NORFOLK, Va. (WAVY) – A Virginia Beach man pleaded guilty Friday to an internet-based loan scam that victimized 1,700 people by cheating them out of over $1.2 million.
He also pleaded guilty to a separate charge of fraudulently collecting unemployment benefits during the coronavirus pandemic.
Court documents revealed that 59-year-old Ronald A. Smith and 53-year-old Terri Beth Miller, his wife and co-defendant, created a fake company called Business Development Group. The internet-based company charged people a fee to help them apply for SBA-guaranteed loans.
According to a statement released by the U.S. Attorney’s Office, the couple “solicited potential customers on the basis of false, fraudulent, and misleading statements and representations, including, among others, that the company was headquartered at the Trump Building in New York and had assisted well-known large companies in obtaining SBA loans.”
Smith and Miller offered the victims a “money-back guarantee,” but in fact employed various fraudulent methods to deny refunds.
Court records say that an aggregate sum of about $1,287,000 in advance fees was paid to the couple for their services. A majority of the customers did not receive an SBA guaranteed loan and the statement released said Smith did “virtually nothing to even attempt to obtain loans for their customers.”
Smith was convicted for an almost identical scam back in 2006 and received a seven year sentence.
He also made a false application to the Virginia Employment Commission for unemployment benefits which included an additional $600 per week in federal pandemic unemployment compensation under the CARES Act.
In the application, he falsely stated that he was not the owner or operator of a business and had not received income from another source. As a result of his false statements, Smith received $9,600 in federal pandemic unemployment compensation to which he was not entitled.
Smith pleaded guilty to wire fraud, engaging in monetary transactions in criminally derived property, and fraud in connection with emergency benefits.
He faces a maximum penalty of 60 years in prison when sentenced on April 2, 2021. Actual sentences for federal crimes are typically less than the maximum penalties.
A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after U.S. District Judge John A. Gibney, Jr. accepted the plea. Assistant U.S. Attorney Alan M. Salsbury is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:20-cr-69.
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