Guilty Plea in SBA Loan Scam

 

A Detroit financier this week pleaded guilty to charges of fraud and making false statements in acquiring more than $70 million in fraudulent loans from the Small Business Administration.

Patrick Harrington, 45, a former vice president of Business Loan Express, was indicted in January for his part in a scheme that fraudulently qualified some 76 SBA-guaranteed loan applications between 2001 and 2006, primarily for the purpose of buying local gas stations, motels, and restaurants, according to the indictment. Harrington and five unnamed brokers conspired to boost the applicants' qualifications for the loans and to overstate the amounts that went into their businesses. His company later sold the loans to secondary lenders before they went into default. Nearly 20 other people were charged in the case, including several fugitives.

Harrington faces up to 10 years in prison and $500,000 in fines. He is expected to be sentenced in January.

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