); Responsible Special Agent Paul Keenan of the FBI Field Office in Indianapolis; and Inspector General Hannibal “Mike” Ware of the Inspector General’s Small Business Administration (SBA-OIG) made the announcement.
The FDIC-OIG, FBI and SBA-OIG investigated the case. This case is being handled by Assistant Chief William E. Johnston and Attorney Vasant Sridharan of the Criminal Division’s Fraud Section. Legal attorney Brandon Burkart provided substantial assistance. The Office of the Inspector General of the Department of Housing and Urban Development also assisted in the investigation.
Criminal administration Fraud section plays a key role in the Justice Department’s fight against white-collar crime across the country.