SBA Loan Financing & Don't Falsify Any Data

When we consult with our clients submitting paperwork/forms for SBA financing we make sure they don't falsify any information on the forms. The reason for this is clear & the possibility of going to jail is very real! It's not worth it trying to get financing to buy a business.

Following are some brief summaries of articles in recent headlines of some borrowers who didn't follow this advice.

The first for falsifying the down payment (borrower's injection):

A Queensbury businessman admitted defrauding the Small Business Administration and lenders of $1.6 million in a complex scheme to buy a California asbestos abatement company in 1998.

Robert R. Barber, 65, who lives in Queensbury and in Fallbrook, Calif., pleaded guilty to one count of bank fraud Tuesday in U.S. District Court in Albany.

He faces up to 30 years in prison and up to $1 million in fines at his sentencing on March 22.

Federal prosecutors said Barber and his company, American Temporary Sanitation Inc., didn't qualify for the loan needed to buy P.W. Stephens Residential Inc. in 1998 from its owner, American Eco Corp./United State Industrial Services.

So Barber had his then 22-year-old son Brian Barber pretend to be the principal of American Temporary Sanitation. The elder Barber then presented bogus financial documents in order to secure a $1.6 million SBA-backed loan.

Prosecutors said Barber moved funds around to make it appear his son had put in the amount of equity required for the loan.

Here is a second case dealing with falsifying tax return information . . .

A federal jury convicted a former Borup, Minn., man Friday on 26 charges, including bank fraud, forging securities, money laundering and making false statements to a bank.

Steven Scott Gordon, 53, will be sentenced at a later date. Federal authorities said he swindled nearly $2 million from a bank and the Small Business Administration.

His trial began Dec. 13 in St. Paul's U.S. District Court and concluded with closing arguments Friday. The jury deliberated for about four hours before issuing its verdict.

Jurors also acquitted Gordon on six counts of money laundering.

An FBI search warrant said Gordon operated several farm-related businesses in Minnesota and North Dakota, including Davenport Ag, a seed business, in Davenport, N.D.

Gordon was living in North Dakota in June when federal agents arrested him at the seed business.

The federal investigation began in 2002 after Gordon defaulted on a $950,000 loan from the First National Bank of Mahnomen, Minn., which was guaranteed by the SBA. The bank told the FBI that Gordon falsified applications, financial statements, tax returns and other documents to obtain the loans.

Gordon also defaulted on loans of $450,000, $192,000 and $64,000 and forged an Ada, Minn., accountant's name on tax returns.

Gordon used financial statements to show his businesses made more money than they actually did.

A grand jury concluded earlier this year that Gordon forged endorsements on crop insurance checks payable to his son for his own use.

In addition, Gordon altered seed test results to sell seed to farmers participating in the Conservation Reserve Program, a federal program allowing farmers to receive money for restoring farm land to native prairie grasses.

Bottom line - don't cheat trying to get SBA loan financing to buy a business, or you may serve time for doing so!

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For more Information, Articles, SBA Loan Calculator, Pre-Qualification Info, and more Details on SBA Loan Financing for small & mid-sized business purchases go to: www.BizBuyFinancing.com
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