SBA Scam Lands Cali Con Man in Federal Lockup

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Frank Hamilton, 55, of Simi Valley, California, is facing 5 1/2 years in federal prison after admitting he masterminded a scheme to fleece banks and the Small Business Administration out of over $6 million. Judge Wendy Beetlestone delivered the 66-month sentence yesterday in Philadelphia, and ordered Hamilton to repay the full $6,093,024.90.

Hamilton wasn’t working solo. Before the pandemic chaos, his crew was already filing fraudulent applications for standard SBA 7(a) loans. When the COVID-19 money started flowing – the Economic Injury Disaster Loans (EIDLs) and Paycheck Protection Program (PPP) – they shifted gears, recognizing the guaranteed SBA backing of PPP loans made it a wider-open target.

The scheme was brazenly simple. Hamilton allegedly coached his team on how to falsify financial records, including forging tax returns, to make their shell companies appear legitimate. He even sourced “shelf companies” – pre-existing businesses bought wholesale, complete with established paperwork – allowing them to sidestep the usual vetting process and qualify for loans they didn’t deserve.

The crew then siphoned off the funds for their own use. The scheme went on long enough to rack up over six million dollars in fraudulently obtained loans, before federal investigators caught on. Hamilton will now have plenty of time to contemplate his choices behind bars, and begin to repay the massive debt he incurred.