Fraud is one of the most common types of white-collar crime in New York and around the country. In law, fraud is the act of creating a financial gain by intentionally deceiving another person or entity. In December, a court sentenced four executives for defrauding the Small Business Administration.
The court sentenced the former founder, owner and president of the defunct lending company to 68 months in prison. The court sentenced the former COO to 57 months in prison and the former chief marketing officer to 28 months in prison. The court sentenced the former co-founder and Director of Bridge Business Bancorp, who originated the company loans, to 46 months in prison. The court will sentence another co-conspirator early in 2022.
There was a two-week jury trial regarding the financial fraud charges prior to the sentencing. The court convicted each defendant of conspiracy to commit wire fraud affecting a financial institution. The court convicted the former founder of four other wire fraud counts while other defendants had an extra one or two counts.
The evidence in the court showed that the defendants fraudulently received SBA-guaranteed loans for their clients. The executives knew the loans didn’t meet SBA guidelines for the guarantee, but the firm set up these loans between the SBA and financial institutes between 2004 and 2017. They fraudulently obtained these loans by lying about the use of the loan, hiding disqualifying factors and expediting approval of already denied SBA loans. When the loans inevitably defaulted, the clients requested reimbursement. The SBA paid for most of the losses.
Damages from the crimes
The court is holding the defendants accountable for their actions. On top of jail time, they need to pay restitution to the SBA. Two individuals need to pay back $2,289,681, and another needs to pay back $685,022. The last one needs to pay back $1,651,450 as a result of being convicted of financial fraud.