Also known as Small Business Administration (SBA) Loans, SBA Loan Fraud occurs when an individual or an entity deliberately provides false and material information to a federally insured financial institution or a federal agency. If convicted, the penalty for this crime can be severe; incarceration in federal prison and hefty fines that could reach six figures are possible repercussions.

Obtaining an SBA-guaranteed loan through deceitful statements may result in several federal crimes. Additional charges like racketeering, conspiracy, or money laundering.

What Are SBA Loans?

The SBA offers small businesses loans, loan guarantees, and business counselling. Over time, the SBA has expanded to provide federal contract procurement aid, tailored outreach for women, minorities, and veteran business owners, and disaster relief.

To facilitate small businesses’ access to loans, the SBA collaborates with lending partners and banks, which implies that the  SBA does not lend money directly.

This small business loan offers loan guarantees or backed loans to lower lenders’ risk and streamlines the capital accessibility process.

What Is SBA Loan Fraud?

When an individual or an entity intentionally provides a false and significant statement to a financial institution to deceive the lender into granting a loan, it constitutes loan fraud.

What Must The Prosecutor Prove?

The prosecutor must establish all the crime’s components “beyond a reasonable doubt” in every criminal case. This criterion is the most stringent legal standard and necessitates that the jury concludes beyond doubt that the defendant is guilty (commonly defined as a 99% probability).

Does the SBA Investigate Fraud?

OIG (also known as the Office of Inspector General), offers various types of assistance, including auditing and investigative services, to help the SBA fulfill its legal objectives.

The OIG examines claims of misconduct and potential criminal violations. Most investigations are carried out alongside a U.S. Attorney’s Office. Although an SBA employee may be the focus of the investigation, most subjects are individuals who are part of or have applied to agency programs.

The Office of Inspector General’s Role

According to the official U.S Small Business Administration, the role of OIG is to be an “independent and objective oversight office created within SBA by the Inspector General Act.”

  • Foster efficiency, effectiveness, and economy in managing SBA programs and supporting operations
  • Oversee audits, investigations, and evaluations concerning the agency’s programs and support operations
  • Identify and prevent instances of fraud and misuse
  • Evaluate current and proposed legislation and regulations and provide relevant recommendations
  • Cultivate productive relationships with other governmental and non-governmental entities in relation to the Inspector General’s mandated responsibilities
  • Keep the SBA Administrator and Congress up-to-date on significant issues and suggest remedial measures and implementation strategies
  • Match to the Comptroller General’s auditing standards
  • Avoid duplicating activities conducted by the Government Accountability Office
  • Report instances of law violations to the U.S. Attorney General.

What is the Penalty for SBA Loan Fraud?

You can face severe penalties if found guilty of SBA loan fraud in California. These penalties comprise:

  • SBA loan fraud is subject to federal penalties.
  • If mail or wire fraud was committed, both a fine and a prison sentence of up to 20 years might be imposed.
  • Naturally, the penalties also entail paying back all the expenses that the victim incurred due to the fraud.
  • Securities fraud charges require mandatory imprisonment of 5 years for each instance of the crime, depending on the total amount obtained through the fraud.

Can SBA Loan Fraud Be Reported Anonymously?

You may opt to remain anonymous. However, doing so will prevent the SBA OIG from being able to contact you for additional details about your complaint. Unfortunately, this could restrict the capacity to carry out an extensive assessment and we will be unable to update you regarding the results of their investigation.

If you have an issue with a product or service bought from a business or merchant, it is advisable to contact your:

  • state or local government’s consumer affairs department,
  • state attorney general’s office,
  • your local Better Business Bureau or
  • SBA Loan Fraud lawyer.

Are You Facing Allegations of SBA Loan Fraud in California?

Suppose you encounter any SBA loan fraud charges in Encino, CA. In such a situation, it is essential that you enlist the help of an experienced attorney who focuses on this particular type of legal defense. Prosecutors must be able to demonstrate all elements of the crime beyond doubt – an incredibly difficult task requiring competent and experienced representation. Therefore, seeking professional counsel can help strengthen your case against these accusations. The Office of Inspector General (OIG) investigates claims of misconduct and potential criminal violations involving SBA programs and support operations. If found guilty, SBA loan fraud carries severe penalties, including incarceration in federal prison and significant fines. It is possible to report SBA fraud anonymously, but it may impede the OIG’s ability to conduct a thorough investigation. For that reason, it is in your best interest to meet with a reputable SBA loan fraud lawyer based out of Encino, CA who can offer you sound legal counsel and representation through the course of your case.

California SBA Loan Fraud Defense Lawyer

When facing SBA loan fraud charges in California, several defense tactics can be employed to challenge the prosecutor’s case. One possible defense strategy is to argue that the defendant did not intentionally provide false or material information to deceive the lender into granting the loan. Furthermore, the defense may present a reasonable case that the defendant showed no intention to commit fraud. Since this is a pivotal factor in determining guilt beyond a reasonable doubt, the prosecution must adequately establish it. Another defense strategy may involve challenging the evidence presented by the prosecutor, such as the accuracy and reliability of the documents and financial statements used to support the loan application. Finally, the defense may attempt to negotiate a plea deal with the prosecutor to avoid the severe consequences associated with a conviction for SBA loan fraud. An experienced SBA loan fraud lawyer can provide legal guidance and representation throughout the legal process and help determine the best defense tactics for the specific case.

For questions regarding accusations of SBA loan fraud or other loan fraud, please get in touch with an SBA loan fraud lawyer at RP Defense Law, APC in Encino, California, for advice about your SBA loan or fraud.

Call us at (818) 646-3443 or contact us online.