DALLAS (CN) - A loan broker for an auto lube-and-tube chain was sentenced to three years in federal prison and ordered to pay $8.5 million in restitution for bank fraud.
Janice L. Stallons, 57, of Fort Worth, pleaded guilty in August 2011 to conspiracy to commit bank fraud, the U.S. Attorney's Office said in a statement announcing her sentence.
Stallons was a loan broker for Dallas-based Kwik Industries, working with buyers who applied for commercial loans. She helped secured funding for their businesses by assisting with loan applications and providing the completed loan packages to banks, which funded the U.S. Small Business Administration loans.
The SBA requires that loans it guarantees be supported by a "cash injection" or down payment - 20 percent in most cases - to be paid at or before the time of the loan's closing.
Prosecutors said that due to the volume of loans that Kwik Industries was referring, it negotiated an agreement with the SBA that allowed buyers to pay 10 percent down if they signed a secondary note with Kwik, by which Kwik would pay the other 10 percent.
Prosecutors said Stallons conspired to defraud the federal government for two years, by making "materially false and fraudulent statements to the SBA, which led the SBA to guarantee loans to buyers of Kwik-related businesses who did not qualify for the loans under SBA regulations."
Stallons was ordered to report to prison by May 1.
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