Business loan application leads to a bank fraud conviction

| Jul 5, 2021 | Blog, White Collar Crimes

Information provided on a business loan application generally requires a bank officer to verify its accuracy. As reported by NerdWallet, the underwriting process may include reviewing legal and financial documents related to a business and its owner.

An applicant may need to submit a company’s tax returns, licenses and bank statements. If unable to confirm that the data on a loan application matches other verifiable information, an applicant may face allegations of wrongful conduct.

Verifiable information may disprove allegations of misconduct

A business plan presented with a loan application may show that an applicant intends to use the loan’s proceeds to meet a company’s startup or expansion objectives. The plan may include a description of the products or services sold and bios of the leadership team.

A website and a strong online presence may show a company’s timeline of existence. Records filed and maintained with the Arkansas Secretary of State, for example, may disprove allegations of providing false information to obtain a loan. 

Arkansas resident admits bank fraud in exchange for dismissal of four additional charges

According to the Department of Justice, a 41-year-old Pulaski County resident faced felony charges after allegedly applying for loans with false statements and business records. The bank apparently failed to conduct thorough enough due diligence in approving her applications. She used the proceeds to pay her student loan and purchase goods online. In exchange for the court dropping one of two bank fraud charges and three other loan-associated charges, she pleaded guilty to one count of bank fraud.

Business loan applications typically face scrutiny to verify legal and financial information. A bank’s negligence or lack of due diligence may result in a loan approval that may have required a more detailed review. Inaccurate or purportedly false information may, however, lead to allegations of wrongdoing.