Massive SBA Loan Fraudster Pleads Guilty

Joon Park promised to help small businesses obtain SBA-backed loans. Instead he scammed banks and his clients.
President, Proximo, LLC
March 20, 2013

Small-business owners have to work very hard to secure financing for their businesses. It is extremely disappointing when people who claim to help small businesses obtain loans turn out to be nothing more than scam artists. One such person, Joon Park, owner of Jade Capital & Investments, LLC, plead guilty to conspiracy to commit bank fraud yesterday and faces up to 30 years in prison.

Park’s scam was rather simple. Small businesses would approach his company for assistance in securing a U.S. Small Business Association-backed loan from commercial lenders. His company would then process the application on behalf of the client. Before submitting it to lenders, his company would illegally modify bank statements and other documents to make it look like the applicant had more cash on hand.

In some cases clients knew what was going on and didn’t say anything; in other cases clients had no idea their information was being falsified. In the most egregious examples of the fraudulent activity, Park would sometimes retain an undisclosed ownership stake in companies that were applying for SBA-backed loans through Jade.

Park submitted 124 fraudulent applications, which received $100 million in SBA-backed loans. This type of fraud hurts all business owners. As taxpayers we are responsible for the losses to lenders generated by applicants who were not creditworthy. It also increases the premiums that we all must pay for SBA loans. Since SBA 7(a) loan guarantees are not unlimited, it is likely that other, legitimate applications were denied as a result of this fraud.

[Bloomberg]

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