Broker Admits Title and Loan Application Fraud

Allison Tussey —  March 1, 2012 — Leave a comment

Nick Park, a/k/a Nochol Park, 46, McLean, Virginia, pleaded guilty to conspiracy to commit bank fraud in connection with a scheme to fraudulently obtain loans with resulting losses of at least $1.3 million.

According Park‘s plea agreement, in 2006, Park and a co-defendant brokered a loan on behalf of a buyer interested in purchasing a restaurant in Washington, D.C.  Park suggested that the buyer apply for a loan that was guaranteed by the Small Business Administration (SBA).  The SBA’s program required the principals of the small business seeking the loan to invest a certain amount of their own money, called an equity injection, before they qualified for a loan.  The banks and other lending institutions making the loan bore the risk of payment default only up to the percentage of the loan not guaranteed by the SBA. 

In order to make it appear that the buyer owned property that could be used as collateral for the loan, Park re-titled a home he owned in the buyer’s name, without the buyer’s knowledge.  In addition, Park and his co-defendant submitted altered copies of the buyer’s bank statements to the bank to fraudulently reflect more money than was actually in the accounts.  Prior to the loan closing, the buyer gave Park a cashier’s check for $50,000.  Park also instructed the buyer to pay his co-defendant $7,000 for processing the loan.  Based on the fraudulent loan application, the bank approved a loan for $350,000, guaranteed by the SBA, to finance the purchase of the restaurant.

From 2000 through 2007, Park was part owner of a dry cleaning business.  In 2007, Park approached a co-defendant who had previously brokered the loan for Park and his partners to buy the store, about raising capital in connection with the business.  The co-defendant advised Park that since on paper the business appeared to be a sole proprietorship, the partners could arrange a sham sale among themselves and obtain a small business loan guaranteed by the SBA.  Park and another partner formed a new entity and “sold” the business to the to the remaining partners. 

To finance the sale, the co-defendant created a fraudulent gift letter reflecting that Park‘s wife was making a gift to one of the partners who was purportedly purchasing the business.  Park knew that his wife was not making a gift and that the letter was a fake.  Park provided his wife’s bank statements to his co-defendant, who altered the statements to make it appear that Park’s wife had the funds referenced in the fake gift letter. Park knew that his wife did not have such funds, nor did he tell his wife about the fake gift letter and altered bank statements. 

Based on the fraudulent documentation provided to the bank, a $950,000 loan, guaranteed by the SBA, was provided to fund the purchase of the cleaning business. Park received a wire transfer of $467,350 from the loan proceeds and the remaining proceeds were applied to a debt Park owed to a lawyer.

Park faces a maximum sentence of 30 years in prison for the bank fraud conspiracy U.S. District Judge Benson E. Legg scheduled sentencing for May 31, 2012 at 2:30 p.m.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Small Business Administration Inspector General Peggy E. Gustafson.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein thanked the FBI and SBA Office of Inspector General for their work in the investigation.  Mr. Rosenstein praised Assistant U.S. Attorneys Martin J. Clarke and Leo J. Wise, who are prosecuting the case.

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Allison Tussey

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