$100M SBA Loan Fraud: Park Gets 9 Years

Baltimore, MD – Loren Young Park, 52, formerly of Falls Church, Virginia, is headed to federal prison for nine years after being convicted of conspiracy to commit bank fraud. Park orchestrated a brazen scheme to fraudulently obtain more than $100 million in Small Business Administration (SBA)-backed business loans, leaving taxpayers and legitimate lenders holding the bag. The sentence, handed down by U.S. District Judge Catherine C. Blake, includes a four-year period of supervised release following incarceration.

The case, a joint effort by the U.S. Attorney for the District of Maryland Robert K. Hur, the SBA Inspector General Hannibal “Mike” Ware, the U.S. Postal Inspection Service, and the FBI, underscores the lengths to which criminals will go to exploit government programs. Park wasn’t just skimming off the top; he built a house of cards based on lies and deception, impacting the availability of vital funding for genuine small businesses. “Our financial system is based on trust,” Hur stated, bluntly. “Loren Park and his co-conspirators lied during every aspect of the loan process, cheating taxpayers and lenders, causing more than $100 million in losses, and hurting the chances of future small business owners to obtain loans.”

Park wasn’t easily brought to justice. He was a fugitive for eight years, skipping the country and hiding in South Korea before finally being extradited to face the music. According to court documents, Park, along with his brother Joon Park, ran Jade Capital, a loan brokerage that was at the heart of the fraud. They actively encouraged clients to apply for SBA Section 7(a) loans – loans guaranteed by the SBA, reducing risk for lenders – but with a significant twist: falsified information. The scheme revolved around manipulating the equity injection requirement, the amount of borrower funds needed to qualify for the loan.

The Parks and their crew – including Nick Park (no relation), Joo Hyuk “John” Lee, Sang Hyun Kim, and In Jung Ham – systematically fabricated documents. Altered bank statements showed borrowers with more cash than they possessed. Counterfeit cashiers’ checks and phony gift letters created the illusion of greater assets. Resumes were embellished, tax returns inflated, and financial statements cooked to present a rosier picture of the businesses seeking loans. They didn’t just stop at inflating assets; they actively hid their own financial interests in the transactions, pocketing loan proceeds unbeknownst to the lenders.

Jade Capital profited handsomely, charging hefty brokerage fees to both lenders and borrowers. Crucially, these fees were concealed from the financial institutions underwriting the loans, adding another layer of deceit. The Parks also failed to disclose their ownership stakes in some of the businesses involved, further enriching themselves at the expense of others. The scale of the fraud is staggering, exceeding $100 million in losses, and represents a significant blow to the integrity of the SBA loan program.

This sentencing serves as a warning: attempting to defraud the government, especially programs designed to support small businesses, will not go unpunished. Federal authorities are committed to pursuing these cases, no matter how complex or how far the perpetrators attempt to flee. The investigation remains ongoing, and further charges or indictments are possible.