What Is SBA Loan Fraud?
A person or business is said to have committed loan fraud when they make false material statements to a federal agency or financial institution. If these untrue statements mislead a lender into giving a loan, it’s fraud.
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Consequences of SBA Loan Fraud
There are different consequences based on the fraud you or your business have been accused of committing.
Acts involving loan fraud fall under specific statutes. If you go to trial, a prosecutor could seek criminal charges for false statements made on your loan application, to the SBA, or a federal agency.
You could rack up additional charges like mail fraud if you use the mail system for your application. If convicted of loan application fraud, you could face up to 30 years in prison and pay a possible fine of up to $1,000,000.
A false statement to the SBA to get a loan is considered a two-year felony and violators have to pay a fine of up to $5,000. Making a false statement to a federal agency comes with a maximum penalty of five years in prison and $250,000 if convicted.
On top of all these consequences having a criminal record with charges for federal funds fraud could prevent you from qualifying for an SBA loan in the future.