Wire Fraud-SBA Loan

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7^th Circuit Court of Appeals

Case Name: United States of America v. Chad Griffin

Case No.: 21-3326

Officials: Ripple, Scudder, and St. Eve, Circuit Judges.

Focus: Wire Fraud-SBA Loan

In cases where a borrower fails to meet their obligations on a loan backed by the Small Business Administration (SBA), the lending institution contacts the SBA to acquire the remaining balance of the defaulted loan. Subsequently, the SBA evaluates whether to uphold the guarantee by examining the loan documentation to verify its alignment with SBA standards. Lenders have the option to utilize a lending service provider (LSP) to manage various aspects of SBA-guaranteed loans, including origination, disbursement, servicing, and liquidation. In this instance, the five individuals in question were connected to an LSP and orchestrated a plan to secure SBA guarantees for loans that fell short of the SBA’s criteria. Their actions involved submitting dishonest information on applications for loan guarantees and purchase requests sent to the SBA. These falsehoods pertained to matters such as the eligibility of borrowers to receive loans and the intended utilization of loan funds.

The Seventh Circuit Court upholds the convictions of the defendants on charges of conspiring to commit wire fraud that impacted a financial institution (18 U.S.C. 1349) and wire fraud affecting a financial institution (section 1343), along with confirming their sentencing. The court dismisses arguments related to potential modifications to the indictment, the government’s burden of proving that the wire fraud scheme resulted in the SBA’s loss of a legally safeguarded monetary or property interest, concerns about jury instructions, the sufficiency of evidence, and the calculation of losses.

Affirmed

Decided 08/07/23

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