Former Loan Company Officials Charged With Fraud
Five former officers and employees of an Indiana loan packaging and servicing company have been indicted in federal court. The U.S. Department of Justice says the charges stem from an alleged 13-year-long conspiracy to defraud the U.S. Small Business Administration.
The charges involve Kerry Agee, the former co-founder, president and chief executive officer of Banc-Serv Partners LLP, along with co-founder Matthew Smith, former chief operating officer Kelly Isley, chief marketing officer Chad Griffin and employee Nicole Smith-Kelso. The indictment alleges the defendants helped originate SBA loans on behalf of various financial institutions from 2004 to 2017 and, on multiple occasions, fraudulently obtained guarantees for loans that the SBA had deemed ineligible.
When a fraudulently-guaranteed loan defaulted, the defendants allegedly caused other employees to transmit requests to the SBA to purchase the defaulted loans, shifting the losses to the SBA. In all, the defendants allegedly originated loans totaling more than $10 million in disbursements.
Each defendant is facing one count of conspiracy to commit wire fraud affecting a financial institution and one count of conspiracy to make false statements in loan-guarantee applications and purchase requests. Everyone except for Matthew Smith also face additional charges of wire fraud and making false statements in loan-guarantee applications and purchase requests.
The case was investigated by the SBA Office of Inspector General, the Federal Deposit Insurance Corp. Office of Inspector General, and the Federal Bureau of Investigation.